Papa John’s pizza is the world's third largest pizza consumer company in terms of sales, behind Pizza Hut and Domino's Pizza . The pizza industry is largely fragmented and competitors include international, national and regional chains, as well as a large number of local independent pizza operators.

1. Assignment on
Working Capital Management and
Profitability on Pharmaceutical Company
MGT490 Sec:
Submitted To:
Dr. Iqramul
School of Business
Independent University, Bangladesh (IUB)
Submitted By:

3. Background
In 1984, John Schnatter opened his first Papa John’s restaurant, and Papa John’s has been going
strong ever since. Today, Papa John’s is the recognized leader of the pizza category and now
owns or franchises more than 4,600 restaurants in all 50 states and 34 countries worldwide. The
company’s former CEO, John Schnatter owned approximately 20% of the company’s shares.
The pizza industry is made up of two segments: pizza chains like Papa John’s and pizzerias. This
are independently owned restaurants that accounted for 57% of locations and 48% of industry
sales.
The pizza industry was also comprised with 4 channels of distribution; these are:
Traditional sit-down: mostly made up of pizzerias and Pizza Hut locations
Delivery: calling in and placing an order.
Carryout: allowed consumer to place their order via phone or online and pick it up in person at
the location. Little Caesars is well known location that permits only carry outs .
Take n’ bake: provided pre made pizza for customers to take home and prepare themselves at
their best convenience.
Pizza industry success is also accountable to location and economy stability. Having a good
location allows customer easy access to pick up their orders. Economy determines peoples .
More than 25 years later, one thing remains the same – Papa John’s is still fully committed to
delivering on their brand promise of “Better Ingredients. Better Pizza.”
Papa John’s pizza is the world's third largest pizza consumer company in terms of sales, behind
Pizza Hut and Domino's Pizza . The pizza industry is largely fragmented and competitors include
international, national and regional chains, as well as a large number of local independent pizza
operators. Papa John's have differentiated itself as a brand that offers quality pizza at premium
prices. This premium position has garnered the company favorable profit margins by avoiding
deep discounts on menu items, a strategy that is employed by many of their top competitors.

4. Overview
The restaurant industry is broadly classified into two categories, full-service restaurants and
limited-service restaurants. Pizza restaurants fall under the “limited-service” concept. Items on
menus at limited-service restaurants are usually low-cost items when compared with “full-
service” restaurants’ menus. Items on limited-service restaurants’ menus are often limited, and
customers have to pay upfront. On the other hand, customers at these restaurants often have the
freedom to customize their food, but within limited choices.
The pizza industry
According to CHD Experts, a Chicago-based food service database and analytics firm, the pizza
market in the US alone is worth more than $38 billion, of which more than 54% is accounted for
by independent pizza operators. Among national pizza chains, Papa John’s has been competing
with Pizza Hut, a subsidiary of YUM! Brands (YUM), as well as with Domino’s Pizza, Little
Caesars, and Papa Murphy’s Holdings.
Apart from pizza companies, Papa John’s has to compete with other QSRs (quick-service
restaurants like McDonald’s Corporation and Burger King Worldwide, a subsidiary of
Restaurant Brands International (QSR).
You can gain exposure to the restaurant industry through the Consumer Discretionary Select
Sector SPDR Fund, which invests about 10% of its portfolio in restaurant stocks, including some
of those mentioned above. Alternately, you can gain exposure to Papa John’s International
(PZZA) by investing in the Power Shares Dynamic Leisure and Entertainment ETF (PEJ), which
has 2.2% of its total portfolio invested in PZZA, whereas the Power Shares Dynamic Food &
Beverage ETF (PBJ) has approximately 2.3% of its portfolio invested in Papa John’s

