individual assignment - dominos pizza

UNIVERSITI UTARA MALAYSIA

KUALA LUMPUR CITY CAMPUS

BJMP5023 OPERATIONS & TECHNOLOGY MANAGEMENT

DOMINO’S PIZZA

LECTURER:

DR. MARTINO LUIS

PREPARED BY:

GROUP ASSIGNMENT

NOR AZHAN BIN MOHAMMAD NOR (806580)

DATE SUBMITTED:

25TH NOVEMBER 2012

INDIVIDUAL ASSIGNMENTBJMP5023

Contents

1.0 OVERVIEW.........................................................................................................1

2.0 HISTORY.............................................................................................................1

3.0 PRODUCTS........................................................................................................3

4.0 VALUE AND SUPPLY CHAIN.............................................................................6

5.0 OPERATIONS STRATEGY..................................................................................8

6.0 TECHNOLOGY..................................................................................................11

7.0 CONCLUSION...................................................................................................12

8.0 REFERENCES..................................................................................................13

OPERATIONS & TECHNOLOGY MANAGEMENT Page | i


1.0 OVERVIEW

Domino’s Pizza is the No. 1 Pizza Delivery Company in the world and the

undisputed pizza delivery expert. The Company has a unique business and

operation model and is a pioneer in the fast food industry. Since 1960,

Domino’s Pizza has successfully expanded from 3 outlets in the United State

to 9,350 stores operating in seventy countries. Domino’s operation in

Malaysia and overseas uses the franchise model. The parent company,

Domino’s Pizza LLC is head quartered in Michigan, United State of America. It

maintains overall control on the sourcing and supplying of raw materials to the

master franchises and enforces quality of the service and products sold.

2.0 HISTORY

The legend of Domino’s Pizza dates back to December, 1960 with the pur-

chase of a small pizza shop in Ypsilanti, Michigan by brothers Tom and Jim

Monaghan. The brothers bought the restaurant from friend Dominick DeVarti

for USD500 cash and assuming the stores USD8,000 debts. Neither Tom nor

Jim had the intention of making the restaurant business their career, but

rather saw the opportunity as a part-time venture to help cover the cost of

their studies at the nearby University of Michigan. By June the store was earn-

ing a profitable USD400 a week but briskly fell off when students at the Uni-

versity went home for summer. Faced with the prospect of a slow phase, Jim

sold Tom his half of the business in 1961 and changed the name from Do-

minick’s to Domino’s. The same year, Tom decided to quit school to devote

more time to the business.

Aware of his lack of experience in pizza making and operations and manage-

ment, Tom spent much of his time visiting many similar pizzerias around the

state acquiring advice on operations and recipes. By the mid 60’s, Tom had

restructured the interior of the store, rearranged all areas and systems, ulti-

OPERATIONS & TECHNOLOGY MANAGEMENT Page | 1


mately improving the flow of work in all facets of the operation from order-tak-

ing to delivery. Monaghan’s system was reminiscent of those developed by

the managers of White Castle Hamburger in the 20’s and the McDonald broth-

ers in the 40’s. The implementation of this system formulized the production

process as a unified whole, and included the standardization of materials,

clever and thoughtful placement of equipment, and detailed division of labor;

all geared to achieve the continuous production of its limited product line. By

1967, Domino’s emphasis on uniform quality and rapid delivery proved a suc-

cessful system for operating a pizza shop and therefore provided opportunity

for expansion through franchising.

The company landed in Malaysia in September 1997. Launched by its

founder, Tom Monaghan himself, Domino’s Pizza became an overnight

sensation. It was so well-received that Domino’s Malaysia’s commissary was

recognised in the Annual Domino’s International Audit as the Best

Commissary in Asia Pacific.

Malaysia's bullish food and beverage industry coupled with Domino's promise

of quality food and delivery service was highly accepted and gained new

customers nationwide.

As at early January 2012, there are 77 stores operating all over Malaysia, with

51 in the Klang Valley, 10 stores in Johor, 4 in Penang, 6 in Negeri Sembilan,

4 in Perak and 2 in Melaka.

