Dominos Case Study - All topics - Ultimate
strategic role of marketing goods and services
A business aims to deliver reliable and enhanced value, outperforming competitors for profit. Establish strategies to enable a company to successfully distinguish itself from its competition. In 2016, Domino's increased its profit by more than 45%, with same-store sales growth of 14.8%. The Domino's marketing team is a key element in the ongoing support its franchisees receive. Other influences for the for these profits include strong pricing strategies, digital innovation such as interactive Pizza mogul platform and the release of new pizza toppings.
legal - the current legal framework
Another influence on the human resources of Domino's is legal concerns the corporate legal team's role is to assist in the management of legal risk in the business, preparing key contracts and understanding the impact of decisions made by government authorities.
leadership style
Domino's CEO Don Meij projects a public image that perfectly suits the organisation's mission statement of having fun while selling pizza. However, as the business model is tailored towards franchises, each franchisee would also have its own leadership style in each store in many respects.
products - goods and/or services - branding - packaging
Domino's is well recognised in the marketplace for its pizza products. However, it is important for the product line to continue to evolve and stay ahead of the market. Goods and services Domino's has moved beyond a set range of standard, low-cost pizza offerings. Goods The Chef's Best restaurant-quality range features a number of food product innovations, such as premium ingredients, quality packaging and unique post bake sauces. The range includes the speciality six slice rectangle-shaped base loaded with premium toppings including pulled beef, seasoned chicken, camembert cheese and fresh vegetables. The inspiration comes from street-food flavours across the world. and there were also new side dishes and desserts, such as Korean Spiced Sticky Wings, Mac n Cheese Croquettes, Caramel Fudge Pie, Cookie Brownie and Triple Choc. Domino's is working towards creating a menu that is free of artificial preservatives, colours and flavours. This has been a major initiative and something it is aware cannot be achieved overnight - it will take commitment from the entire team as well as Domino's suppliers and business partners. A number of products are already artificial preservative, colour and flavour free, including chicken sides and all desserts. Domino's also offers a gluten-free option, which allows sufferers of coeliac disease to enjoy pizza. Services The Domino's ordering system allows customers to design their own pizza from the range of toppings available. The Pizza Mogul platform takes this further: the customer-designed pizza can be added to the Domino's list, and the designer earns money on every order. In November 2016, following a survey of 6000 customers, Domino's launched a new gift idea, InstaGift, for the holiday season. These are digital gift cards that can be used for any purchase from the Domino's menu. Every stage of using an InstaGift is online, from purchase to redemption, so customers don't need to worry about losing a gift card they have Received. Branding Domino's is easily identifiable through its red, sky blue and white logo. The logo has evolved through the company's history, but has always retained the same key features: Source 10.7 A Chef's Best chicken and camembert pizza In September 2016, Domino's announced 'Taste the Colour', its biggest menu launch since 2009. The emphasis was on fresh, tasty ingredients to move away from the homogenised flavours of some of its competitors. New pizzas included Lamb Tzatziki, BBQ Lamb and Bacon and Creamy Chicken Carbonara, Source 10.8 The Domino's logo• the word 'Domino's' • a domino tile containing two spots on one side, and one on the other. These three spots represent the original three stores. Originally the logo also contained the word 'Pizza', but this was dropped when the company rebranded to emphasise that it offered 'more than just pizza'. The logo is used outside and within the stores, as well as on staff uniforms and delivery vehicles. A consumer seeing a Domino's pizza being delivered in their neighbourhood may be prompted to place an order themselves. Packaging The key packaging feature for takeaway pizza is the box. The industry standard pizza box is made of flat- packed corrugated cardboard, which can be quickly folded into shape in-store, and with vents that allow moisture to escape, preventing the pizza from becoming soggy. In fact, it is commonly believed that these boxes were originally developed by Domino's in the 1960s. Certainly, Domino's in the US began large- scale use of these boxes, which enabled stores to extend their delivery range. The pizza is cut into slices after being placed in the box. When pizza is being home delivered, rather than collected from the store, the delivery staff use heat- insulating bags to carry the pizzas from the store to the customer. Again, this is an industry-standard approach, to ensure the pizza is as fresh as possible when the customer opens the box. Hot cell bag technology has allowed delivery drivers to deliver the pizza almost as hot as it was when it came out of the oven. Domino's branding appears on both the box and the heat-insulating bag.
anti-discrimination and equal employment opportunity
Domino's proudly employs people of all ages, races, genders and abilities and has a zero tolerance policy for any discriminatory behaviour. Domino's hasin place a diversity program led by the Group HR manager, which is integrated into leadership training. This diversity program is aimed at recognising andpromoting differences within the business. The industrial relations team provides training to franchisees and store managers with regards to indirect and direct discrimination when it comes to rostering and employment. If Domino's is made aware of any issues of discrimination, the persons involved are required to complete mandatory training in the corresponding area.
establishing market objectives
Establishing market objectives As with most businesses, Domino's three general marketing objectives are to increase market share, expand into new geographic markets and expand the product range.
identifying target markets
Identifying target markets Domino's uses a mass market approach. Its pricing and diverse range of pizzas means the appeal of the business extends to all types of consumers across age, gender and income.
market research
Market research ensures that Domino's remains focused on offering customers an improved experience and stores with improved efficiencies. It prides itself on being first to market when it comes to digital technology and innovation. In the 2016 financial year, the Australian Development Digital team delivered a record number of more than 80 digital projects and updates across the Group. Having seen record online growth for each market, Domino's has pushed the boundaries of what can be achieved in this area.
sequencing and scheduling - Gantt charts, critical path analysis
Preparation of a pizza must follow a clear order of steps. The sequence begins with the pizza base before ingredients are added in the correct order to ensure quality and consistency. Then the pizza is ready for baking. Task analysis is used to determine the precise sequence in which individual ingredientsare added to minimise preparation time. Pizza basesare prepared in advance. Critical path analysis can enable Domino's to achieve the fastest pizza preparation times. The criticalpath is limited by the cooking time of a pizza. However,during this time it is possible to prepare other partsof a meal deal for the customer order or begin anew customer pizza order. This process increases thepotential number of orders per hour and reduces timebetween the customer order and delivery.