5. Competitive analysis
We are focusing on our main competitors. The name and their core competencies are given
bellow:
Pizza Hut: Pizza Hut operates and franchises restaurants in 88 countries plus the United States.
Pizza Hut is famous for its dine-in establishments, although they are starting to open only carry
out and delivery establishments. Pizza Hut’s dine in menu includes a variety of options; from
pizza to salads. Another service provided by Pizza Hut is catering. In 2013, Pizza Hut held an
11.5 percent of the market share.
Dominos: Dominos in 2013 had 10 percent of the market share. They also have a very high
international exposure. In 2014, Dominos was present in 77 countries plus the United States.
They franchised more than 10,800 carryout and delivery units. In the period of 2011 to 2013, its
revenues increased from $1,652 million to $1,802 million. Company’s global retail sales
exceeded $8 billion in 2013. Dominos was mainly known for its pizza delivery service; they
mainly focus on acquiring convenient locations for customers. In addition to offering a variety of
pizzas with different crusts and toppings, Dominos also offers pasta, bread bowls, sandwiches,
and others. Dominos also offered its customers the ability to track their orders.
Little Caesars: Little Caesars hold the fourth place after Papa John’s. They own 4.7 percent of
the market share. They operate in more than 20 countries with over 2,500 units. Little Caesars is
mainly famous for its takeout service; their main business was having Hot-N-Ready pizzas for
customers. They were constantly being made so they were ready as soon as ordered. Like Papa
John’s, its menu is simple; it consists of a variety of pizza, chicken, cheese bread, desserts, and
sodas. They are mainly focused on cutting costs than expanding its product line.
FIVE FORCES ANALYSIS
The contention among existing rivals in the pizza business is high. The key gathering map in
Exhibit 3 depends on product offering expansiveness and the utilization of circulation channels.
The main 4 contenders fundamentally offer a similar product offering, aside from Pizza Hut, that
offers plates of mixed greens, calzones, pastas, sandwiches, chicken, pastries, and that's only the
tip of the iceberg; Dominos offers an assortment of pizzas, pasta, bread bowls, sandwiches,
wings, breadsticks, treats, and others. Daddy John's and Little Caesars both have a basic menu of
pizza, chicken, sweets and wings. The second trademark is dissemination channels, be it through
eat in, do, or take out. Daddy John's, Little Caesars, and Dominos is generally complete and take
out. Pizza Hut is the one known for its feast in areas.

6. Threat of New Entrants: Moderate
• Entry barriers are low
• Though product differentiation is difficult, Papa John possess brand identification; its
ongoing passion to offer the perfect pizza.
• Existing members are looking to expand their product line
• Smaller pizzerias emerging
• Buyer demand is growing
THREAT OF RIVALRY: High
• High exit barriers
• Similar product line
• Numerous competitors
• Competitive prices
• There is large number of competing firms that are roughly the same size
• The restaurant, pizza industry has already mature and saturated, leads to slow industry
growth
Threat of Bargaining Power of Suppliers: High
• Franchisers are required to purchase their supplier from the Quality Control Centers
•Suppliers products are critical to industry
• No better substitutes for these suppliers
• To reduce the cheese price volatility, Papa John’s partnered with a third-party entity formed by
franchisees thus it allowed Papa John’s to purchase cheese from BIBP at a fixed quarterly price.
• Profits and losses from BIBP were then passed on to Papa John’s.
• Forward pricing to stabilize food cost.
Threat of Bargaining Power of Buyers: High
• Switching costs are low
• Buyers have the ability to postpone purchases

7. • Buyers are price sensitive
• Smaller pizzerias
Threat of Substitute Products: High
• Grocery stores selling frozen pizzas
• Other fast food chains
• Lower prices
• New pizzerias are emerging
Objective
MissionSTATEMENTS
Customers
Papa John’s will create superior brand loyalty, i.e. “raving fans”, through (a) authentic, superior-
quality products,
(b) Legendary customer service and
(c) Exceptional community service.
Team Members
People are our most important asset. Papa John’s will provide clear, consistent, strategic
leadership and career opportunities for Team Members who
(a) Exhibit passion toward their work,
(b) Uphold our Core Values,
(c) Take pride of ownership in building the long-term value of the Papa John’s brand and
(d) Have ethical business practices.
Franchisees
We will work as a team with our franchisees to create continued opportunity for outstanding
financial returns to those franchisees who
(a) Adhere to Papa John’s proven Core Values and systems,
(b) Exhibit passion in running their businesses and
(c) Take pride of ownership in building the long-term value of the Papa John’s brand.

