Domino’s Pizza Business Environment Essay

Assignement Business Environment Feb 2013 TASK 1 a: Examine the various types of organisations and their purposes and compare the mission, goals, and the strategic objectives of your chosen organisation with a similar organisation. The various types of organisations are: – Sole traders – is a person who start a business by one individual. Advantage: – Retain all the profit – Maintain full control of the business – Information about sole trader is keep private – Direct contact with customers – The business can be based on the sole trader skills Disadvantages: – Unlimited liability. Difficult to have finance for business – Intense competitions from bigger firms – When the owner dies the business ends too – Partnerships – is then when two or more persons became associate and start a business together. Advantage: – More money for business – The partners can have different skills – Shared decision making – Business losses shared between the partners – Partners can replace each other if needed Student ID 11170 page 3 of 20 Assignement Business Environment Feb 2013 Disadvantages – The profit must be share – Unlimited liability – To take a decision must consult all partners. – The partnership must be reformed in the event of the death of one partner – Private Limited Companies – is an independent entity that provides limited liability and legal protection for its shareholders. Advantages: – Limited Liability – The business will continue even if one of the owners die – Separate entity – More capital can be raised Disadvantages – Profit must be share – There is a legal procedure to set up the business – Firms are not allowed to sell shares to the public. – Financial information filed with the Registrar can be inspected by any member of the public. – Public Limited Companies – is a company that work with stock exchange and its share can be buy or sell from anyone Advantages: – Limited Liability – New shareholders and investors can be easily assimilated – The company has a legal existence separate from management and its members Student ID 11170 page 4 of 20 Assignement Business Environment Feb 2013 – Because of their size a PLC can sometimes dominate the market Disadvantages – Setting up the costs can be very expensive – The firm is open to public inspection – Because of their size they cannot always deal with customers at a personal level. Decisions can be slow because the PLC has many directors – Cooperatives – is an organisation founded and controlled by a group of volunteer users for their benefits. Advantages: – Buying in bulk – Working together to solve problems – Good motivation of all members to work hard for profit Disadvantages – Possibility of conflicts between members – Poor management – Longer decision – making process – Franchises – is an organisation that operates under the brand of another organisation that is already in the market called franchisor. Advantages: – Operate in an already known brand – Support from franchisor ( training, financial). – Can work with franchisor’s existing partners Disadvantages Student ID 11170 page 5 of 20 Assignement Business Environment Feb 2013 – Must work from roles already established from franchisor, the franchise has no control of the business – Franchise must to pay franchisor because use their name. – Private Sector and Public Sector Organisations Student ID 11170 page 6 of 20 Assignement Business Environment Feb 2013 DOMINO’S PIZZA – FRANCHISE INTRODUCTION Domino’s pizza was founded in 1960 by Tom Monaghan (www. coversupermarket. com) and his brother. After one year Tom bought him brother’s half became the sole owner. In 1967 Domino’s opened the first franchise in 1978 to have over 200 franchise stores. In 1985 they opened their first store in UK currently reaching over 700 stores. By 2000 coming to have more stores in fallowing countries: Canada, Tokyo, India etc. In 1998, after 38 years of ownership Domino’s pizza sold 93 percent of the company to Bain Capital for $1 billion. In 2004 Domino’s began trading common stock on the Stock Exchange. In 2006 they opened 8000 total stores in international markets. The company is still growing today with more than 9350 stores in more than 60 international markets. In same year they starts its sponsorship of The Simpsons in UK. (the Domino’s effect. 13 supplement, Estates Gazette, July 19 2008 Issue) In 1999 Domino’s became the first home delivery company to float in the Alternative Investment Market. In 2000 they introduced hot bags to keep the pizzas hot and crisp during delivery. Domino’s started making pizza and today the current menu is a variety of Italian – American products but pizza stay main product, Domino’s along time bringing many improvements countertop and toppings. The Domino’s Pizza Team is hard working, committed to excellence and serious about having fun. There are more than 170,000 team members employed by 600 corporate-owned stores, a system of 5,000+ domestic franchise-owned stores and international franchise base that operates more than 5,000 stores in more than 70 markets around the globe ( www. dominosbiz. com ). Over 21,000 team members work in UK and Irish stores and in a range of support functions ranging from marketing, IT and training. Tom Monaghan bought the business for the amount of $500, now Domino’s has already labeled as â€Å"megabrand† because it already reaches a total of $5. 1 billion in terms of global retail sales. This includes $3. 2 billion in domestic sales and $1. 