Thursday, December 5, 2019
Foundation of Business Organizational Context
Question: Describe about the Foundation of Business of Organizational Context. Answer: Introduction In an organizational context, SWOT analysis is used for identifying the internal strength and weakness as well as external opportunity and threats.Dominos Pizza Enterprise is the largest Pizza chain in Australia. The company has been selected as the largest franchisee in the world (Kumar 2016, p. 76). However, rising numbers of fast food organizations in Australia is creating tough competition for Dominos Organization. Therefore, it needs to follow product diversification strategy. For this, it needs to evaluate its present market scenario through SWOT analysis. This study will develop a new product for Dominos Pizza Enterprise in Australia. The new product for this organization will be Mayo-cheese Burger. Before, developing the new product, this study will evaluate the market condition through SWOT analysis. Company Background Dominos Pizza Enterprise is the largest Pizza chain in Australia in terms of its network sales and network store numbers (Dominos Australia 2016). The first store of Dominos Pizza was established in 1983 in Australia. In May 2005, the company has been selected as the publicly listed Pizza chain in Australia (Shah 2013, p.41). The number of stores of this organization has increased from 547 to 571 from the year 2014 to the year 2015. Recent annual report (2015) of the organization has demonstrated earnings of $56,675 (Dominos Pizza Annual Report 2016). However, the company is facing tough challenges from the competitors like KFC, Subway, McDonalds, Eagle Boys and Pizza Hurt. SWOT Table Factors Points Strengths 1. A great popular brand name 2. Huge brand loyalty 3. Quick service yet hygienic food 4. Fluid mobile ordering service 5. Leader in online profile 6. Concrete brand equity due to marketing campaigns and advertising 7. Operation expansion internationally 8. Effective supply chain management Weakness 1. High calorie and high fat food and therefore losing attention from health conscious people 2. Franchise management is becoming tough due to rapid expansion 3. Tremendous employee attrition due to lack in training and development 4. Lower product diversification in comparison to competitors 5. High price of products 6. Unequal service and product quality in different stores Opportunity 1. Efficiency for home delivery service can be improved 2. Regional toppings can be added in existing pizza products 3. New items similar to pizza (bread) can be introduced 4. Number of operation managers can be increased to develop franchise 5. Distribution network can be strengthened 6. New target market can be chosen Threats 1. Prominent competition from small vertical competitors 2. Losing target consumer due to rising competitors such as KFC and Subway 3. Change in consumer buying behavior from high fat to low fat food Table 1: SWOT Analysis of Dominos Pizza Enterprise (Source: Kumar 2016) Explanation of SWOT Table Strength Dominos has able to create a popular brand name and huge brand loyalty (Shah 2013). Therefore, the customers will quickly accept the new product Mayo-Cheese Burger. The organization is quite capable of providing quick service along with hygienic food. Apart from that, concrete brand equity through strong market campaign and advertising has led this organization in reaching to large group of international customers. This strength would also be success factor for the new product. Weakness High calories and high fat food of Dominos are losing the attention of health conscious people (Thornton, Lamb Ball 2016). Therefore, the new product should contain such ingredients, which would not harm health. Franchise management of the organization is becoming too much tough with increased expansion of business. However, leader in online profile strategy would be helpful in mitigating this weakness. High stuff turnover can be found in Dominos due to lack of training and development. Nevertheless, with increased expansion of business this issue can be mitigated. Opportunity Improved efficiency of home delivery service is a trendy strategy for attracting customers of new generation (Booth Whelan 2014). Regional toppings can be added in existing pizza products. Therefore, the customers from different regions can get customized pizza toppings according to their taste. Changing demand of customers in their food taste seems to be an opportunity to introduce new product. With worldwide expansion, there are huge possibilities of creating new customer segment. Threats Prominent competition from large and small-scale organization like KFC, Pizza Hurt, McDonalds and Eagle Boys seems to be tough challenge for Dominos Pizza (Bengtsson Seddon 2013). The customers are shifting from high fat product to low fat product. Changing consumer behavior about food taste is a big threat for the organization. However, this threat can be converted to an opportunity with new product development. Recommendations Target Market Target market will be represented by the following STP analysis: Factors Justification Segmentation Demographics Monthly Income level: AU$ 300 AU$ 600 Age: 15 40 Nationality: Australian (based on regions) Gender: Male/Female Psychographic People who want food quickly People who love healthy food Behavioral People having strong brand