With the healthy growth in Malaysia, Domino's extended its presence to

neighbouring Singapore in 2009. There are currently 13 outlets operating in

Singapore and growing aggressively.


PizzaSide OrdersBeverages30-Minutes Delivery Guarantee

15-Minutes Take-Away Guarantee

Free Delivery Service

Discount Coupon for future purchase

Credit Card payment for online orders


3.0 PRODUCTS

Exhibit 4.1 Domino’s Pizza Customer Benefit Package

Domino’s Pizza offers a wide range of meals to its customers. They offer

variety of pizza, pasta, side orders and beverages. They have 5 unique pizza

crusts i.e. Classic Hand Tossed, Crunchy Thin Crust, Cheese Burst Double

Decker, New York Crust and Extreme Edge to satisfy Malaysian customers’

appetite.

Exhibit 4.2 Domino’s Pizza 5 unique Pizza Crust

Domino’s Pizza also offered numbers of topping such as Ultimate Hawaiian,

7-Meat Wonders, Meatasaurus, Prawn Passion, Chicken Perfection, Tuna

Extreme, Prawn Sensation, BBQ Chicken, Aloha Chicken, Extravaganza,



Classified Chicken, Plain Cheese, Beef Pepperoni, Chicken Pepperoni,

Classic Chicken, Flaming Tuna, Meat Mania, Seafood Delight, Spicy Sambal,

Spicy Sausage, Tuna Temptation, Vegie Fiesta and Vegie Galore. Domino’s

Pizza also allowed their customers to customize their pizza by offering 2

options i.e. Make Your Own and Half & Half.

Exhibit 4.3 Domino’s Pizza delicious Specialty Pizza & Customize Pizza

Domino’s Pizza comes with 3 Signature Pizza Sauces such as Domino’s

Signature Sauce, Spicy Sambal Sauce and Top Secret Sauce.

Exhibit 4.4 Domino’s Pizza signature Pizza Sauces



Domino’s Pizza also serve varieties of side orders such as Chicken Wings

BBQ, Chicken Wings Hot & Spicy, Spaghetti Bolognese, Chicken Lasagna,

Creamy Custard Puff Desert, Garlic Twisty Bread, Garlic Cheese Onion

Rings, BreadStix, Banana Kaya Desert, CinnaStix & Icing and Chocolate Lava

Cake.

Domino’s Pizza also offers Coca-Cola, Sprite and Fruit Tree Fresh Apple &

Aloe Vera for its beverages.

The above products are considered primary goods for Domino’s Pizza and

these products will ensure that Domino’s Pizza customer’s needs of foods will

be fulfill.

Domino’s Pizza has introduced its Unique Selling Preposition (USPs) which

includes:-

1. 30-Minutes Delivery Guarantee! - Domino's is the only pizza

company that guarantees customer’s order will arrive within 30 minutes

or Domino’s will give its customer a free Regular Pizza voucher;

2. Product Satisfaction Guarantee - Domino's guarantees satisfaction!

Their pizza and side orders are guaranteed to be hot, fresh, and great

tasting when they arrives at customer’s doorstep, otherwise Domino’s

will replace the product or refund customer’s money.

3. 15-Minute Take-Away Guarantee - Domino's guarantees customers

will receive their Take-Away orders within 15 minutes or Domino’s will

give them a free Personal Pizza voucher.

4. Free Delivery - No extra charges for delivery to customer’s doorstep.

Domino’s Pizza also introduced discount coupons for its customers’ future

purchase. This method is really works for Domino’s Pizza where they tie-up



their customer with the attractive offer for future purchase. This will also create

loyalty among Domino’s Pizza customers.

Domino’s Pizza also allowed their online customers to pay their orders using

credit card where previously they only accept cash payment for the online

purchase.

The above services can be considered as peripheral services where it will

benefit Domino’s Pizza customers and will add confident for the customers to

choose Domino’s Pizza rather than other Domino’s Pizza competitors such as

Pizza Hut and Papa John.