9 billion in international sales. ( www. statupbizhup. com ) Student ID 11170 page 7 of 20 Assignement Business Environment Feb 2013 MISSION, GOALS AND STRATEGIC OBJECTIVES MISSION Their mission is to be the best pizza delivery company on the world. Sale more pizza, have more fun. GOALS When the business started Tom Monaghan, the founder, had an only one goal to open three stores. This goal is achieved even exceeding the expectations Domino’s has turned its attentions to a new goal, namely to make the people to love their pizza. OBJECTIVES – Improve speed and efficiency of pizza making. Improve efficiency and speed in delivery. Lower the costs of pizzas. To improve customer relations. Make more profit. Student ID 11170 page 8 of 20 Assignement Business Environment Feb 2013 COMPARE DOMINO’S PIZZA WITH PIZZA HUT(FRANCHISE) PIZZA HUT MISSION They take pride in making perfect pizza and providing courteous and helpful service on time all the time. ( www. wiki. answers. com ) Every customer says â€Å"I’ll be back! † PIZZA HUT GOAL Their goal is to reach 85% recognition of the new product in their target market. The most important goal of the company is to increase revenue and profits. PIZZA HUT OBJECTIVES To serve the customer , to provide delicious and hygienic pizza and helpful delivery service. Practice what they preach: integrity, ethics and open communications. While Pizza Hut’s mission is to improve products and customer loyalty, Domino’s Pizza and motivate their employees saying that selling more pizza then the company will have more profit and employees will be better rewarded for their work as a result will have more money for their personal activities. Pizza Hut’s goal is to launch new products and marketing in a more advantageous and profitable growth while Domino’s Pizza wants to expand their business by opening as many stores and offering products and services as good that loyalty to his customers. Domino’s Pizza and Pizza Hut are competitors in pizza market and has same market demographic characteristics. Both companies have been able to offer to the customers a good and quality pizza and services. Both companies want to have the best possible promotion of products so that they can maximize their profit and want to cover a larger part of the market. Student ID 11170 page 9 of 20 Assignement Business Environment Feb 2013 TASK 1 b – Explain how stakeholders influence organisational mission and goals and discuss how and to what extend your chosen organisations (responsabilities) meets stakeholder expectations. All stakeholders have a real importance for a company. Each of them is an important part of business. Customers. The customers want that company to provide good products and service customer. For Domino’s customers are real important, they are dependent by customer’s satisfactions and they know that it is important to keep them. Each of satisfied customer bring with him profit. To became one of the most leading pizza delivery Domino’s has made and put the focus on clients feedback regarding improving the quality of products and services carrying many times their survey. Employees. The employees want that company to create a nice place to work and to give them a good training. As well the employees is very important in this company. Without good employees no organization can grow up. Domino’s know their employees work hard every day to provide great food and customer service why invest financial resources in training them. Suppliers. The suppliers want that company to have a good and along collaboration with them and pay them bill on time. Domino’s Pizza has a good relation with suppliers because they are an important factor in a business. Domino’s Pizza is very strict when choosing their suppliers because they are one of the largest volume purchasers off pizza – related product and they need the suppliers to ensure their highest quality product Management. The management want that company grow up and increase profit. Franchisor. The franchisor want that company provide a good work and to keep a good image of brand. Student ID 11170 page 10 of 20. Assignement Business Environment Feb 2013 TASK 2 a – Explain the nature of UK economic system and how it affects business organisations such as yours. UK have a free market economy, that means the market economy have a little government control and they can fixed the price without state intervention. At same time is a market where the sellers decide what to sell and the buyers decide what they want to buy and for how much. As for other organisations and Domino’s Pizza is an advantage that they can perform the work in a free market but can also be a disadvantage because in a free market all time are more competitors. Domino’s can set their prices and their activity without been affected from government influence only if the change taxes, instead there are situations where they need to stay flexible with the prices because of competition and they need to spend more money for advertising because in a free market the costumers have many options. TASK 2 b – Discuss how governments manage the national economy briefly and analyse the impact of fiscal and monetary policy on businesses such as your chosen organisation. UK government tries to manage the national economy in the fallowing ways: – keeping a low unemployment rate – keeping a low inflation rate that is as low prices – trying to produce as many goods and services that have a growth economy – by lowering taxes The fiscal policy represents all government imposed taxes and fees to maintain a balance of macroeconomics. Fiscal policy applies to market goods and services and by increasing or decreasing taxes can have a significant impact to organisations, can rise or lower inflation and unemployment. If the government reduces taxes would be an added advantage for Domino’s Pizza because automatic and demand would increase. If demand increases the organisation can Student ID 11170 page 11 of 20 Assignement Business Environment Feb 2013 have a higher profit and that help to open other stores. When the organisation expands help lower the unemployment rate because new jobs automatically appear. When the government increases taxation the demand decreases and the organisations are discouraged to invest and