8. Shareholders
We will produce superior long-term value for our shareholders.
Vision Statement:
Its vision is to make the company become better and better with the high quality products and
services to serve its customers in the best way. Besides, being a wonderful place for people to
enjoy their meals, Papa John’s expects to be a wonderful to work and to live.
The best pizza at Papa John’
Employees at Papa John’s will receive great impressions at their working place because they will
be provided a fitness facility with excellent trainers as well as great campuses.
Papa Johns gives its commitment with the best products for the community and wants to protect
the environment with its best effort. From the ingredients to its package as well as the way to
product dishes, they are friendly-environmental.
The expectation of a better world is the effort for all of Papa John’s employees try their own best
to bring the most wonderful products and services. Therefore, you will not regret when you
coming to Papa John’s and get some products for your meal.
Besides, the company is the positive donators for the hungry or donating funds that runs for
helping people who are suffering the effect of disaster. Up to now, Papa John’s has a huge
contribution into the funds with more than $1 million to play a great part in the disaster recovery
and relief.
There is no reason for you to miss its dishes at the discounted prices by the use of Papa John’s
offer codes and have a deeper understanding of its Papa John’s vision.
Marketing Mix
Product
Until 1996, Papa John’s menu only offered the following four core items:
 pizza
 breadsticks
 cheese sticks
 canned soft drinks
However, in 1996, the company tweaked its menu and introduced thin crust pizza alongside its
traditional crust pizza. In September 2002, to maintain its edge in an increasingly competitive
market, Papa John’s introduced “Papa’s Chickenstrips,” prepared from all-white-meat. In 2004,
the company introduced “Papa’s Wings” chicken wings, and later in 2012, the company
introduced its “Chicken Poppers.”

9. Place:
Papa John’s Pizza is an international company with its headquarters base at Jeffersontown in
Kentucky. Operations started at the back of a tavern in Jeffersontown and with time its presence
has spread to four thousand and seven hundred locations. In the United States, it has 3,500
establishments and the rest 1,200 are located in thirty-seven countries spread all over the world
like United Kingdom, Singapore, France, Russia, Spain, Turkey, UAE, Portugal, Ireland,
Mexico, China, Canada and India. Its 4,000th restaurant was opened at New Hyde Park in New
York in the year 2012. Papa John’s Pizza primarily deals in delivery and carryout.
Some of its outlets are equipped for dining-in with chairs and tables. Its distribution channel
includes Franchisee stores but the corporate operations keep an eye on them to guarantee brand
consistency. In the year 2002, it became first in the domestic market that promised pizza delivery
via online ordering anywhere and everywhere in the United States. Mobile ordering includes
Android and iPhone applications with payment options like PayShare and Google Wallet.
Price:
Papa John’s Pizza receives 5% of total sales from the franchisee owners as royalty fees and
another 7% is set aside by them for advertising. It has adopted a penetration pricing policy and
has kept its product prices affordable and reasonable to gain a competitive advantage over other
rival brands. Papa John’s Pizza has also implemented promotional pricing policy to increase its
product sales and garner larger revenues by offering several incentives in form of discounts,
vouchers and coupons.
Promotion:
Papa John’s Pizza has adopted an extensive marketing policy to increase its brand awareness. It
has launched Papa Rewards Program to reward customer loyalty and Papa Cards can be attained
via its website or third-party retailers. Papa John’s Pizza offers deals and incentives like one
small pizza free on purchase of a large pizza, two pizzas at reduced prices, upgrading orders on
special days and discount vouchers. Papa John’s is the official pizza sponsor of the NFL
(National Football League) and has been the official pizza of the Super Bowl for the past four

