This case study gives an overview about Starbucks International Operations. It will explain how Starbucks expanded outside US and the strategies they adopted to give tough competition to its international rivals.
The case study will also show the difficulties that were faced by the Starbucks when they started their international venture. The risks taken by Starbucks and its effects on the revenue in international market is explained.
Introduction
In 2003, US was going through economic recession, many huge retailing companies were suffering losses and ended up bankrupt. However, in 2003, Starbucks had 31% increase in its profit and has made 23% increase in its sale during the first half of 2003.
Trade analyst said that the success of Starbucks
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Both of them had huge competition in Indian market. To gain an advantage in the Indian market both of the companies claimed that they had the original Italian pizza recipe. During 1996, both the companies were busy in finding out the different ways to gain the trust of customers.
Domino’s and Pizza Hut used unique selling point to attract customers. Pizza Hut used their USP of “Dining experience” of having pizza along with take away to the guest. Meanwhile, Domino’s USP was delivering a pizza within 30 minutes to the guest.
To get very deep into the Indian market and win more customers, both the companies decided to make changes in the recipes of pizza and make it suitable according to the flavours of India. Moreover, Domino took a step ahead by making pizza’s according to the different regions of India.
They added local and regional flavours to the pizza, which was mostly liked by the people. Apart from that, Domino’s created only one toll free number for the whole country. Thus, making ordering system much easier for people.
Domino’s and Pizza Hut are expanding their bases in India since 1996. Domino’s went ahead by opening up more than101 outlets by the end of April 2001. Even Pizza Hut made a great progress, with only one outlet in 1996, now it has 19 outlets in all over India by the end of 2001.
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o Starbucks outlets faced most difficulty in Germany and France. They even had trouble Japan, which was earlier considered to be the Starbucks greatest market. o Starbucks international operations failed because they were not well planned as it was planned in its US operations. o In 2005 financial year, Starbucks international operations started adding 16 % profit in the company’s total revenue. o By mid-2005 Starbucks opened up 1,672 stores around the world. Even they set up their first outlet in Bahamas, Jordan and Ireland. o By 2006, Starbuck shook the global market by having more than 11,000 stores set up around the world. o In 1996, Domino’s and Pizza Hut, which are US two big fast food chain entered India. Both of them had huge competition in Indian market. o To gain an advantage in the Indian market both of the companies claimed that they had the original Italian pizza recipe, both the companies were busy in finding out the different ways to gain the trust of customers. o Pizza Hut used their USP of “Dining experience” of having pizza along with take away to the guest. o Domino’s USP was delivering a pizza within 30 minutes to the
The Australian pizza industry is among the most competitive in the world dominated by the market leader, Domino’s Pizza Enterprises Limited (Ibisworld 2013). Today, the publicly listed company is the principal largest, low cost, pizza chain in Australia operating four hundred and ten retail food outlets, employing over 21,000 employees Australia wide (Ibisworld 2013). The business currently provides customers with pickup and delivery pizza meal options offering customers the traditional methods of ordering such as telephone calls and in store walk-ins as well as a digital ordering service via online mobile applications and a desktop website.
1. Central ordering system would ease the marketing and advertising difficulties related to delivery system. Franchise owners should be explained this fact that this would lead to higher customer satisfaction and more business. Moreover, lowered customer call wait will be achieved through this only. This would also lead to serve customers according to their previous orders which would lead to higher customer retention in a competitive market. Thus Pizza
Dominoes was found in 1960 and headquartered in Ann Arbor, Michigan. Domino’s Pizza Inc. is the market leader in the United States pizza delivery and second largest pizza company in the world based on number of units. The company offers a wide variety of pizza products as well as pasta, bread sticks, boneless chicken and wings, desserts and soft drinks. As of the beginning of this year, 2012, Domino’s had 394 company-owned stores and 4,513 franchised Domino’s units in the U.S. and 4,835 franchised stores internationally. Domino’s strategy is to use its superior supply-chain to provide its franchises with lost cost inputs so the franchises may focus on sales and service. Through the online
Domino’s Pizza is the No. 1 Pizza Delivery Company in the world and the undisputed pizza delivery expert. The Company has a unique business and operation model and is a pioneer in the fast food industry. Since 1960, Domino’s Pizza has successfully expanded from 3 outlets in the United State to 9,350 stores operating in seventy countries. Domino’s operation in Malaysia and overseas uses the franchise model. The parent company, Domino’s Pizza LLC is head quartered in Michigan, United State of America. It maintains overall control on the sourcing and supplying of raw materials to the master franchises and enforces quality of the service and products sold. Founded in 1960, Domino's Pizza is the recognized world leader in pizza