unemployment increases. When inflation is high has a negative effect on Domino’s Pizza because the organisation is forced to raise the prices and this automatically leads to lower demand and this affected the company’s profit. The monetary policy is intervention of monetary authorities on cash economy. The monetary policy have influence on interest rates, exchange rate, money supply. In terms of Domino’s Pizza organisation can be seriously affected by rising interest rates because the firm need to pay more money back to bank or stop the loans witch is a really help in company’s grow up. If the interest rates increase the population can’t take loans as well and this means if the costumers don’t have money the demand decrease and the production is affected as well. Lower interest rates have the opposite effect and the organisation can make more investment because the consumption increase as well. TASK 2 c – Analyse how competition policy and regulatory mechanism work in the UK in relation to your chosen organisation. Competition policy is an organisation that tries to control commercial activity in competition so that some companies do not get to have total power over the market. Competition policy bring the follow benefit for consumer: – consumers can benefits from products and services at the best prices – to adapt to competition policy, the firm develops researches and bring new innovation Office of Fair Trading (OFT) is the UK’s consumer and competition authority. Their mission is to make markets to provide a good work for consumers. OFT do the market research and provides consumers all the necessary information to make sure that they can make the right decisions regarding the products or services that consume. Regarding Domino’s Pizza there is no informations revealing that the organisation would have created problems so that OFT intervention to be necessary. Student ID 11170 page 12 of 20 Assignement Business Environment Feb 2013 Task 3 a – Using your chosen company as an example, explain how market structure determines the pricing and production decisions. Domino’s Pizza is part of monopolistic market. The monopolistic competition is a type of imperfect competition. The monopolistic competition have fallowing characteristics:  large number of competitors in market – between prices are small differences – large number of substitutes products – high advertising – is easy to entry or exit because exist just few barriers in this competition The monopolistic market is a market where exits many organisations which provides same products or services but with different characteristics. Same like Domino’s in pizza market exist many pizza delivery organisations but their products are different in taste, bases of ingredients, brand and advertising. In monopolistic competition for Domino’s is hard to decide their prices because they are influenced by competitors witch sell products substitutes. To be able to remain at a high level in this market segment, Domino’s has invested a lot of money in advertising to get customers trust and loyalty. In monopolistic market, Domino’s may not always have the same profit because the presence of competition and they always must to make researches to differentiate the products. Student ID 11170 page 13 of 20 Assignement. Business Environment Feb 2013 TASK 3 b – Using a range of examples, analyse how market forces influence the organisational response and examine how your organisation would respond. Unlike other companies which have faced difficulties during the recession, Domino’s pizza has managed to keep afloat even increase sales. Although the economy was visible affected Domino’s has invested more money in advertising continues to promote its deals and discounts and, reportedly from 2009, for Domino’s was an advantage that much of the population affected by the recession chose to eat home this led to a sales increase of about 11%. As well if cost increases and Domino’s Pizza offer must increase prices of its products or company profits would be affected. However manages to not have a drop in demand even increase its offering in exchange quality products and fast delivery order. Another influence comes from the competition because in this domain are many competitors, so Domino’s Pizza try various way to remain high: – through more intensive advertising – goods products and customer services – fast delivery All this make the demand increase. Student ID 11170 page 14 of 20 Assignement Business Environment Feb 2013 Another influence have suppliers because if the cost of the milk or wheat increases then the supply increasing as well and Domino’s Pizza need to increase the prices and then the demand decreases. TASK 3 c – Discuss the business and cultural environment of your selected organisation and assess to what extend it shapes the behaviour of the organisation. Food is the most culturally sensitive category of consumer goods. For Domino’s richness of diversity in the workplace stimulates the work environment, creativity and innovation, and they became stronger because they use all the human resources with different culture. While age consumers change their option for consumed products. Every buyer has their own vision of quality products that wants to consume and this is influenced by lifestyle and the income of each. Domino’s has many shops in many countries with customer who have different tastes they had to adopt their products according to the demand and desires of customers in each country. For example in Korea Domino’s sell Potato Pizza which topping include potato, in France domino’s sell Saumoneta Pizza with smoked salmon and dill and creme fraiche also they sell Four Cheese pizza. Student ID 11170 page 15 of 20 Assignement Business Environment Feb 2013 TASK 4 a – Discuss how international trade affects the UK business organisation and analyse the impact of global factors on