Introduction
Domino’s Pizza is a globally known American public company functioning as a restaurant chain. The company is engaged in take-out and delivery of food and has been expanding its facilities across the globe with the franchising approach. Being originated in Michigan, where the company’s headquarters are now, Domino’s Pizza has been practicing multiple globalization strategies throughout the years of its existence. Opening facilities in North America, Asia, and Europe through franchising allowed the enterprise to dominate the industry of pizza making and selling and outperform its competitors. The strategy for global expansion has been one of the priorities of the company, which is seen from its business decision, marketing strategies, and developmental solutions. The most recent project that Domino’s Pizza has launched is the opening of facilities in Japan.
The company located its restaurants in Japan to explore the Japanese food market and enhance its presence thereby eliminating potential competitors. Since pizza is an unconventional food in Japan, the introduction of the company’s products to potential customers is influenced by many challenging factors, as well as opportunities for popularization, sales, and growth.
Domino’s Pizza is one of the world’s leaders in the food production industry and pizza delivery in particular. Being launched as a small pizza-making store in a town in the USA in the 1960-s, Domino’s Pizza has expanded to significant sales volumes and store numbers worldwide. Following its first international store opened in Canada in 1983, the company launched its affiliations in Australia, the United Kingdom, Asia, and the countries of South America (“History”). Around the same time the first stores were opened in Japan in terms of franchising, business owners in Japan were in charge of the Japanese stores that were managed according to American standards.
In the 1980-s and 1990-s, Domino’s Pizza is recognized to be the fastest pizza company with thousands of facilities opened and functioning according to the same standards. At present, Domino’s Pizza is the world’s leader in pizza delivery. According to the official website of the company, it serves more than 1 million customers “on every inhabited continent on Earth” with sales rates of “more than 500 million pizzas worldwide every year” (“The World Leader in Pizza Delivery” par. 1). Currently, Domino’s owns approximately “11,000 stores outside of the United States in over 90 international markets” (“The World Leader in Pizza Delivery” par. 1). Overall, now the company “owns the master franchise rights to seven markets including Australia, Japan, New Zealand, Belgium, France, The Netherlands, and Germany” (Heffernan par. 11). The company values quality, integrity, technological advancement, continuous growth, and customer prioritization.
The modern tendencies in the company’s strategy are a further international expansion of its business facilities and the implementation of technologies into the business processes inside the company and in connection with customers. Within the realms of continuous global development, the company opened “the first stores in Bangladesh, the Czech Republic, and Luxembourg” in 2019 (“History” par. 61). As for the technological implementation into the business processes, this strategy has been pursued through collaborative efforts with in-vehicle commerce company Xevo for more mobile and information technology-driven pizza delivery. In the most recent time, the company invests in creativity and innovation. Electric bike delivery, GPS delivery, and improved online ordering technologies help the company to lead the market of pizza selling (“History”).
The financial performance of Domino’s Pizza might be estimated as stable and growing in the background of new facilities and stores opening in various corners of the world. Indeed, some latest estimates indicate that Domino’s annual sales vary around $5.9 billion (Kelso). With its new project, the company follows its business principles and enhances its presence in Japan by taking full control over the Japan-based stores by taking the shares from its local partner and opening new stores to enhance its market presence and increase delivery speed.
The present paper aims at assessing Japan as the country for the project implementation and the project within the country’s market forces. It is argued that given the relatively insignificant competition in the Japanese pizza delivery market, the potential for selling products at higher costs, and the prospects for highly competent, qualified, and innovative human resources available in the country, the project is expected to be successful.
Country Assessment
The currently implemented project of maximizing Domino’s ownership of its Japanese facilities is influenced by several significantly important factors. These factors are conditioned by the economic, political, trading, and business functioning environment of the country. When discussing the project, Domino’s addresses the necessity to expand its presence in the Japanese market by opening new stores and maximizing the ownership of its shares to facilitate delivery rates (Kelso par. 7). The long-term presence of the company in the Japanese market allows it to integrate its experience to the demands of the local consumers and business environment.
It is essential to assess the economic, political, and demographic issues characteristic of the country to understand the prospects of the project in the identified location. Japan is a developed country with a high level of technological advancement, economic stability, innovation, and political security. The overall social environment is stable and suitable for enhancing the business presence of the corporation.
Indeed, the economic stability and development of the country are some of the most significant factors that contribute to the likelihood of the project being successfully implemented. Since Japan is a home for many big companies, the market environment for launching the project provides facilitating opportunities for Domino’s Pizza as well. Also, the continuous efforts made by the local government in terms of improving the economic opportunities and business launching play a significant encouraging role in pursuing the intended goals.
Technologies and innovation constitute other decisive factors that contribute to the success of the project. Japan is one of the world’s leaders in innovative solutions and digitalization. Since Domino’s Pizza is particularly interested in enhancing its business processes and delivery opportunities by implementing digital solutions, Japan is the most favorable environment for the successful implementation of such plans (“History”; Teoh 1-2).
It is anticipated that the favorable business environment for implementing complicated digital solutions and the favorable attitude of potential consumers to such strategies will result in beneficial outcomes for the company. Indeed, the readiness of the target market to consume through the channels innovatively introduced by the company plays a significant role in the overall ability of the enterprise to meet consumer needs. This aspect is closely connected with the demographic and social factors pertaining to the country’s assessment.