10. years. The company also procured Peyton Manning, quarterback of the Denver Broncos, as its
marketing partner. These represent major advertising initiatives.
All Papa John’s domestic, both company-owned and franchised, restaurants contribute a
percentage of their total sales to an advertising cooperative located in their area for advertising
programs. PJMF (Papa John’s Marketing Fund), which receives a percentage of total sales from
each of the restaurants, supports these programs by providing advertising materials.
As stated in the company filings, Papa John’s depends on both print material and digital
channels for promotions in the international market. Print material includes flyers, newspaper
ads, and in-store marketing. Digital channels include search-engine marketing, social media,
mobile marketing, email, and SMS text.
Both company-owned and franchise restaurants get involved in sponsoring community events,
sporting events, and school programs, all of which tend to help in building brand awareness.
“Papa Rewards,” an e-commerce loyalty program, was developed by Papa John’s to gain the
loyalty of customers and increase the frequency of usage of their e-commerce ordering platform.
Adding to this, the company’s domestic restaurants have offered a gift card called the “Papa
Card,” that can be used to buy pizzas at all traditional Papa John’s domestic restaurants. This
Papa Card can be purchased from any of the Papa John’s restaurants or from third-party retailers
as an online digital card.
Strategy
Domino's is dominating the pizza industry right now.But that doesn't mean that rival Papa John's
plans to copy the Domino's strategy of expanding its selection of sandwiches, pasta, and side
dishes, according to Jonathan Maze at Nation's Restaurant News."Pizza will be our focus,” Papa
John’s COO Steve Ritchie told investors on a recent conference call."Do not expect to see us
introduce an extensive development of sandwiches, side items, that would create complexity
within the operations model.”New items at Domino's, particularly the "specialty chicken" strips
topped with cheese and sauces, are driving up the average ticket sale at Domino's, CEO Patrick
Doyle told investors earlier this year.The company is opening hundreds of new locations and
profits are soaring. Morgan Stanley recently named it the "leader in US delivery pizza." domino's
specialty chicken
Domino's specialty chicken product.Domino'sBusiness at Papa John's is also thriving.Sales rose
6.5% in the first quarter. "A combination of service, quality and technology are all contributing
to strong sales of late," Maze writes.Technology is also helping brands like Pizza Hut, Domino's,
and Papa John's take market share from other restaurant brands. Papa John's says that more than
half of orders now come through digital channels.

11. • Official Pizza Sponsor of the NFL
- 41% polled named Papa John’s most active sponsorship of NFL (2013)
• Peyton Manning
- 62% named him face of the NFL (2013)
- Owner of 27 Papa John’s Franchises
- Market Cap was $900 M in 2012 (Manning), now $2.14 B
• J.J. Watt
- New spokesman for Papa John’s
- All Pro defensive player, considered one of the most prominent faces of the NFL
• Specials and Promotions
- “Double Cheeseburger Pizza”
- Official pizza of the MLB (April 3, 2016)
MARKETING STRATEGY
• Local Level
- Target consumers within the delivery area of the restaurant
- Community orientated activities within schools, sports venues, and other
organizations
- Special promotions
• National Level
- Television, print, direct mail, digital, mobile marketing, and social media
- “Co-op” – Individual Papa John’s may be obliged to contribute percentage of
sales towards market-wide advertising campaign
• Papa John’s Marketing Fund
• Official Pizza Sponsor of the NFL
- 41% polled named Papa John’s most active sponsorship of NFL (2013)
• Peyton Manning
- 62% named him face of the NFL (2013)

12. - Owner of 27 Papa John’s Franchises
- Market Cap was $900 M in 2012 (Manning), now $2.14 B
• J.J. Watt
- New spokesman for Papa John’s
- All Pro defensive player, considered one of the most prominent faces of the NFL
• Specials and Promotions
- “Double Cheeseburger Pizza”
• International Level
- Focus: people who live or work within a small radius of a Papa John’s restaurant
- Radio, television, mobile-marketing, print materials, and digital marketing
- Local promotions to raise awareness: community events, sporting events, and
school programs
TECHNOLOGYSTRATEGY
• Highest digital sales mix in category
 Mobile represents over 50% of total digital sales
• Highest rating according to The Search Agency Report “The Mobile Experience
Scorecard – Restaurants and Catering”
• iOS app upgrade
 Current iOS version: Customer Reviews with an average rating of
greater than 4 out of 5 stars
• Fully responsive web design to improve the customer online/mobile experience
 Ability to change size and aspect ratio based upon individual screen
size
• e-Commerce
 Pay Share
 Online order
SWOT analysis
Some of Papa John’s strengths are:
1. The use of only fresh ingredients: Papa John’s requires its franchisees to purchase their
ingredient from their quality control centers to maintain their high quality standards
2. Convenient ordering systems: Papa John’s allows their customers to order online, through
their app or through their kindle