Exhibit 4.5 Domino’s Pizza Unique Selling Prepositions (USPs)

Further to the above Domino’s Pizza also obtained a Halal Certification for all

its products from Jabatan Kemajuan Islam, Malaysia (JAKIM) which will add

more confident to Domino’s Pizza current and future customers.

4.0 VALUE AND SUPPLY CHAIN

It is important to consider how a customer need drives Dominos to create the

product. The customer need that drives the entire value chain is the need for

a dependable take away restaurant, reasonably priced hot quality food and

variety that suits the local palette.



Exhibit 4.1 Domino’s Pizza Value Chain

Dominos has focused on these key customer needs throughout the value

chain, and has not allowed any digressions in this area unlike other

competitors who have evolved a mixed model of full service restaurants and

takeaway outlets, or a hybrid combination of both. This has diluted their

strengths in the segment Dominos focuses on - Takeaway / Home delivery. Its

global operational model allows for lean stores, well-trained staff and flexibility

at a country level to customize menus to suit customer tastes. Operational

requirements have prompted the use of technology to make the customer

experience more enriching, it has a history of firsts – they were the first to use

TV as a distribution channel, an online tracking system that allows customers

to track the pizza order and a proprietary point of sale system. A combination

of the Company level strategy and the Operational Strategy has resulted in

Dominos having a reputation for reliability and consistent pizza quality – these

strategies have ensured that Dominos continues to meet its customer needs.

For instance, Domino’s Pizza is committed to leading the industry in product

quality and using the best ingredients for its customers. Domino’ Pizza also

includes local flavours into their menu as one of the key things that Domino’s

Pizza do to appeal to the local market, creating tasty and innovative

combinations.



Dominos Pizza has adopted the Make-to-Stock Approach for its Supply Chain

Management. The company supply chain is supports lean production and is

based on just in time stock management and stock control.

Dominos has an innovative supply chain model that ensures all purchases are

managed centrally across all franchises around the world. The core entity,

which runs the supply chain network, is called Dominos supply chain services

– a fully owned subsidiary which supplies the dough, raw materials (the

condiments, and ingredients that go into the food products), the kitchen

equipment / machinery.

This entity supplies to all the master franchises – effectively giving the

company a few key advantages:

(1) With a centralized buying department, the company is able to leverage

its buying power, and is able to negotiate the best costs for its

purchases. This also ensures purchases on a scale which makes

suppliers want to tie into the Dominos supply chain services. For

instance Coca-Cola is integrated into Domino’s supply chain network,

and is seen more as a partner rather than a supplier; this was made

possible because centrally Dominos has agreed to only sell Coca-Cola

products at all its outlets around the world.

(2) Consistency and Quality of products across the board - Since the

sourcing is centralized, this ensures consistent quality of food products

used, and similar machines / kitchen equipment that make training easy

for staff.

(3) Economies of scale: Dominos is also able to use its large buying power

to hedge better costs when commodity prices fluctuate; it also gives it a

better bargaining power with suppliers.



5.0 OPERATIONS STRATEGY

Other fast food chain such as Pizza Hut which operates conventionally, needs

a nice and big restaurant with an attractive layout to impress their customers

since their main business is for dining-in customers compared to Domino’s

Pizza which main business is pizza delivery. As such, Domino’s Pizza does

not need huge capital to start. Domino’s Pizza just needs a strategic place

and a well built user friendly and convenience website to attract customers.

Dominos operations strategy mainly focuses on the providing high service

quality to the customer:

1. Minimize operations cost: To minimize the operating cost by improving the

efficiencies and process at the stores.

2. Strategic store locations to facilitate the delivery service: To leverage the

strategic location of the store in order to facilitate quick service to the cus-

tomer and maximize the revenue.

3. Production oriented store designs: To utilize the production oriented store

design in order to facilitate efficient production and quick service to the

customer.

4. Efficient order taking, production and delivery: To execute an efficient op-

erational process that includes order taking, pizza preparation, cooking,

boxing and delivery.

5. Use of Domino’s PULSE point-of-sale system: Use of Domino’s PULSE

system to improve operating efficiencies, provide corporate management

with easy access to financial and marketing data and reduce time con-

sumption and expenses.