profitability management - cost controls - fixed and variable, cost centres, expense minimisation - revenue controls - marketing objectives
Profitability management Domino's is ethical in its procedures and pays for its acquisitions on a fair value basis. The organisation pays for the goodwill of newly acquired businesses based on an assessment by its directors. It has improved the productivity of its staff and equipment through leading-edge technology and staff training. Inventory is controlled on a FIFO basis to eliminate product waste (remembering that much of Domino's inputs are perishable). Expansion through existing pizza chains has been thoroughly researched and proved successful.
factors influencing customer choice psychological, sociocultural, economic, government
Psychological Domino's is perceived to be an entry level pizza store, although the advances it has made through technology are impressive. Consumers are aware when purchasing Domino's pizzas that they are buying a standard product that is fresh, tasty and always reliable. It is also very price competitive. Its home delivery service adds to the convenience. Domino's position in the market lacks the ability to compete with dine-in stores. Domino's is perceived to be a delivery-based store. Sociocultural Domino's customer base covers all types of consumers, regardless of age, gender and culture. In an attempt to cater to areas of Sydney with a large Islamic population, Domino's ran a trial of gaining halal certification for six stores. There was not a lot of consumer interest in this, so it was cut back to three stores - Auburn, Bankstown and Lakemba - but in 2015 these, too, dropped the halal certification. Economic Domino's is perceived to be a value-for-money Business and as a result it has appeal across a range of income groups. During an economic downturn, it is likely that many people will still purchase pizza and this suggests that Domino's may become much more appealing to consumers than high-end takeaway stores. has a register that names and shames offenders that have breached food standards and have resulted in public health issues. It is vital for Domino's licensees to comply with regulations, as a notice on one store can tarnish the consumer perception of the brand. Recent concerns about obesity have led to calls for governments to take actions such as taxing Unhealthy foods, banning junk food advertising and preventing fast-food outlets from operating in school areas. Although the Domino's range includes healthy alternatives, it would still be affected to some extent by any government activity in this area.Consumer laws The Australian Consumer Law requires businesses to honour implied terms of a transaction, in this case the delivery of a pizza. Domino's policy is that if a customer is not completely satisfied, Domino's will replace or refund the order. However, sometimes the system falls down. In October 2016, a New South Wales man was awarded $1200 by a court to compensate for an order he placed with Domino's in April 2015 that failed to deliver. The plaintiff stated that after a year of trying to get a resolution with respect to a refund, he decided to file a claim for breach of contract. Domino's did not appear in court, but advised a journalist that the man had been offered pizza vouchers at the time, but that was apparently not sufficient for him. Domino's paid the compensation, apologised to the customer and provided him with further pizzas and vouchers. The customer complaints process was also reviewed and changed. Ethical Products that may damage health Domino's operates against a backdrop of obesity concerns about the takeaway and fast-food industry. To counter this, the calorie intake for each product is clearly labelled and obvious to the consumer. The business also offers a range of baked chicken and seafood pizzas.
recruitment - internal or external, general or specific skills
Recruitment: where possible, the opportunity to move up to a position is given to an internal staff member who is interested in the role. If the role cannot be lled internally, it is advertised externally.
financial ratios - gearing - debt to equity ratio (total liabilities ÷ total equity)
This increase in debt is explained by the increase in financial lease payments and the European loans for the acquisition of Pizza Sprint in France, Joey's Pizza and Domino's Germany, and pizza stores in Japan.
global factors - global sourcing, economies of scale, scanning and learning, research and development
. Global sourcing = Transformed inputs for a pizza include dough, sauce and toppings. Nearly all toppings are sourced from Australian food manufacturers. Domino's strongly supports its business partners in Australia and, therefore, has better control over its supply chain.Only specialist pizza cheese is imported, from Leprino Foods in America. Economies of scale= For Domino's, significant cost savings and quality control in operations can be achieved by pre-making pizza sauce and dry dough ingredients at a central location. These are delivered to each store on a daily basis. Other bulk buying advantages can be achieved by purchasing toppings in large quantities from local food manufacturers. At a store level, it is difficult to achieve economies of scale. Scanning and learning= Domino's is constantly scanning and learning new ways to improve its business. It was the first pizza franchise to see the potential for digital technology. Domino's scans and monitors the activities of its competitors such as Pizza Hut, Crust and Pizza Capers as well as fast-food competitors McDonald's, Hungry Jack's and KFC. This is to ensure it is aware of any attempts by its competitors to gain a competitive advantage in operations. In 2016 Domino's began presenting a tech innovation event called Abacus Tech Series. This twice-yearly event is a platform to showcase the company's digital developments and first-to-market technology. Research and development= Domino's uses market research to analyze changes to operations that could improve the speed of its service and its product range; for example, Chef's Best was to provide a pizza of restaurant quality. The company has had great success with the order and home-delivery part of the business and is researching ways to improve service to pick- up orders. Domino's has the capability to track customers' locations via their mobile phones when they opt-in to On Time Cooking. With the new on-time cooking feature on the Domino's app, customers will be tracked until they get to the store, ensuring their pizza goes into the oven at the ideal time. They will arrive just in time for their pizza.
technological
According to a 2016 Australian pizza industry report by the IBISWorld group, 'Domino's growth has been due to a combination of technology, product development, acquisition and organic expansion'. Technology has played a key role in the success of Domino's operations. Domino's is consistently introducing new innovations and running new projects to increase efficiency in-store. These are undertaken primarily with team members and customers in mind. Through the development of mobile applications, easy-to manage websites and ordering systems that utilise smart devices such as smartwatches and smartphones, customers can order seamlessly through an efficient process. Any new developments in technology are presented to the Franchise Council of Australia, which then approves the implementation into stores.