loyalty Targeting Middle Class people Lowest risk Highest opportunity of income Young Generation People Positioning Franchise stores Online sales Home delivery Low fat cheese Table 2: Target Market Selection (Source: Created by Author) Analysis of Target Market Mayo-Cheese Burger will especially be prepared for health conscious people, who love healthy food. This new product will primarily be customized for middle class people. Middles class people would be most likely to buy such kind of ready food from restaurant. The goal of Dominos Pizza would be to reach out maximum number of customers through this new product. Since, most of the people in Australia belong to middle class the organization will choose this segment for earning more profit. Apart from that, young generation people, holding job or studying in college, love to have ready food quickly in their break time. Therefore, new generation people will also be beneficial for the new organization. New Product Description Marketing Mix Product The newly launched product Mayo-cheese Burger will widely be known for its quality and freshness. Mayo-cheese Burger will be a combination of Mayonnaise and cheese. It will look like a burger. The Pizza will be available as both vegetarian and non-vegetarian. Customers can choose their preferred toppings for this Pizza. For the convenience of customers, this pizza will be available at three sizes namely regular, medium and large. Price When the target for a product is the middle class people, then the organization will be focused on setting its price at reasonable rate (Hing 2013), which will be same for Dominos Australia. Consistent and uniform price will be set for attracting huge number of customers. Price penetration strategy will be selected for this product. Place This product will be available at every Pizza stores in all over Australia. Customers can also avail Mayo-Cheese Burger in malls and supermarkets. The customers will have the option of online ordering for this product. Promotion The organization will promote their new product through social media and aggressive market campaign. In case of home delivery, delivery of pizzas within 30 minutes of order will maintain a direct contact with the customers. Apart from that, the organization will also offer 50% discount on second Mayo-Cheese Burger on buying one. Customer Value Proposition Figure: Customer Value Proposition (Source: Created by Author) Customer value proposition represents the sum total of benefit, which a customer would get from a new product (Lee, Hallak Sardeshmukh 2016). This would be the same for Mayo-Cheese Burger. This specific product would meet the temporary appetite of customers. The customers do not have to wait much time in the Pizza store for getting it prepared. It can be readily available. Internal driver for the customers regarding this product will be the brand loyalty and its improved quality. Justification of the choice of new product Product Diversification Strategy (Fitting within SWOT) As the main strength of Dominos Pizza is its brand name, new product will quickly be accepted by potential customers (Fogarty 2012). Fluid mobile ordering service of this organization would be blessing for the new product. Customers will be able to order this product from anywhere they want. Effective supply chain management of the organization would ensure proper supply of raw material for the new product. Existing high calories and high fat product are losing the concentration of health conscious people. In such situation, Mayo-Cheese Burger prepared with low fat cheese would be attractive for the customers. The scope of adding customized topping based of regions would make the new product attractive to the customers. Urge of customers to taste new food is also a big scope for Mayo-Cheese Burger. The organization is facing tough competition from various small and large scale organizations. Therefore, diversifying products would be the competitive advantage for the organization. Conclusion While concluding the study, it can be said that Dominos Pizza Enterprise in Australia is facing challenges from their competitors. Therefore, the organization is going to launch a new product namely Mayo-Cheese Burger. The product will be combined with mayonnaise and low fat cheese. It will be shaped like a burger. Australia is mainly populated with middle class people. Therefore, the organization will target middle class customers for gaining more profit. Apart from that, the organization will use price penetration strategy for quickly grabbing large segment of customers. Reference List Bengtsson, J Seddon, J 2013, Cradle to retailer or quick service restaurant gate life cycle assessment of chicken products in Australia, Journal of Cleaner Production,Vol. 41 no. 2, pp.291-300. Booth, S Whelan, J 2014, Hungry for change: the food banking industry in Australia,British Food Journal,Vol. 116 no. 9, pp. 1392-1404. 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Shah, R.B 2013, Impact of Marketing Mix Elements on Customer Loyalty A Study of Fast Food Industry.Prestige International Journal of Management and Research,Vol. 6, no. 2, pp. 31-52. Thornton, L.E, Lamb, K.E. Ball, K 2016, Fast food restaurant locations according to socioeconomic disadvantage, urbanregional locality, and schools within Victoria, Australia,SSM-Population Health,Vol. 2, no. 3 pp.1-9.