dominos pizza crisis evaluation
Post on 21-Oct-2014
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Dominos Pizza: A Crisis Management Case Study
Simon ZamanMBA, USA.
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Company BackgroundDomino's Pizza is an internationalpizza deliverycorporation headquartered inAnn Arbor,Michigan,United States. Founded in 1960, Domino's is the second-largest pizza chain in the United States.Domino's currently has nearly 9,000 corporate andfranchisedstores in 60 international markets and all 50 U.S. states. Domino's Pizza was sold toBain Capitalin 1998 and went public in 2004.Current Top ManagementJ. Patrick Doyle, CEO from March 2010, formerly president of Domino's USA
Origin of Crisis
Stages:Detection phase begin with a warning sign, If crisis can be detected it provides lead-time before it is public. Preparation: Is necessary for dealing with crisis that cannot be prevented.Refers to the effort to limit the duration of the crisis or to keep it from spreading to other areas affecting the organization. Recovery: Returning to business as usual . It also means restoring the confidence of key publics, which means communication a return to normal business. The learning phase is a process of examining the crisis and determine what was lost, what was gained and how the organization performed in the crisis.
Theoretical OverviewThe five stages of crisis1)Detection2)Prevention/preparation3)Containment4)Recovery5)Learning.
No warning sign for Dominos but they recognized the crisis very early. They took 48 hours to prepare and come up with a strategic response to the crisis. From the start of the crisis till now. More elaborate description in learning slide.
Response to crisis & Timeline
Dominos corporate team suddenly gets the words from a consumer affairs blog, the Consumerist, that its staff had discovered and posted these videos on internet-where they instantly went viral.
The video was sent to the all top management personals.
The first instinct was it could not be a real video but after observing the video they realized the employees are in uniform and it took place inside the store.
Response to crisis: First 48 Hours
Identify the faces.Distributed them nationwide to their internal network, asking them if they recognize them. Around 11 pm same day the management was able to locate the store. Tuesday 7.30 pm the social media team spotted comments in Twitter.Wednesday afternoon created twitter account @dpzinfo.Responded saying we have spotted the incident and working on it.
Response to crisis(contd)
Easter Sunday the top management was in vacation with family. (Day of incident).Wednesday afternoon, Doyle the president had flown back from Florida.Wednesday YouTube post had 1 million hit.It was communicating through twitter, YouTube and other websites. Deleted the original video from YouTube.This is a fact that there are 307 million people in America. There are a lot of people who dont know about it; lets focus on talking to the audience thats talking to us. Tim McIntyre, VP Communications of DP.
press response Dominos corporate website
Nothing is local anymore, thats the challenge of the web world. Any two idiots with a video camera and a dumb idea can damage the reputation of a 50 year old brand.
The opportunities and freedom of the internet is wonderful, but it also comes with the risk of anyone with a camera and an internet link to cause a lot of damage, as in this case, where a couple of individuals overshadow the hard work performed by the 125,000 men and women working for Dominos across the nation and in 60 countries around the world.
Analysis of Events
Apology When it comes to publics, the organization must know which publics have negative impressions and what the extent of their knowledge is.If the crisis is derived from social medias or online it should be resolved through it. Public relations aims to reinforce positive attitudes, change negative attitudes, and provide information
On 3 March 2008, purchased Pinkys Pizza, a pizza chain which operates 27 stores in Victoria, New South Wales and South Australia.
Dominos operations in France, Belgium, the Netherlands and the Principality of Monaco from Dominos Pizza Inc, giving the Company its first foothold in Europe.
Third-quarter 2009 profit of $17.8 million was up from $10.1 million in the third quarter of 2008.
The European purchase sees Dominos surpass the 500th store mark
During the fourth quarter, the Companys domestic same store sales grew 1.4% as a result of increased store traffic. International same store sales grew 3.9% in the fourth quarter, marking the 64th consecutive quarter of same store sales growth for this division
Rise in online sales nearly 40% pizza is ordered online
Before and after the presidents Video
Before Most People said, oh, this is gross, oh my god Im never eating at Dominos again oh I think it happens all the time. After By Turinas | NEW YORK, NY April 16, 2009 07:58:00 am:I agree with Pete. Check out the discussion on Twitter by searching on #dominos and #dpzinfo. The President of Dominos video response is being spread about as evenly as the original video. Comments seem to be neutral to positive on the whole.By DeaverB | Lincoln, MA April 16, 2009 08:39:16 am:Domino's will come out stronger because they responded. This is also a lesson for other consumer brands to be responsive. It also shows the challenges of hiring people.By Steve | Westmont, IL April 16, 2009 09:40:45 am:I would applaud Domino's for swift action. And applaud the online community for calling out the deviants who posted it.
Source : Advertising Age : http://adage.com/article?article_id=136015
Train the employees.Identify the crisis team-Top ManagementImagine your nightmare scenarios.Track the blogs and social media.Dont wait.Taking commercial breaks sometimes is not required. Dominos invested more on advertisement afterwards.
What happened to these idiots-where are they----In Jail???
It seems although the images were shocking, the company has succeeded in reacting well to the event. Online trend tools indicate that the buzz around it lost interest.