Processes of Human Resource Management (ADMS) - Acquisition - Development - Maintenance - Seperation
Acquisition Job search facilities: Dominos.com.au → franchises and store managers can post open positions Team members refer friends and family Potential external employees required to submit an application form and complete a questionnaire If successful = shortlisted to next stage Tested whether they meet Domino's core values Must provide their license and visa details Development All staff undergo training in regard to: Food safety Hygiene Customer service Safety delivery practises and workplace Done through online training; modules using online learning management system Also has management programs and career progressions to fulfil their career journey at Domino's Maintenance Created an environment which recognises and rewards staff for their work effort; Team sports days In-store competitions Hosts annual Rally; rewards given When confronted with complaints and concerns in regards to staff, Domino's investigate and conduct necessary action; supporting employees through the process Seperation If an employee wants to resign they must provide notice within a time period, notice is dependent on team member contract type; Part-time/casual - range between a day and a coupe of weeks In the case of a dismissal as a result of a dispute or grievance, the staff member is dismissed due to breach of conduct; usually handled in store unless further mediation required.
training and development - current or future skills
Aligning with its goal of providing its employees with the opportunity to constantly learn and grow, Domino's offers a multitude of optional development programs. These are offered through a mix of hands-on and online training that acclimatise new employees to Domino's products and equipment and further allow team members excel in their chosen roles. For team members who wish to advance into a management role, a management training program entitled 'Pizza College' offers a series of short courses in areas such as store security, staff training, customer service and performance management. Additional training programs are offered to managers and corporate team members who wish to rise and progress their career with Domino's. The Multi-Unit Manager program allows managers showing strong potential to become successful multi-unit supervisors through enhancing their coaching, business management and problem-solving skills, among many others. Domino's places a high importance on building on the current skills of employees as well as the acquisition of new skills, which is evident through programs such as a rising talent program, leadership development program and driver development program. These programs focus on employees challenging their problem-solving, presentation and relationship-building abilities in order to help them progress in their careers.
planning and implementing - financial needs, budgets, record systems, financial risks,financial controls
Cash flows and budgets for the next five years are based on an estimated average sales growth of 4 per cent per annum nationally. This estimate is based on forecasts of future sales growth and the ability to achieve economies of scale. Financial Risk is assessed and controls put in place. This includes ensuring a minimum loss of stock, and therefore minimising financial loss, through a' first in, first out' (FIFO) inventory control system.The acquisition of equipment is generally linked to a realistic determination of the economic life of the asset as between 2 and 10 years. The credit policy for the sale of goods and provision of services on credit is 30 days. No interest is charged on the outstanding balance. Domino's does not hold any collateral over its trade receivable and is therefore unsecured. Domino's believes that the concentration of credit risk is limited due to the customer base being large and unrelated. In 2016, $907 000 was written off as being uncollectable, and in 2015 the amount for this was $821 000. Before accepting any new franchisees and business partners, Domino's assesses their creditworthiness and denes credit limits which are reviewed twice a year. Domino's may provide loans to franchisees, although it ensures there is enough collateral to cover the loan if the franchisee or business partner defaults. If the franchisee defaults, Domino's may purchase the store and operate it as a corporate store.
overcoming resistance to change - financial costs, purchasing new equipment, redundancy payments, retraining, reorganising plant layout, inertia
Change at Domino's has been concerned with the decision to introduce new e-commerce ordering systems and trial autonomous delivery vehicles. Online orders represent more than 60 per cent of customer interactions and the goal is to reach 80 per cent. Dialling a pizza is much less common. Eventually, all customer orders will be 100 per cent digital. These changes will have significant impacts on the human resources function as staff will need additional training and more delivery drivers may be needed. Finally, Domino's has created DLAB, an innovation centre in Queensland. The purpose of this centre is to bring together creative entrepreneurs and Domino's staff to generate ideas, explore emerging technologies and develop new innovations.
Effectiveness of Human Resource Management (Roland) Indicators Corporate culture Changes in staff turnover Absenteeism Accidents Levels of disputation Worker satisfaction Benchmarking key variables
Corporate culture: Domino's prides itself on possessing a staff that thrive in a family-like culture that places as much importance on being energetic, having fun and being passionate as being results-driven and innovative. The company believes in this methodology of training its staff in order to inspire them to continuously do better and ultimately provide the best possible service to customers. Benchmarking: There is none Changes in staff turnover: Domino's believes in hiring employees with values that correspond with those of the business and training those employees to achieve their maximum potential so that they may grow with the company Retaining highly trained employees and reducing staff turnover has been shown to boost staff morale and enrich the corporate culture that Domino's works hard to maintain. Absenteeism: Each franchisee or store manager is expected to manage absenteeism through conversations with the staff member However, the industrial relations team can also become involved to help mediate Accidents: Domino's closely measures the number of workplace accidents in its stores and ensures that mandatory WHS training has been completed when new employees commence work. It also performs quarterly audits to ensure that staff are adequately trained Levels of disputation: Depending on the nature of a dispute, Domino's has procedures in place to address the problem. If the dispute cannot be resolved directly by an appropriate manager, either the industrial relations or legal team may become involved, as well as a union representative if the worker is a union member. Worker satisfaction: Domino's does not have any formal process in place to measure worker satisfaction. However, the fact that it prefers to hire internally and openly encourages staff to help recruit friends and family members, suggests that employees generally enjoy working for the company. When a business prioritises fun as a large part of its mission statement, it is an indication that staff and the working environment to be engaging and that people who enjoy providing customer service are employed. Also, Domino's actively recruits young workers, who would typically engage with the fun workplace ethos and and such employment satisfying.
outputs - customer service - warranties
Customer service= Domino's aims to differentiate itself from its competitors by providing a level of service that exceeds the expectations of its customers; that is, delivery in time that is faster than customers anticipate. The 'Fast Where It Counts' philosophy means ensuring drivers are ready to go for deliveryfrom the store to the customer's door. Domino's aims to increase its share of the home delivery market and achieve year-on-year growth through its customer service strategy. Warranties= Domino's stands by its quality claims that ustomers are guaranteed to get a fresh, hot pizza, and if not satisfied the store will replace it. All food services and businesses providing meals are legallyobligated to ensure that products are safe for human consumption. Food safety is governed by the Food Standards Australia New Zealand Act 1991. Under this legislation Domino's must have correct controls in place throughout its supply chain to ensure food safety. Another aspect of Domino's guarantee is that participating stores offer a 15- or 20-minute delivery time for an extra charge. If Domino's cannot fulfil an order or fails to deliver on time, customers are provided with a voucher for a free pizza.
Globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability
DOMINOES Globalisation: Created opportunities to access other markets to sell the outputs. Pizza has universal popularity and the Dominoes system is applicable in overseas convenience food markets. The company holds franchise rights for NZ, Belgium, France, the Netherlands, Japan and Germany, with more than 2000 stores across 7 countries. Technology: Technological developments in digital communication and industrial cooking equipment have had the most significant effect on Dominoes. Both of these areas of technology has provided savings in terms of costs and time. In 2005 it introduced its first online website and online ordering.An iPhone app was launched in 2009 making the process of ordering Pizza even more efficient.This form of technology has Dominoes reaching its goal more effectively, as it helps in connecting Dominoes to social media platforms, including Facebook, Youtube, Twitter and so on. Quality Expectations: Operations must satisfy the expectations customers have for quality, speed of delivery and dependability. With customer expectations rising, Dominoes must deliver faster, with more variety of their pizzas, meal combinations and better quality products, as shown throughout advertisement and promotion.
the employment contract - common law (rights and obligations of employers and employees), minimum employment standards, minimum wage rates, awards, enterprise agreements, other employment contracts
Domino's adheres to standard contracts under Australian workplace law. A 2010 decision by Fair Work Australia approved an enterprise agreement between the SDA and Domino's called SDA - Domino's Pizza Agreement 2009. The Fair Work Act 2009 (Cth) is the basis of the agreement, which reflects that Domino's accepts the minimum standards of treatment of employees under the government's National Employment Standards guidelines. Domino's also has specific policies in place which all staff need to acknowledge in terms of intellectual property and privacy rights. All corporate head office staff are required to sign a confidentiality agreement. If they are leaving to work for a competitor this may affect their notice period.
internal sources of finance - retained profits external sources of finance
Domino's continues to fund its operations from its working capital. Store sales, royalties and suppliers fees from its franchisees provide significant funds for the business. As a 'going concern', Domino's also retains profits from past nancial periods to be reinvested for future growth. In 2016 this accounted for $134 798 000 of total equity. It has also sold some unwanted assets.
- debt - short-term borrowing (overdraft, commercial bills, factoring), long-term
Domino's deals with financial institutions in the country where it is expanding and has financial arrangements with banks such as Rabobank Australia, HSBC, Westpac Banking Corporation, Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi UFJ and Mizuho Financial Group. In terms of financial costs, the weighted average interest rate on funds borrowed was 1.47 per cent per annum for 2016 and 1.64 per cent for 2015. Domino's also provides loan finance to its franchisees. Average interest charged in 2016 for Domino's loans to its franchisees: France: 5.5 per cent Netherlands: 7.1 per cent Germany: 4.3 per cent Japan: 5 per cent.
technology - leading edge, established
Domino's has differentiated itself through using technology at all stages of the ordering, delivery, pick-up and purchasing process. The most significant technology for Domino's has been the implementation of e-commerce for customer orders.The company prides itself on being the market leader in adopting digital innovations. Cost and speed advantages can also be gained through developments in new faster and more energy-efficient cooking equipment, such as the WOW2 fast bake oven. While the company may eventually use autonomous vehicles to deliver its products, DRU and drone technologies can be considered leading-edge and were only being trialled in 2016.
developing marketing strategies
Domino's has embraced the global shift in power from corporations to the consumer by including social media as a key component of its marketing strategy. Domino's describes this trend as 'me-tailing'; that is, the fusion of social media and e-commerce. An example of this is the interactive Pizza Mogul platform, which lets people design their own pizzas, share them on social media, and earn money for every pizza sold. Pizza Mogul integrates with social media platforms as well as Domino's existing online channels, and each week top-selling Moguls are ranked publicly and a variety of bonuses are awarded. Pizza Mogul is recognised as a new way of marketing in which the user-generated content belongs to Domino's and thus can be shared freely to the wider market. Domino's CEO Don Meij says, 'This is, in my opinion, the future of retailing and I am so proud we have dreamt it and created it here at Domino's'.
Production, selling, marketing approaches
Domino's has made effective use of the marketing approach. This is evident in its outstanding financial results. Its products and pricing reflect the interests of its customer base. Pizzas are diverse and encompass many flavours. Standard pizzas start at $13.90 and have wide appeal to all types of consumers. Domino's has recognised that consumers are seeking healthier choices and now seafood pizzas starting at $16.90.
environmental sustainability and social responsibility
Domino's has recognised the importance of sustainability in all aspects of its operations. The company promotes recycling and aims to minimise waste, carbon emissions and energy use. Given its reliance on delivery vehicles in its supply chain and cars used by delivery drivers, the business is committed to using more fuel-efficient and low-emission trucks and delivery scooters. To reduce food waste from spoilage and having to dump unused ingredients past their use-by dates. Domino's uses PULSE software to manage inventory to avoid ordering excess food ingredients. Recycling of cartons and pizza boxes is encouraged in-store. However, the most difficult item to recycle is used pizza boxes as oil and fat residue can ruin an entire batch of paper and cardboard recycling. In response to social pressure for a healthier product, sodium and fat have been reduced in Domino's foods.
social - changing work patterns, living standards
Domino's in-store team members work off a exible part-time roster. Employees often have study commitments, other jobs, families, charitable commitments and more, so maintaining a work-life balance is very important to them. One of the reasons Domino's is an attractive employment opportunity is because of the flexible nature of the shifts. Due to the fact that most franchises operate during the day and into the evening, there is a variety of shifts available to employees.
Interdependence with other key business functions
Domino's is Australia's most popular pizza brand, and as a large organisation several of the key business functions rely on successful human resource initiatives. Domino's openly promotes its employee-based core values and always strives to full its company vision ('No. 1 in People, No. 1 in Pizza') and its mission ('Sell More Pizza, Have More Fun!'). Results from other key business functions such as nance and operations are based on the ability of the human resources sector to create an environment for employees that allows them to develop and remain in the business environment.
financial ratios - liquidity - current ratio (current assets ÷ current liabilities)
Domino's maintains additional undrawn facilities for the company to reduce its liquidity risk if needed. The current period of rapid growth has drawn funds available through the cash flow of its network and may appear here as possible future liquidity issues. However, the strategic plan is based on long-term growth and Domino's has made several provisions to deal with potential liquidity problems. The company believes it can meet its current liabilities from its operating cash cows and the proceeds of maturing financial assets. Cash equivalents are short-term, highly liquid investments that are readily converted to known amounts of cash with maturity periods of no more than three months.