13. 3. National and global exposure: 723 owned restaurants, 3,705 franchised, and exposure in
34 foreign countries
4. Good brand name and high brand loyalty: World’s third largest pizza chain, trailing only
Pizza Hut and Dominos
5. Strong employee training program.
6. Efficient restaurant layout.
7. Marketing innovations
Papa John’s weaknesses include:
• A limited menu: the company only offers pizza, chicken wings, sides and desserts. This limits
them because aside from being a pizza restaurant, they are also considered a fast food chain
restaurant and are going up against competitors like Burger King and Mc Donald’s that offer a
variety of foods in their menus.
• Poor international exposure: Currently they are only present in 34 other countries. If they want
to continue to grow they should consider introducing Papa John’s to more countries.
• Franchise management.
• Limited number of stores.
• Low distribution channels – limited dine in establishments.
Papa John’s is faced with some good opportunities in the industry, some of them are:
 The addition of more items to their menu, this will position them higher in the
competition with their rivals that have already made this move
 Papa John’s should increase their franchisee opportunities, but as well as company owned
restaurants and venture into new countries around the world introducing the Papa John’s
brand
 Papa John’s should create more brand awareness by focusing more on their customers,
sponsoring other sports events, and targeting other age groups
 Diversification of business
 The boom of social sites
Papa John’s faces several threats in the industry, for instance:

14.  Intense competition in fast food pizza industry: They continue to be third in the race with
their top rivals Pizza Hut, and Dominos
 National economic instability: Economy instability not only in the US, but as well as in
the other countries they are present, varies with time. This instability causes changes in
peoples’ buying power
 Health-conscious people: The health conscious trend could harm them because pizza is
stereotyped as an unhealthy dish.
 New Pizzerias emerging
 Competitors’ lower prices
FINANCIAL ANALYSIS
Papa John’s financial analysis is shown in Exhibit 9. In 2014, the company achieved sales per
restaurant exceeding $1 million, operating income averaging $186,000 per unit, and cash flow be
close to $127,000 per location. Over the time period of 2011 to 2013, Papa John’s net income
increased from $4.7 million to $69.5 million.
We can see that Papa John’s gross profit margin decreased in 2010 to 2012 from 23.3 percent to
22.7 percent. The operating income also decreased from $95 million to $87 million. Papa John’s
revenue saw an increase of $57 million but then in the period of 2010 to 2012 it fell to $52
million.
All together for Papa John's to proceed in the race for the best pizza chain eatery on the planet, it
must make some change to their development and purpose system. Regardless, Papa John's
ought to extend its product offering and incorporate more beneficial menu choices. Hence,
adjusting each kind of purchaser, from vegans to meat cravers, to their image. This move has
been made by the majority of its primary opponents, bringing about extraordinary achievement.
For example, Pizza Hut ascribes its unfathomable triumph to its eat in menu. They offer lunch
buffets, serving of mixed greens bars, calzones, pastas, and some more. Despite the fact that
pizza is the main dinner of decision for Americans, lately a pattern that overwhelmed the entire
eatery industry rose. As per the Case, a study in 2010 by the NRA presumed that 7 out of 10
shoppers needed to eat sound when eating out. Growing its product offering and including more
beneficial choices is a basic strategy for Papa John's.
Second, Papa John's should expand their residential and universal piece of the overall industry,
making a solid proportion among the two. Right now, Papa John's is just present in 34 different

15. nations. They work 723 organization claimed eateries and 3,705 diversified foundations. As
indicated by the Case, the organization intends to open more than 1,000 new units throughout the
following 5 years, with 95 percent of these units being diversified. This will make an unequal
proportion between organization possessed and diversified. In the event that by one means or
another Papa John's could wander into different nations by obtaining/joining forces with littler
pizza eateries, this won't just acquaint the brand with new nations, yet in addition it will expand
their incomes since organization possessed eateries deliver more income. In 2013, household
organization claimed eateries had an income of $635,317 in contrast with $82,873 from North
American diversifying.