6. Product and process innovations: To promote an innovative culture that in-

creases both quality and efficiency.

7. A focused menu: To maintain a focused menu that is designed to present

an attractive quality offering to customers, while minimizing order errors,

and expediting the order taking and food preparation processes.

8. A comprehensive store operations evaluation program: To utilize a com-

prehensive store audit program to ensure that stores are meeting both as

the expectations of the customers.

The Performance Prioritizing would help Dominos in prioritizing its operational

strategies based on the order-winning criteria and the current issues it faces

in relation to the competition.

1. Dominos invests in promotional strategy to a greater extent as compared

to other food chain outlets. It offers many discount coupons to attract cus-

tomers. Discount offers do help to some extent in attracting customers but

too many discount and promotions tend to lower the brand image. So

Dominos need to cut down some expenses in that section which will not

affect its sales.

2. Dominos has got an excellent unmatched home delivery service through

which it stays ahead of its rivals. The ‟30-minute luxury‟ of Dominos has

given the brand a strong image among the customers. This gives Dominos

a clear balance between its competitors and customers.

3. Dominos need to improve its product quality in order to maintain reputed. It

needs to emphasize on the pizza quality and prioritizing all aspects that re-

late to the customer. For example, Pizza Hut specifies the calories con-

sumption in each pizza. This reflects the brand concern for the customer.

So Dominos should also initiate some measures which would foster the

“emotional connection” to its customers.



4. In order to increase the service to customers, Dominos should ensure

speedy delivery of pizzas to customers. For this, Dominos need to work on

its existing process design. There should be enough space and staff for

service and extra machines to handle any machinery failure during peak

periods.

6.0 TECHNOLOGY

Domino's Pizza launches Malaysia's first fast food on line ordering portal

which recognized by the Malaysian Book of Records in 2003. By introducing

the on line ordering portal, Domino’s Pizza has increase their potential

customer base as the portal can be reached anywhere, anytime.

In 2010, Domino’s Great Pizza Service (GPS) pizza tracker system was

introduced at all Domino’s Pizza outlets in Malaysia. This first-of-its-kind

system in Malaysia enables customers to track their pizzas at every stage of

the delivery process.

Exhibit 6.1 Domino’s Pizza GPS

Recently, other fast food chain such as Pizza Hut, Mc Donald’s and Kentucky

Fried Chicken has introduced their on line ordering portal to compete with

Domino’s Pizza.



In striving to attract more customers in an easier and more efficient manner,

Domino’s placed great importance on sales via its technology platform.

Domino’s has witnessed an ongoing trend of pizza orders coming in

electronically, rather than over the phone.

In contrast to telephone orders being placed to the stores, the online system

requires less labour, and causes fewer mistakes. In addition, Domino’s online

sales system has the ability to track customers’ preferences and past orders.

7.0 CONCLUSION

Domino’s Pizza is recognized as the world leader in pizza delivery. The

company’s fortune in the industry reflects their active arrival as the first chain

to offer delivery to the consumer. Since Domino’s focused its business solely

on delivery, they were also the driving force behind pizza delivery technology.

Domino’s Pizza has achieved success in creating the pizza box that has

become a standard for the pizza industry.

Domino’s dominated the market with the delivery concept until its main

competitor Pizza Hut began experimenting with delivery in 1999. Domino’s is

also commonly known for creating the “30-Minutes Delivery Guarantee” for its

pizza delivery. Domino's is the only pizza company that guarantees

customer’s order will arrive within 30 minutes or Domino’s will give its

customer a free Regular Pizza voucher. This slogan helped the company

attract customers. Domino’s has benefited greatly from implementing the first

truly effective home delivery system.



8.0 REFERENCES

1) http://www.wikipedia.org

2) http://www.dominos.com.my


individual assignment - dominos pizza

Documents

dominos pizza llc

overview dominos pizza

pizza delivery company

dominos operation

legend of dominos pizza

brothers tom

small pizza shop

operations strategy