Papa John’s International Corporation

Company Mission and Critique

Papa John’s International Inc.’s current mission is to focus on the customers, team members, franchises, and shareholders. Because Papa John’s wants customer satisfaction, the firm uses fresh ingredients to produce high quality pizza. The corporation ensures team work by providing a training program to the employees; hence, they are able to work on a level ground where by they understand each other. This motive perpetuates the spirit of team work. By doing this, Papa John’s has created a superior brand loyalty through true, superior quality products, well-known customer relations, and an excellent community service. With such a strong mission in place, Papa John’s is bound to succeed and create a bigger business empire that will outmatch the competitors.

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Outside Stakeholder Groups

The two outside stakeholder groups in Papa John’s International Inc. include the shareholders and customers.

Shareholders

Shareholders are the ones who provide equity capital to finance the daily functioning and operation of Papa John’s International Inc. Because the shareholders are responsible for firm’s financial resources, they present varying interests. Most of them are interested in earning returns from their investment in the company. Others prefer that Papa John’s management should strictly limit risks. The shareholders also have a differing preference for the timing of the returns as some of them are interested in the immediate benefits while others in long-term benefits. This has led to ideological conflicts among the shareholders as they have differing needs for controlling the company.

For Papa John’s to reconcile the conflict, the senior management must put efforts to use the correct approach that will bring out the picture of the relative importance the shareholders of the company. The company should act towards satisfaction of the financial interests of the shareholders (Papa John’s, 2016). Handling the shareholders according to their different levels of interest will bring about harmonious coordination of various parts of the firm, which will underpin its success.

There are two types of shareholders in Papa John’s International Inc. namely institutional investors and mutual fund holders. The institutional investors own approximately 85.8% of the total shares in the organization (Papa John’s, 2016). The institutional investors hold a percentage float of 117.48 in the company. The mutual fund holders own 50% percent of Papa John’s International Inc. (Annual 10-K, 2016).

Customers

The firm’s customers comprise a major part of the external stakeholders. Therefore, it has an obligation to ensure that the needs of the customers are met and if this does not happen then the company will most likely go out of business (Navarro-García, Arenas-Gaitán, & Rondán-Cataluña, 2014). The customers always demand quality and safe products and the integrity of the service providers. Therefore, management at the firm has a duty to ensure that the designing, production, and selling of high quality and standard pizzas. Papa John’s International Inc. keeps the interests of the customers in mind when making decisions on new flavors. It is important for the company’s management to offer common and quality training to the employees. This strategy will ensure customer satisfaction across various sectors of the company because they will be equipped with the best ways of treating the customers.

External Environment

Factors that have contributed to the Success of Papa John’s International Inc.

The most important element that has contributed to the success of Papa John’s is the availability of a ready market for their goods and services. Without a reliable market, no business can thrive. The firm is located in an environment with a large working population that spends surplus income in buying its luxurious services. The availability of a large population with a taste for their goods and services has resulted in an increase in demand and, consequently, Papa John’s will put more effort to intensify its supply (Annual 10-K, 2016). This inclination to a good market position has contributed to the thriving of the business.

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In addition, the availability of affordable raw material for the production of Pizza and other products has also promoted the company’s activities. The unavailability of raw materials can paralyze its daily activities (Köseoglu, Ross, & Okumus, 2016). This situation can lead to an ultimate end of production, which can result in the loss of customers and eventual closure.

Besides, the availability of improved better roads and affordable, accessible, and fast methods of propulsion have had a significant impact on the successfulness of the business. Good roads enable fast transportation of perishable goods to Papa John’s International Inc. (Köseoglu et al., 2016). The vehicles are also cheap in terms of transportation cost due to favorable federal laws that have lowered the taxation on fuel products. As a result, the company is able to work efficiently and smoothly. Lastly, the existence of favorable federal laws governing the worker’s compensation, minimum wages, and payroll taxes has boosted the business significantly (Köseoglu et al., 2016). Since most of the workers in Papa John’s industry are middle earners, the company pays them at standard affordable rates and still makes enough profit to maintain the daily running of its operations.

Strengths of Papa John’s Competitive Forces

The competing industries greatly challenge its development. Some of the competitors are well-established with a larger pool of financial sources and other essential resources that the John’s International Inc. lacks. Some of the competitors have also been in existence for a longer period of time than this firm (Köseoglu et al., 2016). Therefore, they have a higher level of penetration to the market and a stronger, more established ways of advertisement in the market.

Within the QSR pizza category, Papa John’s competitors such as Caesars and Domino’s dominate the national chains (Syed, 2016). When one or more of Papa John’s competitors change their pricing or even other marketing strategies, they impose a lot of damage to Papa John’s sales and earnings. Indeed, the firm faces an active competition even in the most attractive commercial real estate cities. The supermarkets continue to increase their supply of fresh and frozen pizza to the customers, further imposing a big threat to then Papa John’s International Inc.

Industry Factors Driving Change to the External Environment

One of the major industry factors driving change to the external environment in regard to Papa John’s International Inc.’s activities is the continuous expansion and building of more restaurants in the newly identified real estate cites. This state has affected the external environment as more land is cleared to create room for construction. Wastes from Papa John’s industry such as used polythene bags and wrapping materials render the external environment dirty when carelessly disposed of.

The US Market and Market Position of Papa John’s International Inc.

