Dominos

1. Business Overview

Dominos is a franchise that serves pizza delivery, carryout services as well as dine-in

through their restaurants. Dominos offers a wide variety of products ranging from wings

and salads, to sandwiches and desserts. Dominos built their way up from one store to

the biggest and most popular pizza franchise in the world. Dominos specializes in

customer relationships, and quality pizza.

Dominos has 4 segments where they make their revenue. The first is Domestic

company-owned stores, the next is Domestic franchise, third is Supply chain, and last is

international franchise. The most revenue generated comes from the supply chain. Then

its domestic franchise, then Domestic company-owned stores, and then International

franchise.

Domino’s top competitors include Pizza Hut, Papa Johns, Little Caesars, Zume Pizza,

and more. Dominos has a well established franchise, with a loyal customer base.

Dominos also makes a lot of their revenue through big events and parties. Many people

like to order pizza and wings to big parties, and they also order a large quantity of the

food as well. A big event that brings in a lot of revenue for dominos is the super bowl. An

estimated 12.5 million people order pizza on super bowl day. Dominos makes a

significant amount of money on that day, and they also acquire a lot of customers as

well. Additionally, Dominos needs to find a way to get as many people to order from their

franchise instead of others on super bowl day. They can have better deals, better quality,

more options, and more quantity as well to attract customers.

2. Size

As I said before, Dominos is the biggest and most popular pizza franchise in the world.

In 2021, Dominos had over 18,800 restaurants worldwide. There are also over 14,400

employees that work for Dominos.

Dominos provides many deals and offers that attract customers. They also have a rule

that if the pizza is late, it will be free. This encourages customers to see if they can get a

free pizza, as well to assure the customer the pizza will arrive on time.

As I mentioned before, Dominos serves food outside of just pizza. Some of the most

popular items outside of pizza include the chicken alfredo pasta. This dish is pasta with a

cheesy and creamy sauce. The second most popular dish is the marbled cookie

brownie. Many comment this brownie to be rich in flavor, and a gooey and flavorful

inside. And lastly, the third dish is boneless chicken. Boneless chicken can come in

different flavors, and can be eaten with different sauces. As we have gone over the top

dishes, we can see why some people would prefer dominos over other pizza places.

With dominos being the number 1 pizza store in the world, dominos has a lot of other

foods that are great and tasty.

With the most popular dishes being listed, here are some of the most popular pizza

toppings at dominos. At number one, pepperoni takes the spot. Pepperoni is a classic

and iconic topping that many pizza stores serve. At number 2, we have mushrooms.

Many love their pizza with that mushroom flavor, and the texture as well. And the third

item is onions.

3. Growth

Revenue

Year 2017 2018 2019 2020 2021

$ in millions 2,789 3,432 3,619 4,118 4,357

Dominos revenues have been on the increase for the last 5 years. They have been

increasing at a steady rate, and have been consistent. Covid didn't seem to take an

effect on dominos because delivery was still available for their service.

Profits

Year 2017 2018 2019 2020 2021

$ in millions 277 362 400 492 511

The profits are quite low compared to the revenues. Dominos needs to find a way to

increase the profits as well as the revenues. Whether this means to increase the price of

the goods, or decrease the price of operation, they need to find a way to maximize the

profits.

Low probability Med Probability High Probability

Large Payoff Pizza hut shuts

down because of

scandal, and many

customers go to

dominos

Dominos finds a

way to reduce

transportation time

and is able to

deliver pizza and

other goods at a

significantly faster

time

Dominos keeps

expanding and

putting new

locations around

the world and

profitable locations

Medium payoff Domino’s is able to

get sponsored by

many companies

and corporations

and attracts

customers

Collaborate with

celebrities to attract

attention to the

franchise

Dominos can add

drive thrus where

you can go through

stores and get

pizza within

minutes

Small payoff Dominos increases

prices of pizza and

customers still buy

the same quantity

as before resulting

in profit

Dominos changes

menu and prices to

adjust to consumer

demand

Dominos continues

to advertise and

show attractive ads

If dominos finds a way to reduce transportation time, it may come with a cost. The cost

may overcome the benefit, and could be a negative to the company. However,

customers could be satisfied with the time, and order more, as well as new customers

could be attracted to this new idea. This will generate more revenues resulting in more

profit.

If Dominos changes the menu and adjusts the price, many customers may not like the

new product and the price values. This can cause a loss in customers which would lose

them revenue. However, customers may prefer the new product over the old, and could

visit more frequently, and could also attract new customers. This would increase revenue

as more customers are buying more products, and new customers would also buy

products as well.

If dominos have deals that encourage customers to buy pizza and other products at a

lower price, customers could abuse this system and Dominos can end up losing money.

However, customers may end up spending more money, and it could end up profiting for

Dominos.

4. Margins

Operating margins

Year 2017 2018 2019 2020 2021

% 18.70 16.65 17.39 17.62 17.91

Domino’s operating margins have been up and down in the last 5 years. They have slowly

increased since 2019, but were the highest in 2017.

5. Cash flow

Year 2017 2018 2019 2020 2021

$ in millions 341.261 394.171 496.95 592.794 654.206

The cash flow for Dominos has been increasing for the last 5 years which is a good sign in a

business. They are bringing in more money each year and are increasing at a significant rate.

6. Business Risks

Small Probability Med Probability Large Probability

Large loss Dominos cows all

die from disease

and their cheese

can't be replicated

Pizza hut starts

taking customers

from dominos

because of

increased quality of

food and cheaper

prices

Competition from

other chains could

decrease sales,

and revenues.

Medium Loss People in general

stop eating pizza

because they get

bored of the taste.

Covid variants

could come and

start decreasing

sales, or something

like monkeypox

could prevent

people from coming

out and buying food

and even delivering

because of contact.

Domino’s can

change their menu,

but consumers

don’t like the new

items, and they can

lose money and

revenue off the

loss.

Small loss Dominos gets sued

by a man who wins

millions of dollars.

Articles that spread

rumors or fake

news could

temporarily

decrease sales and

decrease revenues

Labor gets more

expensive, so

Dominos has to pay

higher wages to

employees.

7. Stock performance

Domino’s stock has been a very high performing stock over their lifetime. Additionally, Dominos

stock has been increasing at a steady rate, and did not take a huge hit due to Covid because of

the delivery option within their business. Dominos has recently taken a small dip because of the

war between Russia and Ukraine. However, this is a temporary effect, and the stock is already

starting to come back up. I believe that dominos will continue to thrive, and increase revenues

each year.