16. Weighted Competitive Strength Assessment
Key Success
Weig
ht Pizza Hut Dominos Papa Johns Little Caesars
Factors
Rating Score Rating Score Rating Score Rating Score
Location .25 8 2 10 2.5 6 1.5 7 1.75
Social .10 8 .80 7 .70 9 .90 6 .60
Media
Engagement
Flexibility .20 10 2 7 1.4 6 1.2 6 1.2
Health .20 10 2 7 1.4 5 1 4 .80
Conscious
Customer .25 8 2 8 2 8 2 8 2
Service
Total
1 8.80 8 6.6 6.35

17. Financial Analysis
2013 2012 2011 2010 2009
Revenue $1,439 mill $1,343 mill $1,218 mill $1,126 mill $1,106 mill
Gross Profit 58% 23.6% 22.7% 23.3% 21.6%
Operating 7.4% 7.4% 7.1% 7.7% 8.6%
Expenses
Operating $107 mill $100 mill $87 mill $87 mill $95 mill
Income
Net Income $70 mill $62 mill $56 mill $52 mill $57 mill
Third, Papa John's is known to be one of the official backers of the NFL, and their commercials
and advancements are enormous through them. Dad John's ought to consider growing their
promoting endeavors. At present, Papa John's showcasing system changes by topography, in the
U.S it comprises of TV, print, and online networking advertising and publicizing, and also
privately focused on advancements. Universally, Papa John's just concentrates on a little sweep
encompassing a foundation; and they utilize TV, radio, and print publicizing. Globally, Papa
John's ought to dispose of their ads through radio, since these days nobody truly tunes in to the
radio, they simply play music from their telephone. Rather they should collaborate with huge
supermarkets where they can target everyone and offer in store advancements. This type of direct
showcasing will help Papa John's expansion their image mindfulness among other individuals
from various foundations. In the U.S new online networking patterns have emerged, similar to
the advancement application "Snared." Papa John's should collaborate with applications like this,
where individuals can discover their advancements. Individuals these days like the excite of
discovering great advancements and coupons. Additionally, rather than promoting by area, Papa
John's should center its assets by doing it broadly. This won't just spare them cash in the
coordinations division, yet it will achieve a more noteworthy market. At last, Papa John's should
showcase their pizza as a solid pizza.

18. A last and most essential proposal for Papa John's is to incorporate their clients' needs and needs
into their aim procedure. As indicated by the Case, and it was specified before for this situation
examination; John Schnatter fabricate Papa John's on three essential key achievement factors:
unrivaled client benefit, constrained menu, and quality items. Today, that unrivaled client benefit
factor is not some portion of their vital aim. All together for Papa John's to endeavor and
overwhelm its rivals, they have to center their business around purchasers. They could do this by
utilizing a connection in their site that would assume costumers to a position where
they could voice out their conclusions on the web. Dominos built up this and it has been to a
great degree effective for them. Moreover, one of Papa John's key achievement factors is worker
preparing and advancement. This is a decent path for administration to impart this into their
representatives.
AS A STRATEGY MAKER OUR STRATEGY WILL BE
Better Social Strategy: Social media is an opportunity to tell your story, engage with supporters
and get results--which means there's no time like the present to create or refresh your social
media strategy.
Nowadays people are using social media a lot. If we going to visit or ordering something on
restaurant 1st we are see their review then make our decisions. This reviews matter a lots in
restaurant business. So we should do our best to get a good review from customers. And another
most important thing is responding on customer’s reviews.
If someone wrote any bad reviews we should reopens on them. Don’t response it’s disappointing
that a company so large is ignoring the opportunity to serve its customers better. So we should
engage and respond to customers.
A good service: A good service makes a customers. So we will be try to provide a good service
to our customers to make them happy. Like deliver pizza on time.
Extant or increase menu: the company only offers pizza, chicken wings, sides and desserts.
This limits them because aside from being a pizza restaurant, they are also considered a fast food
chain restaurant and are going up against competitors like Burger King and Mc Donald’s that
offer a variety of foods in their menus. The addition of more items to their menu, this will
position them higher in the competition with their rivals that have already made this move.
Increase Franchising: Currently they are only present in 34 other countries. If they want to
continue to grow they should consider introducing Papa John’s to more countries.
Papa John’s should increase their franchisee opportunities, but as well as company owned
restaurants and venture into new countries around the world introducing the Papa John’s brand.

19. Conclusion
The growth in pizza units domestically and internationally is a testament to the innovative
strategies businesses are employing. Menu changes and value priced products have been
important drivers to the success of many top pizza operators. With the rising youth population
and greater disposable income among households, investment in technological ordering systems
for customer convenience promises to be significant differentiators among a saturated pizza
industry. As the main pizza consumers, aged 18 to 44, increase their use of online services,
greater promotions tied to social media present opportunities to increase sales and garner more
market share.