Papa John’s International Inc. functions under five primary divisions in the US namely the North America commissaries, domestic restaurants of the company, North America franchising, international operations, and all other business entities. The headquarters of Papa John’s International Inc. is located in Louisville in Kentucky.

Comparing the Strategies of this Company and those of its Competitors

The firm’s competitors in the international market have a beta of 0.6. This value indicates that their average stock price 33% less volatile than S&P. On the other hand, Papa John’s International Inc. has a beta of 0.5, indicating that its average international stock price is 50% less volatile than the S&P 500 (Annual 10-K, 2016). This shows that the company’s products are better as compared to those of its rivals.

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Future Factors that must be watched at the Present

At the outset, there is a high of a demand for restaurant goods based on price, consumers income, and advertising. If this position poses a high risk to Papa John’s International Inc. then the firm should ensure that all the featured companies keep their foods and labor costs under checks and control in addition to creating new products to keep customers coming into the restaurant (Annual 10-K, 2016). This approach will enable Papa John’s to remain relevant and profitable.

The United States and Global Markets

The top markets inside the US are the North America commissaries and North America franchising. The markets outside the US are the international operations in Asia, China, and Africa. The strategic goal in the global market is to expand its pizza business by establishing branches in other countries. Papa John’s International Inc.’s global competitive strategies include providing fresh and comparatively cheaper food products to customers. This objective will entail the creation of a superior brand loyalty through authentic, superior quality products, legendary customer relations, and exceptional community services (Annual 10-K, 2016). However, other businesses similar to Papa John’s are already in the market with outstanding brands that will possibly pose stiff competition to its business.

Internal Analysis of Papa John’s International Inc.: SWOT Analysis

Strengths

To begin with, Papa John’s uses high-quality ingredients that are fresh in the pizza production. Most of its competitors use frozen pizza. Thus, the firm meets the customers’ expectations as compared to its competitors (Hoover’s, 2014; Zikmund, Babin, Carr, & Griffin, 2013). To ensure constant quality of its products, the firm uses its resources in the dough production facilities and commissaries for monitoring. In addition, the company offers an efficient and strong employee training thereby it produces high-quality workers who know how to handle customers in an ethical manner (Barrows, Vieira Jr, & DiPietro, 2016). Its competitive advantage squarely relies on the ability of the store managers to properly train employees, which has created a good customer experience. Furthermore, the organization has a powerful marketing strategy that enables it to reach out customers at the local and regional level. It also has an efficient restaurant layout that is employee friendly. Customers can see through the entire store and watch the pizzas being made (Barrows et al., 2016). The layout also provides the employees with a clear view of the restaurant’s front in a way that enables them to serve the customers better.

Weakness

Papa John’s is still considered new in the market and it is not as large as the competitors who have double amount of stores (Weinzimmer & Nystrom, 2015). In addition, it has limited menu items as compared to the competitors who have a wide range of items in their menus. It is also difficult for the customers to switch loyalty as many of those competitors already have their favorite customers.

Opportunities

The company has an opportunity to add more items on its menu to allow customers to choose their favorite food from a wide range. For instance, they can add sandwiches to salads to the menu which will satisfy the needs of some customers (Weinzimmer & Nystrom, 2015). Since Papa John’s is still treated as a new company, it can establish strong brand recognition to attract customers. Furthermore, it can open more stores to seize a larger market size. In addition, the company can use the power of the internet especially the social media to market its pizza products (He, Wang, & Zha, 2014). This strategy will increase its popularity in the market.

Threats

Papa John’s competitors offer a wide variety in their menu while Papa John’s offers a selected few services (Weinzimmer & Nystrom, 2015). Competitors have better brand recognition methods as compared to Papa John’s.

However, the company’s tangible goods have a higher competitive value because they use fresh ingredients in the manufacture as compared to the competitors. As much as the competitors are able to reach many customers due to their large market range, Papa John’s has the advantage of establishing a stronger brand which will attract more customers.

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Annual 2016 versus 2015 Revenue and Net Profit Comparison

Annual 2016 versus 2015 Revenue and Net Profit Comparison.

References

Annual 10-K. (2016). Papa John’s 2016 annual report. Web.

Barrows, C., Vieira Jr, E., & DiPietro, R. (2016). Increasing the effectiveness of benchmarking in the restaurant industry. International Journal of Process Management and Benchmarking, 6(1), 79-111.

He, W., Wang, F., & Zha, S. (2014). Enhancing social media competitiveness of small businesses: Insights from small pizzerias. New Review of Hypermedia and Multimedia, 20(3), 225-250.

Hoover’s. (2014). Papa John’s International, Inc. Web.

Köseoglu, M., Ross, G., & Okumus, F. (2016). Competitive intelligence practices in hotels. International Journal of Hospitality Management, 53(1), 161-172.

Navarro-García, A., Arenas-Gaitán, J., & Rondán-Cataluña, F. J. (2014). External environment and the moderating role of export market orientation. Journal of Business Research, 67(5), 740-745.

Papa John’s. (2016). Papa John’s announces third quarter 2016 results. Web.

Syed, I. (2016). SWOT analysis and operation management decisions of Domino’s pizza. Web.

Weinzimmer, L. G., & Nystrom, P. C. (2015). The search for opportunities by small business owners. Journal of Small Business Strategy, 7(3), 1-14.

Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2013). Business research methods. Boston, Massachusetts: Cengage Learning.

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