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Domino’s Pizza Japan: Fortressing or Market Expansion Case Solution & Answer

Domino’s Pizza Japan: Fortressing or Market Expansion Case Solution

  1. INTRODUCTION

Domino’s Pizza is the biggest-food chain of eateries that is headquartered in the United States of America, nonetheless, it has an enormous association of worldwide branches all throughout the world. The firm was set up in 1960 by two siblings, Tom Monacan and James Doyle, following the group’s reformist takeover of Dominick’s. The business changed its brand name to Domino’s Pizza, Inc.

The association’s first ever establishment store opened in 1967 in Ypsilanti. This reflected its turn of events. The fundamental overall store opened up in mid-1983 in Canada’s Winnipeg domain in the Manitoba area. The chain has a presence in close to 70 countries across the world. It uses a workforce of more than 145,000. It is viewed as the main worldwide cheap food chain of eateries with corporate, just as diversified stores that surpass the 10,000 imprints(Buss, 2013)

Dominos has a very tough market because it has numerous competitors like Pizza hut, Broadway, etc. The Dominos market capitalization is higher than other rival firms, because of its brand equity and customer relationship management.

The competitive firms have correspondingly broadened their foundation associations and spread all through the overall market. The major serious condition is to keep up the lower operational costs to support higher advantages during the poor overall monetary condition.

1.1 PROBLEM STATEMENT

In late 2018, Josh Kilimnik, the Chief Executive Officer (CEO) and the President of Domino’s Pizza Japan Inc. (DPJ), was convinced that a substantial expansion in the Japanese market was much needed as well as feasible for the continued growth of his company.

Josh Kilimnik wants to expand DPJ further in various areas in Japan, in order to increase the company’s market growth. The main problem that arises is Josh Kilimnik was wondering whether the priority should be given to new areas in Japan that DPJ had not been entered at this point, or to the more penetrated Japanese areas where the organization had previously worked. Josh was puzzling over the possibilities that whether the opening of DPJ in Hokkaido would increase its market growth. As it is the largest area of Japan having the largest population, which could be a high advantage for DPJ to increase its expansion. Or to the opening of DPJ in Nagoya could increase its growth, as Nagoya is the most crowded city but having a smaller population than Hokkaido.

2.SITUATIONAL ANALYSIS

The major success of DPJ is because of its brand image and services towards the customer. As the company deals in fresh food, quality service, employee engagement, training, and development of the employees; uniqueness exists because of such factors.

2.1 Macro Analysis

PEST Analysis is the fundamental marvel to assess your business as per the outer climate. The outer climate is the reality of any business, which should be evaluated appropriately. It contains Political, Economic, Social, and Technological variables.

Political

Political factors for DPJ are quite favorable as they are growing their business in Japan.

The political soundness of Japan is positive in regards to business. There is government support for organizations and moderate charges. Japan is the biggest country where the laws are straightforward and compelling. The vote based arrangement is the fundamental factor, which helps free enterprise and helps individuals in beginning of their organizations and in having appropriate guidelines over them. DPJ can develop its business and have positive political elements.

Economic

Japan will remain the world’s third-largest economy, with nominal GDP of 5.6 trillion,and the per capita income is high there. The political soundness of Japan is positive in regards to business. There is government support for organizations and moderate charges. Japan is the biggest country where the laws are straightforward and compelling. The vote based arrangement is the fundamental factor, which helps free enterprise and helps individuals in beginning their organizations and having the appropriate guidelines over them. DPJ can develop its business and have positive political elements.

Social

Socially, DPJ has influencing factors because of the shopping goods. The main focus of

the organization is redirected on is edible things. There is a huge share of cosmopolitan culture there. Everybody has an alternate decision, which drives the firm to have an appraisal of the requests of a different pool of individuals. There are some worrier factors for the DPJ which can turn into a deterrent for the development and extension. The other issue could produce when the liberal attitude of individuals can’t give the publicity to the market development in the new region and they lean toward what they are utilized to.

3.PORTER’S FIVE FORCES MODEL

Risk of Entry by Potential Competitors

The danger of new participants by potential clients is high on the grounds that the appearance of contestants can carry higher rivalry to the market, which expands advancement, groundbreaking thoughts of offering types of assistance, and the expectation of lower value procedure. DPJ’s two principle rivals in the Japanese market were Pizza Hut and Pizza-La. The strength of the contenders is high on the grounds that the business where Dominos bargains comprise of high market focus and it should bear the high danger to keep up its serious edge on the lookout. The participants can carry upward strain to the business. In addition, the business can be productive in light of the new contestants and high income can be created, as it works in the food business and offers quality types of assistance to clients.

Rivalry among Established Companies

                         There is high rivalry in the business by the competitive-organizations and the power is high-due to inventive thoughts by the adversaries. Dominos bargains in the food business where the strength of the contenders can carry higher benefit to the business. As the organization develops, the business develops. There is upward tension on the business for income age. The opposition makes flawlessness in the administrations and products. Each organization endeavors to offer its best types of assistance, which can develop the business and grow its value.

Bargaining Power of Buyers

Dominos is a fast-food company, which provides food services to its customers. The main buyers of the company are the local people residing in Japan. There is a high bargaining power force because buyer always demands the best quality at minimum price. This creates a decline in the company’s profitability and the industry bears the loss because of less revenue generation. The forces create downward profitability in the industry…………….

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