Dominos Business Model and SWOT Analysis 2022 – How Does Dominos Make Money?

Overview

Dominos Pizza is a pizza business that runs corporate-owned and franchisee-owned shops in the United States and worldwide. U.S. Stores, Supply Chain, and International Franchise are the three business segments that the business executes.

The Supply Chain division is responsible for operating regional dough production and supply chain facilities. This Michigan-based corporation was created in 1960 by brothers James and Thomas Stephen Monaghan, and its headquarters are in Ann Arbor, Michigan.

Company Profile

Company Name Dominos Pizza, Inc.
Website dominos.com
Founded December 9, 1960
Founders Tom Monaghan & James Monaghan
Key People Richard Allison – Chief Executive Officer, Kelly Garcia – VP & Chief Technology Officer, Russel Weiner – Chief Operating Officer, Stefania Gvillo – Senior VP, Kevin Morris – VP, Cindy Headen – VP of Supply Chain, Joe Jordan – VP of International, Dennis Maloney – Chief Innovation Officer, Lisa Price – Chief Human Resources Officer, Art D’Elia – VP & Chief Marketing Officer
Headquarter Michigan, United States
Company Revenue $4.371 billion as of September 2021
Key Competitors McDonald’s, Starbucks, Pizza Hut, Zume Pizza, Little Caesar’s, Subway, Burger King, Carl’s Jr, Dunkin’s Donut.

What is Dominos? A Brief History

Dominos Pizza is a well-known pizza delivery service that offers a wide selection of pizzas.

Dominos has become synonymous with freshness, high quality, and excellent customer service in current trends. As a result, there has been a steady rise in the popularity of this fast-food chain.

Ypsilanti, Michigan’s first Dominos opened its doors in 1960 with only one location.

The Dominos Tracker® was introduced in 2008 by Dominos. Customers may now stay updated on the status of their orders thanks to cutting-edge technologies.

Dominos started out small, with just one store in Ypsilanti, Michigan, in 1960.

In 2008, Dominos launched an industry-first Dominos Tracker®. The revolutionary technology allows customers to follow the progress of their order online.

You can get a pizza for free if Dominos gets to your vehicle within two minutes of placing your order through the Dominos app or website.

Over 60 years, Dominos brand has evolved into the most well-known and successful pizza company globally.

How Does Dominos Work and What Does it Offer?

So how exactly does Dominos work?

It is well-known that Dominos pizza is of the highest quality and freshness. The packaging for the food items is specifically designed to maintain the freshness and heat of the contents.

Non-vegetarian and Vegetarian options are also available on the menu. To gain a competitive advantage, Dominos has developed an innovative idea of regionalizing its tastes.

Small, medium and large are the accessible sizes at Dominos. There are a lot of different pizzas to choose from. And the most prevalent pizzas are the Mexican Green Wave pizza and Country Special pizza.

 

What does Dominos offer to its consumers?

Pizza is not the only thing Dominos specializes in.

Garlic Bread Sticks, Calzone pockets, Taco Indiana, Stuffed Garlic Bread Sticks, , Chicken Wings, Pasta Italiano (white sauce), Butterscotch Mousse Cake, and Spicy Chicken may also be found here.

 Fanta, Thumps-up, and Coke have all made their way onto the menu.

On top of everything else, that is not the only demographic Domino aims to reach, as its slogan is “high quality at a fair price.” So they concentrate on the middle class and lower-middle-class income people.

Dominos has developed a pricing strategy that is fair and consistent. As a result, consumers are more likely to buy from the firm.

Dominos Business Model 2022

As a purpose-driven and result-oriented organization, Dominos is devoted to fueling the spirit of potential, a pizza per time with awesome people.

Core principles about how the entity conducts its company, respect employees, assist franchisees, and a set of values defines service customers:

Take Action on The Right Thing

No matter how tough or controversial the situation may be, they behave with honesty and adopt professional judgments. The foundation of their collaboration is based on a set of high ethical principles and an extraordinary level of integrity.

As a company, it is devoted to providing the best service possible while also positively contributing to the society.

Prioritize People

As a result, the company strives to cultivate a workplace where everyone feels valued. Everyone in the team is treated with professionalism, respect, and appreciation for the unique contributions they make.