Strategic role of human resources.
Domino's place a high priority on maximising each of its employees. The HR team is responsible for acquiring and maintaining top talent. A dedicated HR training team with Domino's head office staff and in-store staff to full train to educate all team members in all aspects of the company, including worksafe health and safety, food safety, food deliveries procedures and customer service. The team also develops short-term training courses to provide ongoing career development for staff. Training is a key part of the business in ensuring continued success
cash flow management - cash flow statements - distribution of payments, discounts for early payment, factoring
Domino's provides budgets for its functional departments and carefully monitors its expenses. The organisation encourages the development of its staff and achieved significant improvements in productivity of approximately 20 per cent last financial year. Domino's is undergoing an extensive global growth strategy and has funded this expansion mainly through increased debt. Sales revenue continues to grow as increased store numbers and marketing by the group has been very successful. Domino's has organised funds available to support its cash flow through cash reserves, short-term maturing assets and overdraft facilities to ensure that the firm maintains its liquidity. Domino's has a rigorous creditworthiness policy which is reviewed twice yearly. The group uses leasing for much of its equipment. Inventories use a FIFO system for inventory control. Domino's enters into derivative arrangements to manage its exposure to international interest rates and foreign exchange rate risk using forward contracts and interest rate swaps. A derivative may be recognised as an asset or if it results in a negative outcome it is recognised as a financial liability. Hedges of foreign exchange risk on business commitments - for example, in dealings with Japan - are accounted for as cash flow hedges. The gain or loss relating to ineffective hedging is recognised in profit or loss and is included in 'other gains and losses' in the income statement.
working capital management - control of current assets - cash, receivables, inventories - control of current liabilities - payables, loans, overdrafts - strategies - leasing, sale and lease back
Domino's provides budgets for its functional departments and carefully monitors its expenses. The organisation encourages the development of its staff and achieved significant improvements in productivity of approximately 20 per cent last financial year. Domino's is undergoing an extensive global growth strategy and has funded this expansion mainly through increased debt. Sales revenue continues to grow as increased store numbers and marketing by the group has been very successful. Domino's has organised funds available to support its cash ow through cash reserves, short-term maturing assets and overdraft facilities to ensure that the rm maintains its liquidity. Domino's has a rigorous creditworthiness policy which is reviewed twice yearly. The group uses leasing for much of its equipment. Inventories use a FIFO system for inventory control.
performance management - developmental or administrative
Domino's takes an administrative stance in terms of performance management. Franchises and corporate offices are recommended to conduct quarterly job performance reviews and are provided with templates for supervisors and store managers to conduct with their staff. The primary method of conducting performance reviews is done by carrying out interviews with managers and assessing their performance over the time period. Completing performance reviews helps to create a shared vision between team members by making sure their interests are aligned. Along with performance evaluation, employee development and incentives are also used to motivate and reinforce employees to excel.
e-marketing
Dominoes relies on e-marketing relies on e marketing to sell its product consumer are now able to order a pizza online and follow it progress before it reaches the door the website offers consumer detailed information on product information on product choice price and health consideration the website and the app have become stores that are portable and can be assessed anywhere a consumer has accessed the internet
rewards - monetary and non-monetary, individual or group, performance pay
Each franchisee or store manager is responsible for rewarding their own staff as they wish within their business. However, franchisees and managers are rewarded through incentive programs. Regional leaders have certain key performance indicators for stores. All employees are provided with the incentive to increase their pay and work their way up throughout the business by meeting targets. Each year, Domino's annual Rally gives out yearly awards for a variety of categories. From Domino's Delivery Driver of the Year to Manager of the Year, these awards recognise outstanding achievement of staff across the network. The Rally also includes a pizza- making competition that any staff member can enter, with nalists winning a fight and accommodation for the Domino's Rally held in Brisbane.
job design - general or specific tasks
Each position at Domino's is created so that employees have a range of responsibilities unique to their role while also learning and combining multiple skills that allow them to branch into other roles. This encourages a collaborative team environment where each member brings their own set of skills.
work health and safety and workers compensation
Each team member undergoes work, health and safety (WHS) training when they commence employment at Domino's. This training is completed in-store and online at regular intervals. If a WHS incident occurs, store staff are required to complete an incident report form. This form is reviewed by regional leaders are also all certified in senior first aid. In terms of workers compensation for workplace accidents, Domino's adheres to its stated requirements outlined in the SDA - Domino's Pizza Agreement 2009.
supply chain management - logistics, e-commerce, global sourcing
Effective supply chain management and logistics canbe a business's strengths. Domino's must ensurethat each store has sufficient dough, sauce and ingredient ready for each shift. Dough mix is sent to each store so that dough can be made in-store daily as required and the sauce is pre-made and deliveredto each store. Food ingredients are sourced from both local and international suppliers. Deli meatsfor toppings are sourced from Tibaldi in Melbourneand Primo Smallgoods in Sydney. Other ingredientsare sourced from Comgroup Supplies, a foodmanufacturer in Brisbane. Mozzarella cheese, cheese blends and pizza cheese are sourced from Leprino Foods, based in the USA. All packaging materials aresupplied by the Australian box manufacturer, Visy.
new product or service design and development
For Domino's, new products are principally new varieties of pizza, dough types and meal combinations. There are ongoing developments in adding a wider range of exotic pizza toppings, drinksand desserts. For example, stuffed-crust bases and rectangular bases have been developed. Changes in eating habits and healthy lifestyle choices have led to the inclusion of gluten free pizza bases and vegetarian pizzas in Domino's menu. In addition, there are various options that can be customised tobecome vegan. In terms of the service component of its products, Domino's has used digital innovation to improve theefficiency and effectiveness of its online ordering. SMS ordering, using emojis, Zero Click ordering and GPS Driver Tracking have been significant developments. Domino's is working towards cooking times of three minutes and delivery within 10 minutes
transforming resources (human resources, facilities)
Human resources With Australia and the six other overseas markets, Domino's has more than 60000 employees while sophiscated PULSE data management system is a key aspect for analysing all aspects of inventory and the operations process.