Starbucks opened 241 new stores and total net revenues exceeded $3.44 billion during last quarter of 2011 a 16% increase from the same quarter of 2010. The company delivered major gains in its consumer products business, which makes via instant coffee, Starbucks ice cream and other items for sale in grocery stores and other retailers, its revenue from this segment increased by 72 percent. It earned $382.1 million, or 50 cents per share, for the quarter that ended Jan. 1, 2012. That’s up from $346.6 million, or 45 cents per share, in the same quarter the previous year. Maxim's Caterers Ltd of Hong Kong is Starbucks' joint venture partner in Hong Kong, Macau and southern China. In 2006 the company increased its stake in the joint venture, Coffee Concepts (Southern China) Ltd, to 51% from
In tier I cities like Mumbai, pizza hut and dominos are facing a stiff competition from these providers (with respect to branded pizzas)
Pizza Hut has always had the first mover advantage. Their marketing strategy in the past has always been to be first. One of their main strategies that they still follow today is the different things in their menu. Most recent one is the filling of toppings in the pizza corner. Therefore they are offering same customer a different kind of product. Thus they are into Service Development. Pizza Hut is always trying to come up with some
Domino’s Pizza history started over 50 years ago in 1960 and to date, has managed to open its 14,000th store worldwide (Domino's Pizza Singapore, 2017). Domino’s pizza proved to be one of the industry leader by keeping ahead of the market with its innovative technology integration, unique franchising methods. Domino’s Pizza has also strived to maintain business excellence through the affordability, delivery speed and accessibility of their pizza.
When it comes to pizza, everyone has an opin ion . Some of us think th at our current pizza is just fine the way it is. Others h ave a favorite pizza joint th at makes it like no on e else. And m any pizza lovers in America agreed up until recentl y that Dom ino 's home-delivered pizza was amo ng the worst. The home-delivery market for pizza cha ins in th e United States is approximat ely $15 billion per year. Domino's, which owns th e largest home-delivery market share of any U.s . pizza chain, is find ing ways to innovate by overhauling its in-store transaction processing systems and by providing other us eful services to customers, su ch as its Pizza Tracker. And
As we know, Pizza hut still come out with a variety of product such as salad & soup, pasta, dessert and so on. In this case, pizza hut need to a lot of employee to complete their services provided for their customer especially in peak hour. But in Changlon Pizza Hut there just have few workers on duty in one slot. This issue has affected their taste of pizza not as delicious as other branch of Pizza hut because their workers need to be responsible for all kinds of food on the menu, but not only specialized in Pizza.
Domino’s has come a long way after starting its first store in Australia in 1983 and later being taken over by Silvio’s Dial-a-Pizza in 1993 which then rebranded its own stores as Domino’s pizza as well. It was listed on the Australian Stock Exchange (ASX) in the year 2005. It is run successfully by the CEO Don Meij who was once a delivery driver at Silvio’s Dial-a-Pizza and later merged 17 of his stores into Domino’s for getting a shareholding in the company which was privately held in 2001. It has expanded globally now and has operations with more than 1500 in Australia, New Zealand, France, Netherlands, the principality of Monaco and Japan.
For a company as Pizza Hut, it is crucial for it to always keep up with the market demands, in this case delivery was one of them. If Pizza Hut stays in its eat in only market it will probably get eaten up by competitors doing both. To do so Pizza hut has to help the franchisees out as much as possible so that eh company as a whole can move towards delivery.
This has weakened their qualities in the portion Dominos concentrates on - Takeaway/Home conveyance. Its worldwide operational model takes into consideration lean stores, all around prepared staff and adaptability at a nation level to redo menus to suit client tastes. Operational prerequisites have provoked the utilization of innovation to make the client encounter all the more improving, it has a background marked by firsts – they were the first to utilize TV as a conveyance channel, a web based following framework that enables clients to track the pizza arrange and an exclusive purpose of offer framework. A mix of the Company level methodology and the Operational Strategy has brought about Dominos having a notoriety for dependability and predictable pizza quality) – these procedures have guaranteed that Dominos keeps on meeting its client
Domino’s Pizza was founded in 1960 and since then has grown to become the largest pizza delivery company in the United States. It has grown from a mom-and-pop pizza store to a network of company-owned, franchise-owned stores in the United States and across the globe and was recently ranked number 1 in Forbes magazine’s “Top 20 Franchises for the Money” list (David, R 2013, p. 372). Domino’s Pizza was the brain child of the brothers Tom and James Monaghan who grew up in foster care and had dreams of success. In 1960 the brothers opened their first pizza store in Ypsilanti, Michigan named Domi-Nicks with a nine hundred dollar start up loan. In 1961 Tom acquired full and sole ownership of Domi-Nicks by trading his brother James a