Name :Anam Shoaib Reg # L1F11MBAE2058 Section (H) Assignment # 1 Serial # Date of Submission: November 7, 2013
Summary Rethinking Domino's Expansion Plan
This case study is about pavan bhatias expansion plan for dominos in india (1999). He planned to make dominos largest food chain in india but faced many problems. The board members felt that pavan bhatias was not performed well during his 18-months tenure was not upto the mark and he had initiated an expansion strategy that was reckless and not properly thought out. However many other felt that board is not considering the possible long term benefit of pavan bhatias strategy pavan bhatia opened domino's outlets in small towns and cities. Where pizza consumption was very low. Because prices are unacceptable due to low footfalls and lower volumes, hari bhartia planned to shut down domino's outlets not only in some small cities but also a delivery outlet in the wealthy gujranwala town in north delhi. One of the two outlets in ludihiana was also planned to be shut down. This case gives an overview of domino's over-ambitious expansion plan. It discusses in detail, how domino's, under pavan bhatia, expanded quickly to make domino's the biggest fast food chain in india. The case focuses on what was the negative impacts of this expansion plan. It reflects light on various factors like the new strategy of hari bhartia, after the exit of pavan bhatia the failure of governance in domino's and how hari bhartia, allowed the ceo to pursue the expansion plan despite warnings from within and analysing these factors that there are huge gap between projection and actual sales stress on company owned outlets for expansion huge infrastructure cost transportation cost location of outlets operation cost pricing nationwide advertising campaign
Swot analysis
Strenght They have huge investment They have good brand name Weakness Management is not strong Lack of critical thinking Less profits
Opportunity They have accessibility in many areas Efficiency and Effectiveness
Threat They are facing losses Huge competition
Problem statement
They have these problems 1. expansion strategy to ambitious, 2. huge gap between projection and actual sales, 3. stress on company owned outlets for expansion, 4. huge infrastructure cost 5. transportation cost 6. location of outlets 7. operation cost 8. pricing nationwide advertising campaign
Developing alternatives
Movement from company owned outlets to franchisee owned outlets extensive research before launch in new areas spread out the expansion plan over a few years advertising in areas where services are present sound top level management
Evalution of alternatives
1. Movement from company owned outlets to franchisee owned outlets.
Advantages
More capital More managers Help in decision making Able to know customer needs and react accordingly increase profits Helps them to know the need and react accordingly Increase profitibility
Disadvantages
Loss of ownership
2.
Extensive research before launch in new areas
Huge time and finance is required
3.
Spread out the expansion plan over a few years 4. Advertising in areas where services are present 5. Sound top level management
Increase cost
Help in decision making
Selection of best alternatives
According to me best alternatives are spread out the expansion plan over a few years and sound top level management
Implementation
They should divide their plan into segments and then start targeting these segments according to customer needs the top level management should make strategies that helps in increasing profits
Conclusion
This case study provides a lesson that while developing a strategy management should research more and must know the pros and cons of what they are doing they must know how to deal with different situations
Recommedations
The management should spread the plan to several years They should know the demand and affordability of their customers They should not launch their outlets in the areas in which demad is less and cost is more They should shrink their plan and invest only in the areas where demand is more and cost is less
References
www.slideshare.net/kinnar32/dominos-case-1 http://www.thecasecentre.org/educators/products/view?id=21422
Rethinking Dominos Expansion plan: Summary:
Dominos enter in India in 1 6. Dominos pizza India Ltd. was the Indian franchisee of dominos pizza Inc. pavan Bhatias expansion plan for domino in India was in1999.Pavan Bhatia took over as the CEO of Domino's He plan to make dominos largest food chain in India. He used strategy to open outletsat corporate offices and in small towns and in cities. Pizza consumption in these places was very low. But the cost per meal was too high. Analysts felt that even those willing toopt for the product found the price unacceptable. Due to low number of consumer visiting an outlet Hari Bhatia planned to shut down dominos outlet in small town and also in wealthy towns. This case shows the poor governance and wrong decisions of management and how these decisions effect and create problems like large gap projection and actual sales stress on company owned outlets for expansion more transportation cost , outlets are at the place where demand is less and more operating cost nationwide advertising campaign is very expensive.