workplace disputes -resolution - negotiation, mediation, grievance procedures, involvement of courts and tribunals
If staff members have an issue or a dispute with any terms as set out in their agreement when commencing employment at Domino's, a certain procedure is utilised to ensure that all employee grievances are dealt with appropriately. In the first instance, employees must attempt to discuss the matter with a supervisor wherever possible in order to achieve a resolution of the dispute. If the matter is not resolved by consulting a supervisor, it may be referred to the next higher level of management for discussion. Should the dispute remain unresolved, an official from the SDA and a senior representative of the employer may become involved. While the matter is being resolved, all work continues as per normal conditions unless the grievance poses a threat against either party. The employee may be referred to the Fair Work Commission if the matter remains unresolved, with the possibility of being suspended from work on full pay.
global - costs, skills, supply
In Australia, Domino's operates as a local company but is affiliated through branding with the worldwide Domino's network. However, globally, Domino's is constantly changing its strategies, which has enabled it to become one of the largest pizza chain corporations in the world. In the last four years, Domino's has opened over 2000 new stores in 10 countries. By ourishing in emerging international markets, Domino's is seeing growth in many countries. Following its global strategy of diversifying its product range from pizzas to include pastas, sandwiches and side dishes such as desserts, Domino's has also been able to overtake other international franchise rivals.
influence of government - Australian Securities and Investments Commission, company taxation
Influence of government Domino's is subject to the rules set out in the ASIC Corporations Instrument 2016/191. As of March 2016, this includes rules for rounding off to the nearest thousand dollars. As Domino's is a parent company whose registered head office is in Australia, Domino's Pizza Enterprises Limited represents its 'consolidated group'. It is subject to the Australian company tax rate of 30 per cent.
inputs - transformed resources (materials, information, customers)
Inputs: Materials Domino's uses a wide range of ingredients as raw material inputs that are transformed. Each pizza base has identical inputs. The dough is made from scratch daily in-store using a prepacked dough mix while the sauce is also pre-made and delivered to each store to ensure freshness. There is a choice of 40 different pizza toppings, although a standard supreme pizza has seven toppings plus oregano and spring onion. Information- Domino's relies on current and accurate information to organise its operations in the most efficient manner. The most significant information is the receipe for the pizza. Other inputs include calorie content and preparation times for each menu item. Information from online orders is analysed to determine the demand for particular pizza's as well as peak times for overall demand. Customers Customers are an input because they are changed from a hungry state to one that is satisfied. Domino's encourages feedback from its customers because the business aims to meet their specific requirements. Customer surveys, responses to its complaints and compliments form on its website, online cooking blogs and social media comments can provide Domino's with information to analyse for improving its operations and to determine if there is a demand for new products. For example, the Chef'sBest range pizza was introduced as a consequence
inventory management - advantages and disadvantages of holding stock, LIFO (last‑in‑first-out), FIFO (first-in-first-out), JIT (just-in-time)
Inventory management is a critical success factor for operations. If the necessary ingredients are not available, customer orders cannot be fulfilled. This would be highly detrimental to Domino's brand as dissatisfied customers can easily switch to a competitor. Data for inventory on hand and in use is recorded so that each store has enough stock to meet the expected orders for an evening. Each store must ensure that it has enough pizza boxes ready and available - both normal size and Chef's Best. Carrying too much inventory can lead to spoilage and waste.Some inventory items are delivered daily, such as dough and sauce pre-mix, and therefore the inventory management may be classified as just-in-time. Buffer stock of frozen ingredients is kept on hand. At the conclusion of each shift, leftover stock is checked, weighed and stored.
types of markets - resource, industrial, intermediate, consumer, mass, niche
It is the consumer market that generates the profit for pizza-based businesses. Thus, Domino's marketing is targeted at the mass consumer market. Age, gender, income level, location and occupation are not key target areas for Domino's. This has been a considerable change for the business. When it first entered the market, its low-cost pricing strategy was aimed at customers seeking to take advantage of savings. However, this didn't give Domino's any point of difference with other fast-food and pizza outlets. Once the 'low-price' offering was not a priority, and the potential of technology to improve the quality and service of the product was realised, the Domino's business achieved incredible sales growth. Domino's has diversified into gourmet-style pizzas along with its traditional pizzas, thus broadening the scope of its market. It offers all types of consumers a choice of products and variety. For example, the Chef's Best range of restaurant-quality pizzas was introduced as a result of customer feedback. Domino's use of social media as a marketing plat- form is designed to engage with members of the tech- savvy Generations Y and Z. However, this by no means excludes other age groups, and Domino's ensures there are still traditional options available for less technologically adept members of its consumer base.
borrowing (mortgage, debentures, unsecured notes, leasing) - equity - ordinary shares (new issues, rights issues, placements, share purchase plans),
Leasing Financial leases relate to plant and equipment with lease terms between 3 and 10 years, and motor vehicles between three and ve years. Many of these leases include options to purchase the leased assets for a nominal amount at the completion of the lease arrangement. Leases for less than one year involved $3.7 million in payments, and those for one to ve years $7.1 million in payments, in 2016
implementation, monitoring and controlling - developing a financial forecast; comparing actual and planned results, revising the marketing strategy
Market segmentation: The major market segmentation is households, broken down by age group 55 and over (20.3%) 35 to 54 (40.9%) 15 to 34 (38.8%) Four key product segments Traditional pizzas (42.7%) Gourmet and specialty pizzas (22.6%) Pizza sides (18.3%) Other (16.4%) Traditional pizzas once represented 90% of the market, but in recent years the speciality segment has grown significantly.
