Domino's Pizza Hut Case Study

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CRITIQUE OF THE PORTER’S DIAMOND MODEL IN HOME (US) AND HOST (UK) Making pizzas is not an easy job, as lot of hard work goes into manufacturing and selling them. Both Domino’s Pizza and Pizza Hut would require land, water and gas to set up their shop and make pizzas, along with flour and cheese in terms of raw materials. Capital should arrive in the way of a delivery vehicle, pizza boxes, ovens etc. And the most important, they require skilled labor; talented chefs, waiters, drivers for product delivery, suppliers etc. Therefore, this is how factor conditions are fulfilled by both these companies in US and UK. In 2014, both Domino’s Pizza and Pizza Hut launched technologically innovative ways of ordering pizza. Domino’s Pizza launched its…show more content…
To buy a Domino’s Pizza franchise in the UK, the overall cost of doing so is £280,000, and a person needs to invest £120,000 of his/her own money and arrange the rest of the money through funds from the bank, which covers all starting and equipment costs (whichfranchise.com, 2015). A 3-week training programme takes place, after which a franchise agreement contract is signed with Domino’s. Constant support is provided by the head office team to the franchisee, and monthly royalty fee is to be paid to Domino’s depending on the franchisee’s sales percentage. In return, rewards from Domino’s are such that one of every three franchisees end up being millionaires (whichfranchise.com, 2015). Meanwhile, Pizza Hut mainly focus on a person’s spirit and passion to work in the company’s franchise. Precisely, an experienced candidate in terms of management and experience in business, and the desire to provide terrific customer service. Lastly, a start-up amount of £80,000 of their own money, with additional funds from the bank is required (Pizza Hut Delivery UK Franchise Site, 2015). Domino’s Pizza and Pizza Hut’s structure and strategy of managing business outside the US, in other countries is by letting the normal people run the business after completing certain formalities, i.e., through franchising. Intense rivalry between the two, as mentioned before, is in terms of…show more content…
The way a company can become profitable and a global success is through a careful mixture of all the right models, which fit their competencies and requirements. It may be a costly approach, but one that comes with an assurance of long-term success. Location is an extremely important factor for a firm to be successful worldwide. If a firm opens its outlet in an unfavorable location, it will fail and eventually shut down due to a lack of positive response, as customers may find it hard to travel to that location. Domino’s Pizza and Pizza Hut seem to be validating all the factors of The Diamond Model in its home and host locations, but even though it may not be sufficient enough to justify the decision of the location for internationalization, it definitely is a great starting point as generally, it helps firms in development and making use of the competitive advantages available to them, and it also provides them the initial foundation for selection of home and host

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