Domino's Pizza

2016
Domino’s Pizza:Jubilant
FoodWorks
Rajat dholakia157030592019
[CONTINUES EVALUATION COMPONENT]

Name: Dholakia Rajat
Enrollment No.:157030592019
Company Name: Domino’s Pizza:Jubilant FoodWorks
College: Atmiya Institute of Management and Science
Submitted To: GUJARAT TECHNOLOGICAL UNIVERSITY.
Batch: MBA (2016-17) 2ND
Sem
2 | P a g e

INDEX
NO. PARTICULAR PAGE NO.
1. INTRODUCTION. 3-6
2. PART 1 :-
(1) Human Resource Management 7-10
(HRM)
(2) MARKETING MANAGEMENT 11-16
(MM)
(3) MANAGEMENT INFORMATION
SYSTEM
17-21
(MIS)
(4) QUANTILITY ANALYSIS-2 22-26
(QA-2)
PART 2:-
(1) FINACIAL MANAGEMENT(FM) 27-31
(2) PRODUCATION AND OPERATION
MANAGEMENT(POM)
32-39
(3) COST AND MANAGEMENT 40-46
3 | P a g e

Introduction:
The History of Domino’s Pizza
Tom Monaghan, the founder of Domino's Pizza, in his first restaurant
somewhere in the 1960s.
• Dominos Pizza is the second largest franchised pizza chain in the U.S.A., and the
history of Dominos Pizza is similar to its rival Pizza hut; two brothers started it with
borrowed equity in the sixties. Tom and James Monaghan bought a small
Michigan Pizzeria called Dominick's, which was jointly run by them until James
traded his share for a second hand car. Tom revitalized the image by changing the
name to Dominos Pizza .
By the late seventies there were over 200 franchise pizza businesses in the States
and Dominos Pizza was ready to go International. In 1983 Dominos Pizza opened
its doors in Winnipeg, and in the same year opened its one thousandth store.
Later that same year Domino's corporate history was to begin in Australia with its
first franchise in Brisbane, on the East coast.
5 | P a g e

The locations for Dominos Pizza grew quickly from here as they sprung up in all sorts
of diverse places including Bogotá. Despite Domino's Pizza springing up diverse
locations, they were still a very traditional company. Domino's Pizza menu had been
kept very simple and streamlined; they only sold one type of pizza crust which they
named the regular pizza. Domino's Pizza dough was shaped by tossing the dough and
pulling it into shape. The pizza menu included just two sizes of dough, it was not until
much later that competition forced them to add a medium and extra large sized
pizza. There were no such things as side orders you could have Pizza, pizza or Pizza
and you could only drink a Coke with it.
• In 1989 the history of Domino's Pizza was to change when the Deep Pan pizza was
introduced, for the first time in twenty five years the company was being forced to
react to market demand. This move consolidated the financial base and ensured
the growth of Domino's Pizza , as the same year they opened their five thousandth
store.
• The wind of change had started and by 1992 they were to introduce the first non
pizza item to their menu, this was obviously a reluctant move as it was bread
sticks. Domino Pizza dough was already on hand and the making of bread sticks is
not so different.
• For many years the company had advertised that if the delivery of their pizzas
took longer than thirty minutes then the pizza would be delivered free. This was
parodied by the Teenage Mutant Ninja Turtles movie which specified the "pizza
dude has 30 seconds" to complete the delivery. The turtles pizza was late and they
received a refund of $3 for "being two minutes late, dude!" However the benefits
to Domino Pizza was enormous as millions of kids were to hear the name of
Domino Pizza endorsed on celluloid. In 1993 Domino Pizza discontinued this policy
and stated that if a customer was unhappy they could have a new pizza or a
refund.
6 | P a g e

• By 1994 Dominos Pizza marketing policy widened as chicken wings were
introduced to the menu. At the same time the company hit the African continent
as they opened a store in Egypt . By 1996 Dominos Pizza website was launched
and the company declared global sales of nearly $3 billion.
• Despite their reluctance to add a wider range menu they have as a company given
the pizza industry many innovations that have now become standard. The belt
driven pizza oven was the invention of Domino Pizza and they began using
corrugated cardboard delivery boxes which were very effective at holding the heat
within the pizza during the delivery time. Ever mindful of the fact that a cold pizza
must be about the worst dining experience on earth Dominos pizza introduced the
"Heat Wave," a portable electrical bag system that keeps the pizza hot during
delivery.
• By 1997 they had also had an internal modern facelift as their stores were all
brightened up and the company introduced a new logo. Domino Pizza
continued to grow exponentially and in 1997 they opened seven stores in
one day but on 5 different continents.
7 | P a g e