UK business, including your chosen organisation. The international trade is the exchange of goods and services outside the territorial borders. International trade has many advantages but also requires some higher costs than domestic trade. International trade is very important for economic development in general and for individual countries economic development. Like other countries and UK practice international trade because it can not produce all the goods and services they need to be continuously developing. UK import is called when purchasing goods and services produced in another country and when UK sells goods and services to other countries is called export. For Domino’s Pizza international trade is opening new opportunities borders. When the organisation can expand by opening new stores the profit is growth but also the competition increase. When competition increases Domino’s Pizza must focus on placing the best possible products and services so that its clients do not turn their attention to competitors. This means that Domino’s need to invest more time and money in advertising and researches. Another great advantage of international trade is the company access to new products and suppliers which means that international expansion helps to increase production because in international trade a country need to utilize all resources. Globalisation is a business philosophy which believes that the world can became homogeneous. Globalisation has effect on the culture, economic development, environment and political system. Globalisation have fallow drivers: – market drivers – cost drivers – government drivers – competitive drivers Market drivers – degree of homogeneity of customer needs – existence global distribution network – transferable marketing Student ID 11170 page 16 of 20 Assignement Business Environment Feb 2013 Market globalisation drivers bringing homogeneity among customers. Domino’s Pizza can provide products to customers in UK from other countries and this influences cultures, taste and lifestyle and can increase demand. Cost drivers – potential for economies of scale – transportation cost – product development cost – economies of scope Globalisation have many advantages in cost drivers because Domino’s Pizza UK can supply from another countries with cheaper product with same quality and company can benefit from lower transport prices in globalisation if purchase necessary products in larger quantities. Government drivers – lower taxation– compatible technical standards and common marketing regulations – privatisation Government can help Domino’s Pizza by lowering import taxes and export taxes. Globally, Domino’s can work in countries with less advanced technology with more advanced technology from another countries. Student ID 11170 page 17 of 20 Assignement Business Environment Feb 2013 TASK 4 b – Assess the role and impact of EU policies and directives on the UK businesses using your organisations as an example. The European Union was founded by economic and political union of 27 states. The purpose of the European Union is to create a single market, the European market, and to introduce a single currency in the Member States to facilitate commerce and to lower the risk of being affected by exchange rate. By creating a single market in Europe, Domino’s Pizza, would have many advantages and few disadvantages. EU first wants to ensure protection of traders that operate within European borders and to introduce a common external tariff to facilitate the exchange of goods and services between Member States. By creating a single market with a common external tariff, for Domino’s means new business opportunities, a simple way to have access to new market, increase number of consumer Although, in UK, Domino’s working with national currency, if here would introduce the single European currency, Euro, the company would have a number of advantages; – company would not have losses caused by exchange rates that they would be removed – the transition to the single currency would eliminate and some bank fees – there would be no a fluctuation in the prices. EU helps to reduce the unemployment rate in Europe because in most Member States any citizen has the right to live and work in another member states except do some states still retain certain restrictions which include and UK. Student ID 11170 page 18 of 20 Assignement Business Environment Feb 2013 Conclusion My opinion about this course is that now I have more knowledge about what mean business environment. I developed my vision strengths to be considered within organisation and also negative and positive influences of all factors acting on business. I have more knowledge about national and international economic system and how economy can influence the organisations. And after this course I learned which is the best position in market for to have a good business. Student ID 11170 page 19 of 20 Assignement Business Environment Feb 2013 References www. coversupermarket. com. 2012.Dommino’s Pizza. [ONLINE] Available at: http://www. coversupermarket. com/blog/? p=211. [Accessed 15 April 13]. www. dominosbiz. com. 2011. OUR TEAM. [ONLINE] Available at: http://www. dominosbiz. com/Biz-Public-EN/Site+Content/Secondary/Careers/Team/?&lang=en_us&output=json&session-id=bdec0454534e2ab7f3ed9233e6b9f7ce . [Accessed 14 April 13]. www. startupbizhub. com. com. 2011. Dominos Franchise Cost. [ONLINE] Available at: http://www. startupbizhub. com/dominos-franchise-cost. htm? &lang=en_us&output=json&sessionid=653a45ce3c73fa78dfdd910e0a4bda77. [Accessed 15 April 13]. www. wiki. answers. com. 2011. What is the mission statement for Pizza Hut? Franchise Cost . [ONLINE] Available at: http://wiki. answers. com/Q/What_is_the_mission_statement_for_Pizza_Hut? &lang=en_us&output=json&session-id=29e880efe554d20d1c63f97638aab27e . [Accessed 15 April 13]. Student ID 11170 page 20 of 20.