Now we will proceed to analyze how Domino's Pizza has become one of the references in internationalized companies worldwide. Headquartered in the United States, Domino's pizza has experienced a huge growth since it was founded in 1960 by Tom and James Monaghan. Like we said above, nowadays it is the largest pizza delivery corporation in the world after Pizza Hut withno less than 10000 corporate and franchised stores in 70 countries.
By 1990s, Domino's Pizza had already signed its 1000th franchise and by the end of the century it had already opened its 2000th store. After that, the company experienced its fastest-growing period, which keeps on going today.
International expansion, “One Brand – One System”
Domino's currently has over 5000 stores out ofthe US, in 70 different countries and in all five continents. This is a result of around 50 years of expansion, which is based on the franchising model.
Domino's follows a “One brand – One system” policy, the reason of its success. There is a collaborative relationship between its franchisees and the corporate team that supports them. This dedication to a single system and a single brand assuresthat the core strategy is followed by every Domino's Pizza store. This strategy sums up in three points:
1. The brand is built through the consistent use of its registered marks and by executing against the same consumers promise.
2. The company focuses on the store's layouts, training programs, evaluations and their workers.
3. They maintain the same high standards wherever the storeis located.
This policy established by Domino's pizza does not mean that all the stores are exactly the same. The corporation recognizes the need for adaptation in order to address the cultural, politic and social differences in each market, and they may adjust products or systems for local tastes and preferences.
As said above, Domino's follows the franchising model. Franchising isa specialized form of licensing in which the franchisor not only sells the right to use the trademark of the company but he also establishes rules on how to run the business. Usually, the franchisor also assists the franchisee to run the business, while the franchisee has to pay royalties that amount to a percentage of its revenues.
Franchising is a way of entering the international marketsnormally employed by service firms. These firms will not only oversee on how the franchisees operate the business but also will have control over the menu, cooking methods, staffing policies, design and locations. Domino's also provides a comprehensive training program covering store operations, marketing, finance and human resources.
Franchising has both advantages and disadvantages, like every wayof entering a new market.
* First of all, it requires little investment from the franchisor (Domino's Pizza), since it is the franchisee who is to assume most of the costs. The cost of expansion of the franchisee is limited to the cost of franchisee recruitment, training and assistance prior to opening. This also means that the investment return will be high.
* Therefore, therisks are also assumed mostly by the franchisee.
* Third of all, the franchisee will be wanting the business to run swiftly and profitably, since it is his investment what it's at stake, ergo the business will be run by motivated people.
* Another advantage is that the franchisor can expand internationally quickly without incurring in the costs normally associated to the opening of newstores. This will help build consumer recognition early and establish the franchise.
* Also, there is no need of spreading managerial resources across too many business units.
* Finally, one of franchising's most important perks is that entering new and different markets will not be as hard. Since the franchisee knows the market where the store is going to be located, so he will deal with...