Dominos' Pizza Case Study

Corporate crisis is defined as an
unexpected event that creates
uncertainty and threatens an
organization’s priority goals
and public image.

Managers facing crises consider the
possible consequences of their reaction:
On one side - reacting to uncontrolled events may
foster further awareness to the problem.
On the other side, ignoring such events may result in
risking social legitimacy (the firm may be perceived
as being irresponsible, dishonest, or acting in a
manner that exhibits little concern for the
community).

Academic research: The acceptance response
Bradford and Garrett (1995) investigated the effectiveness of five Across conditions, the
different corporate responses to a crisis event. The possible
“accept
responses were
responsibility”
(a) no response, (b) denial, (c) offer an excuse, (d) agree that the firm
caused the event but argue that the severity of the event is less than response was found to
publicized, and (e) agree that the event is severe and accept be the optimal
responsibility for the event. communication
strategy.
The possible conditions were
(a) the firm can provide evidence that they committed no unethical action
(b) the firm can provide evidence that they had no control over the event (c)
the firm can provide evidence that the event is less severe than suggested in
the media (d) the firm accepts responsibility for the event.

Dominos Pizza
Crisis Management Case Study:
Addressing Domino’s Pizza crisis, the firm
decided to react to the event (taking 48
hours respond). They have presented an
apology, suggested information (both public
and personal) and a promise for taking
future steps.
Interestingly, it chose unconventional media
channels to confront their consumers, the same
channels in which the crisis found its way
through - social media interactions

Dominos Pizza
Crisis Management Case Study:
Description of the crisis:
On the night of April 13, two Domino’s
employees engaged in an act of food
violation, posted their acts on YouTube.
The videos went viral online, viewed by
millions until blocked.

Dominos Pizza
Crisis Management Case Study:
Dominos Reactions to the crisis: Chronological overview
April 14:
1. The employees were fired and warrants were issued for their arrest.
2. Domino’s posted a statement on its corporate website.
“The opportunities and freedom of the internet is wonderful, but it also comes with the risk of anyone
with a camera and an internet link to cause a lot of damage, as in this case, where a couple of
individuals suddenly overshadow the hard work performed by the 125,000 men and women working
for Domino’s across the nation and in 60 countries around the world”.
3. On an interview with Domino’s spokesman he says:
“Nothing is local anymore, that’s the challenge of the Web world. Any two idiots with a video
camera and a dumb idea can damage the reputation of a 50-year-old brand.”

Dominos Pizza
Crisis Management Case Study:
Dominos Reactions to the crisis: Chronological overview
April 14:
4. The company decided not to issue a press release. Dominos spokesman was
interviewed on that:
“the company can deal with tens of thousands of impressions, but a strong response from
Domino’s would alert more consumers to the embarrassment.”
5. The company shared an apologetic e-mail from the employees:
“It was all a prank and me nor Michael expected to have this much attention from the
videos that were uploaded! No food was ever sent out to any customer. We would never
put something like that on youtube if it were real!! It was fake and I wish that everyone
knew that!”

Dominos Pizza
Crisis Management Case Study:
Dominos Reactions to the crisis: Chronological overview
April 15: Domino’s activated social media activities:
6. In a YouTube video, Patrick Doyle, president of Domino’s
USA, apologizes for the incident, and describes the steps
his company is taking to ensure such an incident
doesn’t happen again.
“We sincerely apologize for this incident, we thank members of the online community who
quickly alerted us and allowed us to take immediate action. Although the individuals in
question claim it’s a hoax, we are taking this incredibly seriously.” Moreover, he said that
the Conover store has been shut down and is being sanitized from top to bottom and
promises to make sure “that people like this don’t make it into our stores.”

Dominos Pizza
Crisis Management Case Study:
Dominos Reactions to the crisis: Chronological overview
April 15: Domino’s activated social media activities:
7. Dominos started social media activity on twitter (under the username
“dpzinfo” - it receives 1525 followers as for today). It provides information on
the brand and on preventive acts.

TrendsSpotting Insights on Dominos Pizza
Crisis Management Case Study:
Consumer research will be needed to follow consumers’
perceptions and behaviors in few months time.
Currently, it seems that although the images were
shocking, the company has succeeded in reacting well to
the event. Online trend tools indicate that the buzz
around it lost an interest.

TrendsSpotting Insights on Dominos Pizza
Crisis Management Case Study:
Online trend tools indications:
twitter trends Blog citation trends
Online trend tools indicate that the buzz around it lost an interest.

TrendsSpotting Insights on Dominos Pizza
Crisis Management Case Study:
Online trend tools indications:
Search volume trends
Online trend tools indicate that the buzz around it lost an interest.

Examples of other corporate crises:
Johnson & Johnson’s response to the Tylenol incident – 1982
An unknown terrorist spiked Tylenol capsules with cyanide which resulted in
seven deaths. Media coverage made it clear that J&J had no control over this
post manufacture product tampering, suppressing any Could counterfactuals.
The actions taken by J&J were considered as highly effective:
The company recalled extra-strength Tylenol from all store shelves across the
country, offered a reward for the murderer, and introduced a tamper resistant
package. In this case, although the brand’s market share fell sharply (from 35%
to 8%), it has recovered within a year.

Examples of other corporate crises:
• Burger King employee takes bath in the burger chain’s sink
• Jetblue flights cancellation
• Alleged defects in tires manufactured by Firestone
• Gene-spliced corn contamination of Taco Bell products
• Benzene contamination in Perrier bottled water
• Racial discrimination by Texaco in the promotion of employees

Academic References:
Ahluwalia, R., Burnkrant, R. E., & Unnava, H. R. (2000). Consumer response to negative
publicity: The moderating role of commitment. Journal of Marketing Research, 37, 203-
214.
Bradford, J. L., & Garrett, D. E. (1995). The effectiveness of corporate communicative
responses to accusations of unethical behavior. Journal of Business Ethics, 14, 875-892.
Dawar, N., & Pillutla, M. M. (2000). Impact of product-harm crises on brand equity: The
moderating role of consumer expectations. Journal of Marketing Research, 37, 215-226.
Murray, E., & Shohen, S. (1992). Lessons from the Tylenol tragedy on surviving a
corporate crisis. Medical Marketing & Media, 27, 14-19.

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