Limitations of financial reports
Normalised earnings-Domino's has identified the one-off significant expense of $12.7 million for the acquisition of Joey's Pizza, Domino's Germany and Pizza Sprint as well as a one-off cost for redundancy incurred due to the relocation of Paris Commissary. Capitalising expenses-Operating lease payments are recognised as an expense. However, financial leases may be capitalised. Also borrowing costs related to the acquisition, production or construction of qualifying assets and that take a substantial period of time to be ready for use, are added to the cost of these assets through capitalising. Valuing assets-The directors of Domino's are required to make judgements, estimates and assumptions about the fair value of assets that are not obvious from other sources; for example, goodwill and indefinite life assets. The value of goodwill was very relevant when purchasing Joey's Pizza, Domino's Germany and Pizza Sprint. Historical costs are used to value assets in the annual report, except for some properties that have been adjusted at fair value at that point in time (that is, the current resale market value of the item). Debt repayments-Domino's ensures that it pays its debts on time and if necessary seeks to extend its loan arrangements.Domino's organised additional funding through the execution of multi currency facility agreements with multiple institutions. This included an extension to the existing secured variable rate loan with the expiry date in 2020. Notes to the financial statements-Domino's 2016 Annual Report included 73 pages of 'notes to the nancial statements'. Domino's provides information linked to the nancial statements to further explain the content in each of the reports. This information provides a greater understanding of the strategies that Domino's has utilised to grow its business worldwide. Ethical issues related to the business report - Domino's has developed a code of conduct which sets standards for each director, executive and employee for their duties. Domino's requires each individual to: • act honestly, in good faith and in the best interests of the Company as a whole; • act with high standards of personal integrity; • comply with laws and regulations that apply to the Company and its operations; • not knowingly participate in any illegal or unethical activity;
price including pricing methods - cost, market, competition-based
Price Pricing strategies Domino's allows all types of consumers to enter the market. It offers a range of pizzas at different prices allowing for entry into the market at different points, with the standard pizzas being priced lower than the gourmet pizzas. Its products and pricing reflect the interests of its customer base. Pizzas are diverse and encompass many flavours. Standard pizzas start at $13.90 and have wide appeal to all types of consumers. Domino's has recognised that consumers are seeking healthier choices and now offers chicken and seafood pizzas starting at $16.90. Price and quality interaction Domino's pricing is similar to that of its competitors. However, the business lacks the prestige of dine- in Italian/pizza restaurants and the ability to offer promotional pizzas at $4.95 may create the impression that the quality of inputs is lacking. On the other hand, the price differentiation between
ethical - truth, accuracy and good taste in advertising, products that may damage health, engaging in fair competition, sugging
Products that may damage health Domino's operates against a backdrop of obesity concerns about the takeaway and fast-food industry. To counter this, the calorie intake for each product is clearly labelled and obvious to the consumer. The business also offers a range of baked chicken and seafood pizzas. In November 2016, consumer association Choice published a table comparing the kilojoule count of 149 fast-food pizzas from five different chains, including 26 Domino's pizzas. When ordered from lowest to highest kilojoule count, four Domino's pizzas were in the top 20 (a section dominated by now- defunct Eagle Boys), and the entire bottom half of the list contained only two Domino's offerings.
objectives of financial management - profitability, growth, efficiency, liquidity, solvency - short-term and long-term
Profitability Domino's continues to drive expansion in order to generate increased long-term profitability for its shareholders Growth Rapid expansion, especially over the last few years, has seen Domino's expand to over 2000 stores worldwide. The acquisition of Pizza Sprint, a chain of 89 pizza stores in France, has reinforced Domino's position as the largest pizza chain in France. Domino's also acquired Joey's Pizza's 212 stores and is the largest pizza chain in Germany. At the end of July 2016, there were 453 stores in Japan. Efficiency Domino's continued to work towards improved efficiency in operations such as its online ordering systems and guaranteed quick delivery of its product to its customers. Directors' performance is directly linked to the fulfillment of their financial performance objectives and to their individual share options entitlements. Domino's allows a credit period of 30 days for its accounts receivable and has a turnover rate of approximately 13 times per year. Solvency In 2016 there has been increased debt in the short term due to Domino's strategy for rapid growth. Domino's has achieved record increases in sales worldwide as its marketing has correctly and successfully targeted the Domino's market.
quality management - control - assurance - improvement
Quality assurance is achieved through following specific checklists for cleaning the whole store, the preparation area and preparing ingredients. If this is followed correctly, each store will be ready for any order in minimal time and each customer's order will be prepared without mistakes, problems or omissions. To ensure quality in terms of texture, the dough is tested by selecting a random sample for a stretch test, in which a small piece of dough is stretched to create a 'window frame'. When the dough is at the right consistency, it is possible to stretch it until it is very thin (it can almost be seen through) before it tears. When transformed into bases, a stretch machine and visual inspection are used to ensure that each base is a precise circle and the correct diameter. Each pizza will be topped correctly and each variety of pizza is made consistently. That is, ingredients are evenly distributed on the base and each pizza has the same amount of toppings. Topping applicators are used so that neither too much nor too little is added. Data for delivery times is kept and analysed each evening and each week to calculate average delivery times, and these are compared over time. Finally, Domino's reviews and responds to customer enquiries in order to improve the products,delivery and overall quality of service.
performance objectives - quality, speed, dependability, flexibility, customisation, cost
Quality- Quality is assessed through factors such as friendly and helpful interactions with staff ,tasty food ,clean stores and how easy it is to navigate through the website without any malfunctions .Also quality is measured by consistency of outputs each pizza must have the correct quantity and arrangement of toppings Speed-Through transformation process that is improved through faster cooking time,introduction of new fast bake conveyor ovens cooking times have been reduced from 7.15 mins to approx 4 mins Dependability-reliability of the product of services .Dependability is measured by the percentage of on-time deliveries.Factors that can affect dependability can be how busy the store is ,how complex the order is ,how poor weather ,high traffic to get delivery destination ,Domino dependability objective is achieved by using GPS driver tracker this allows customers to track their order also giving an estimated time of delivery Flexibility-Domino's to have excess capacity that is,spare ovens and staff waiting in case there is a sudden increase in demand Customization-Domino's has high degree of customization.Customers can design their own pizza from a choice of different bases and toppings ,over 100,000 varieties of pizza are available.Also customers can choose from a range of items for a meal deal ,adding or subtracting items to suit their order Cost-Domino's cost for each store is labour owing to the labour-intensive nature of the makeline .Each pizza must be costed according to the costs of a ingredients ,labour.Data is used to predict the minimum number of employees required for each shirt to minimise labour cost
strategic role of operations management - cost leadership, good/service differentiation
Role of operations management is to support the achievement of the strategic goals of profitability and growth. Domino's improves its pickup and delivery services ,the home delivery business is dominos core operation ,competitive nature of the market means that domino's primarily purses cost leadership. Differentiation in domino's offers more varieties of pizza than any of its competitors,over 100,000 customerization varieties are available.