Indeed, one of the factors that pertain to the particularities of the country is society’s preferences and the demand for the product introduced by the company. Since pizza is not a traditional food choice for the Japanese people, they treat it as an expansive and extraordinary threat. Despite the fact that the diminished popularity of the product might serve as a negative factor, Domino’s long-term experience in adjusting its menu and marketing strategies to the local population will be the basis for successful project implementation.
On the other hand, the sociological and demographic issues are relevant to the business processes in general and human resources in particular. According to Ono, Japanese workers tend to work longer hours than it is normally expected in the majority of countries, which implies more integrity and a higher level of productivity (35-36). However, since the company is American-originated and functions in terms of franchising that implies standardized organization of work inside the company, Domino’s might be contributive to the workforce environment of Japan. Indeed, currently, the country seeks solutions to the problems associated with increased working hours; thus, Domino’s enhanced presence in the labor market might be a trigger for a positive change in this respect (Ono 36-37). Thus, the country assessment demonstrates positive prospects for the project’s success.
Project Assessment
The business project of expanding the Domino’s chain of pizza stores in Japan is validated by the monetary benefits, competitive advantage, and reputational ambitions as a leader in the industry. In general, “the idea is simply to add more stores to existing markets to cut down on delivery times and be closer to carryout customers” (Kelso par. 7). Such an approach is relevant to the company’s strategic goals of continuous international growth and is in line with its quality-driven competitive ambitions. To assess the case, one might apply the concepts of the mode of entry, business strategy, supply chain management, and human resource issues.
The mode of entry of the company to the Japanese market is franchising, which is characterized by the standardized approach to opening new stores and organizing the pizza production and delivery processes according to the original principles. The particularity of the current project is that it allows for “Domino’s to move to 100 per cent within three to five years” (Heffernan par. 4). In such a manner, the company will have freedom of decision-making being bound to its internal regulations and the country’s laws when conducting its business operations. Thus, the chosen mode of entry is a positive prospect for the implementation of the project.
Furthermore, the organization will be able to integrate local skilled workers with the relocated workforce to meet the human resource demands of the project. Indeed, the highly educated and experienced professionals available from the Japanese labor market might be a beneficial asset in the project (Ono 35-37). The strategy that Domino’s Pizza is likely to use in Japan is standardization due to the already available production principles and technological tools. However, specific features of the country and the novelty of pizza in the social environment, the company might integrate localization aspects to its business processes.
In particular, the marketing solutions that would introduce the product and the company to the potential customers are culturally sensitive and target the tastes and demands of the Japanese people. Moreover, the menu updates for Japanese stores are influenced by the local cuisine preferences. In such a manner, the company is capable of achieving success with its project by incorporating localization and standardization strategies.
As for global production and supply chain issues, the implementation of the project allows for adequate utilization of supply chain opportunities given the already existent chain of Domino’s Pizza stores in the country. With solid production and business functioning strategies, the company will be able to achieve its goals of increasing the number of stores in Japan to 850 by 2022 (Heffernan).
Moreover, the achieved financial success in the country within the first year of the project allows for assessing its economic potential as a contribution to positive goal achievement. In particular, as the estimates indicate, “the Japanese arm of Domino’s generated $225.1 million in sales in the six months to January 1, thanks partly to 19 new stores being opened” (Heffernan par. 9). Moreover, the overall “earnings before interest, taxation, depreciation and amortisation surged 33.6 per cent to $116.2 million’ within the first six month (Heffernan par. 10). Thus, such prospects indicate that the project has a potential of being successfully implemented with the company’s goals achieved.
Conclusion
In summation, Domino’s Pizza is implementing the project of maximizing its ownership of its Japanese facilities and increasing the number of stores in Japan to 850. Japan as a target company within the project is a reasonable choice due to the economic and political stability in the country, its investment in innovation and digitalization, and the progressive human resource solutions. The strategies of standardization within the franchising entry mode and the integration of localization elements to meet the demands of customers will allow for increasing sales.
The implementation of digital solutions, innovative delivery, and new approaches to marketing serves as a background for higher speed of delivery and increased competition. Therefore, the project and country assessment allow for concluding that with the application of its experience, Domino’s will be able to pursue its business goals by intensifying its international market presence and contributing to its reputation as the world’s pizza delivery leader.
Works Cited
Heffernan, Madeleine. “Domino’s to Take Full Control of Japan Pizza Business”. The Sydney Morning Gerald, 2017. Web.
“History”. Biz Dominos, 2020. Web.
Kelso, Alicia. “How Domino’s Plans to Continue Dominating the Pizza Market”. Forbes, 2019. Web.
Ono, Hiroshi. “Why Do the Japanese Work Long Hours.” Sociological Perspectives on Long Working Hours in Japan. Japan Labor Issues, vol. 2, no. 5, 2018, pp. 35-49.
Teoh, Wenji. “The Market Risk on Domino’s Pizza Incorporation’s Performance”. MPRA, 2019, pp. 1-39. Web.
“The World Leader in Pizza Delivery.” Biz Dominos, 2020. Web.