Every day, the company encourages every team member to work hard and create an environment in which every staff member can be their authentic selves, feel a sense of purpose, and realize their full professional potential.

Build Insightful Strategies

Entrepreneurial and innovative spirits lead the company. Embracing and leading innovation is the only way it can continue to grow and improve.

To unleash its joint capacity, the entity must work collectively. Actions speak louder than words; the company is always looking for innovative and creative solutions for customers’ problems.

Dominos Unique Selling Propositions

Because Dominos has complete control over the quality of its products and customer satisfaction, it has been a resounding hit as a franchisor. In order to keep control, the corporation follows these steps:

Purchasing and Distribution: Purchasing and distribution operations offer high-quality ingredients at affordable prices, allowing franchisees to focus on various aspects of the company.

Choosing a Franchisee: Most of the business’s franchises are located in the United States and they began their careers as chauffeurs or workers at the stores.

Dominos management expertise is a must for prospective franchisees, according to the organization’s policy. In addition, Dominos ensures the integrity of its brand by only working with franchisees that have a thorough understanding of the company’s business strategy and culture.

Distribution: Dominos has an effective distribution system to ensure that consumers receive a fresh, hot and high-quality pizza on time.

How Does Dominos Make Money?

Dominos generates their income through several revenue streams as follows:

Local Franchising

The local franchise focuses on franchisees that open Dominos stores in the United States regardless of any state. Franchising has been a big part of Dominos success. Because of this business approach, the company has gained a lot of franchisees.

In addition, there are a lot of things Dominos does to make sure its employees and franchisees are the best they can be.

Franchisees typically sign ten-year contracts with Dominos that include renewal options. Plus, they pay the corporation a 5.5 percent royalty on sales.

International Franchising

One of the largest pizza businesses, Dominos operates in over 90 worldwide regions and continues to expand.

The majority of Domino’s foreign operations are made under the master franchise agreements. Basically, the franchisees have a huge potential in leveraging the market share.

Other than that, Dominos charges a one-time fee for international franchising plus a royalty fee from franchisees every time they open a new store. Usually, the fee is charged at 3% of sales as the royalty fee.

This pizza brand company has gained thousands of opening outlets across many countries with promising branding. The royalty fees only accounted for 6% of the total company’s revenue in 2019.

Dominos SWOT Analysis

Dominos is a world-class Italian fast-food company that has many competitors, especially Pizza Hut, KFC, and Mcdonald’s. The company has now becomes the first pizza company with the most pizzas sold worldwide. Therefore, we will look through the lens of SWOT analysis to see the company’s competitive advantages.

Strengths

  • Dominos has a big portfolio and is well-recognized as a fast-food company providing first-class pizza.
  • The firm has established creative, aggressive marketing movements
  • The company acquires outlets in over 60 countries worldwide
  • There are nearly 10,000 outlets and franchisees
  • Sizable network channels and sustainable supply chain networks all over the world
  • The company offers a fast service delivery with a low price tag to draw lower and middle-class families
  • Offer a simple menu that is easy to order
  • Ensure high-quality ingredients with the freshness of the pizza
  • Provides a fast and furious delivery service that delivers food to the customer’s door in less than 30 minutes.

Weaknesses

  • Monitoring operations are challenging for the business with a lot of franchisees. Different franchises offer distinguished flavor; consequently, it might lead to a bad image of the company.
  • Fast-food revenue has been reduced due to the knowledge and awareness of health concerns by many people.
  • Staff turnover rate frequently happens because they are mostly teenagers who find jobs during their vacations.
  • Low-trained staff often make bad services; therefore, it might affect the business as well
  • The company outlets are still scarce in some countries. It demands more local eateries than a well-designed store.

Opportunities

  • The fast-food company can leverage franchises in more developing countries
  • Offering low-price pizzas and beverages can attract a lot of people
  • Developing local stores would cost less expense and increase income for potential franchisees
  • Adding more vegetables and other healthy ingredients to the food might help bring the old customers back to order the company’s foods.

Threats

  • Pizza Hut, Mcdonald’s, and other fast-food companies remain a threat for Dominos as people often shift their favorite meals
  • Healthy diets can cause serious trouble for the company. When people know more about healthy foods, they will not eat fast food anymore. Thus, the company’s sales might be affected
  • If the raw materials increase, the company will face income difficulties because it offers low-price pizzas and beverages.