stakeholders - employers, employees, employer associations, unions, government organisations, society
Stakeholders- Domino's has determined that its key stakeholders are its customers. Dominos success depends on effectiveness of relationships with its stakeholders. Employers- Australia, Domino's Pizza Enterprises Limited is a publicly listed company that operates as a franchisor and operator of Domino's fast-food restaurants. Approximately 10 percent of stores controlled directly by the company and the remainder operated by franchisees. Employees- Domino's relies heavily on its employees to operate with their maximum potential to create the atmosphere to deliver this of customer service to Pizza' to provide its customers with the best possible service. The business highly values the skills of its employees to allow them to reach their full potential in a safe, inspiring and diverse work environment. The guidelines its employees are to follow core values.-i.e Treat people as you'd like to be treated. Produce the best for less. Incentivise what you want to change. Employer associations- The most relevant employer associations are those that offer specialised assistance to franchisees. Franchisees. Franchisee associations offer support and advice for entrepreneurs who decide to pursue franchising opportunities. Unions- Unions ensure there is transparency in dealing between employers and employees, and the human resource department often represents an employer in any dealings with a union. When a new employee is hired they may choose to have a certain amount of their pay automatically deducted to service union fees. Employees are represented by the Shop, Distributive and Allied Employees' Association (SDA), which is the union that covers retail and fast-food companies in Australia. Unions are very effective in representing employee interests and ensuring all issues between employers and employees are resolved effectively such that the interests of both parties are aligned. Ultimately, unions help human resource departments to promote a positive industrial environment. Government organisations- Government is responsible for establishing the legal framework within which employers, employees and trade unions operate concurrently. Concurrently. Employers, employees and trade unions are all expected to abide by the regulations that the government and relevant tribunals set up. Society Domino's strongly believes in giving back to Australian and New Zealand communities. Providing financial assistance to communities in difficult times is at the core of these beliefs. Pizza donations in times of natural disasters, and monetary donations through its 'Give for Good' program.
situational analysis - SWOT, product life cycle
Strengths • Reputation • Innovative • Ability to respond to changing consumer needs Opportunities • Online delivery tracking • International expansion across Europe • New non-pizza menu items Weaknesses • Perceived by consumers to be low-cost pizza Threats • Obesity issues • New low-cost competitors
consumer laws - deceptive and misleading advertising - price discrimination - implied conditions - warranties
The Australian Consumer Law to honour implied terms of transaction; Domino's = Pizza Domino's policy - if a customer is not satisfied, Domino's will replace or refund the order. In October 2016, a man was awarded $1200 by a court to compensate for an order he placed in April 2015, which was not delivered. Although this was not suffice for the man and requested for further compensation; providing him with more vouches and pizzas.
ethics and corporate social responsibility
The Domino's Board has a Code of Conduct that all employees must follow. As outlined in the 2016 Annual Report, this requires all directors, executives and employees to: • act honestly, in good faith and in the best interests of the Company as a whole; • act with high standards of personal integrity; • comply with the laws and regulations that apply to the Company and its operations; • not knowingly participate in any illegal or unethical activity; • not take advantage of their position or the opportunities arising therefrom for personal gain.
strategic role of financial management
The company has achieved a prot of $125 819 000 for 2016. Strong sales and the opening of new stores has driven growth by 26.6 per cent since 2015. Existing store sales in Australia and New Zealand grew by 14.8 per cent and in Europe by 8.2 per cent; however, the newly acquired Japanese division suffered a decrease of 2.1 per cent. Growth included 182 new stores opened in existing geographic regions and 302 stores through the acquisition of these businesses. By the end of the 2016 financial year, the Domino's network included 714 stores in Australia-New Zealand, 816 in Europe and 453 in Japan.
financial ratios -Comparative ratio analysis
The data for revenue and the tax liability on net prot is compared to past nancial periods, as well as to budgets and the achievement of nancial performance objectives. All trends are compared to ensure Domino's strategic outcomes such as identifying savings, customer satisfaction, hygiene, training and staff development are being achieved.
human resource functions - using contractors - domestic, global
The size and scope of the Domino's approach lends itself to having a strong business model with clear corporate policies and training systems in place. Domino's therefore maintains an in-house human resources team, as part of its head ofce hierarchy, rather than outsourcing this function. This is one way that the head office of Domino's is able to support its franchisees. Using contractors- Domino's often utilises contractors for a range of its operations to full short-term job requirements or contracts when required. This is designed to ensure the company is always able to grow and expand. However, with its internal head office teams in place, Domino's does not require external in terms of human resources.
outsourcing - advantages and disadvantages
To ensure that it has control of every aspect of its operations and to maintain corporate secrets, Domino's does not outsource any of its operations
transformation processes the influence of volume, variety, variation in demand and visibility (customer contact)
Volume-Important to the amount made and sole Variety-100,000 possible ingredients combinations more things made more wants therefore memory Variation in demand- Ability to satisfy large orders on days of periods in which more of the product and service is needed, Visibility-Interaction the customer has in the transformation process .the ability for the custom to view the progress for the item purchase
global financial management - exchange rates - interest rates - methods of international payment - payment in advance, letter of credit, clean payment, bill of exchange - hedging - derivatives
global financial management - exchange rates - interest rates - methods of international payment - payment in advance, letter of credit, clean payment, bill of exchange - hedging - derivatives