• Domino's Pizza arrived in Mexico in 1989, and through these years has been a
presence throughout the country. It currently has 589 corporate stores are -429
and 160 are franchises, through which serves more than 500,000 families a week,
with the support of about 10,000 employees. We are a company that works with
passion and pride every day to earn your preference.
8 | P a g e

HRM
(Human Resource Management)
9 | P a g e

DOMINO’S VALUES:
• Place the customer experience at the core of all we do
Their customers are the reason for their existence. They demonstrate their appreciation by
providing them with high quality food and superior service, in a clean, welcoming
environment, at a great value.
• committed to their people
Provide opportunity, nurture talent, develop leaders and reward achievement. They
believe that a team of well-trained individuals with diverse backgrounds and
experiences,10
working together in an environment that fosters respect and drives high levels of
engagement, is essential to continued success.
• Strive continually to improve
It is a learning organization that aims to anticipate and respond to changing
customer,employee and system needs through constant evolution and innovation.
10 | P a g e

Recruiting suitable applicants:
Human Resources
- At Domino’s Pizza Group, recruiting and retaining the best peopleis priority and it’s the
job of Human Resources to make sure that stay true to thiscommitment. This department
helps us to attract and hold onto the very best professionalsin the industry which is an
important part of maintaining its leadership position.
The Recruitment and Selection Process:
The Domino’s Pizza Group Ltd recruitment process consists of various stages and is
dependent on the success rate of the vacancy. Short listing will commence dependent on
application and the matching of the required skills and experience.
Contacted to explain the role in further details and if suitable, an interview will be
arranged.
• Further interviews may occur before an offer is made.
11 | P a g e

Due to high volumes of applications, it is regretful that although they endeavour to
contact all candidates regarding the status of their application, they may be unable to
contact everyone. If you are not
contacted within 28 days
of your submitting your application, it means that your application has not been
successful on that occasion.
E-Recruitment:
In March 2009 Domino’s launched a dedicated
e-recruitment website
to help more than2,500 initial job vacancies across 434 stores across Australia , New
Zealand followed shortly after with more than 500 available positions. In the first week
more than
10,000 job applications
were received. For the first time ever, the website enabled prospective job applicants to
log on and find out exactly what it’s like to work for Domino’s, view current job
vacancies and play an interactive delivery driver game to show ‘it’s more fun with us
.The 2,500 initial job vacancies came as a result of the successful launch of the new menu
earlier in the year. While providing all relevant employment information for job
applications,
dominosjobs.com
also equips15
franchisees and store managers with all the relevant tools to recruit staff effectively and
quickly at a store level. Dominosjobs.com.au is now their main recruitment tool with all
available jobs updated on the site regularly.
12 | P a g e

MM
(Marketing Management)
Defining Marketing Management:
13 | P a g e

Marketing management is the organizational discipline which focuses on the practical
application of marketing orientation, techniques and methods inside enterprises and
organizations and on the management of a firm's marketing resources and activities.
14 | P a g e

Domino’s Pizza:
Introduction:
Domino’s Pizza is one of the most popular pizza chain and is a delivery company
for different varieties of pizza. In today’s world, Domino’s has been equivalent to
quality, freshness and good service. This fast food company has continued to
grow by leaps and bounds. The company’s innovative ideas, the commitment to
provide quality products and its dedication to the customer base have helped it to
maintain its position at the top.
Tom Monaghan and his brother James launched Domino’s in the year 1960. The
next year Tom bought his brother’s share with a trade of Volkswagen Beetle. The
company was then renamed Domino’s Pizza. Dominos opened its first outlet in
India in the city of New Delhi. Later it opened other outlets in almost all the cities
of India and at present, it has more than 500 outlets in India.
The chief competitors of this coolest dug-out are Pizza Hut, KFC, McDonald and
Subways.
1. Product in the Marketing mix of Domino’s pizza:
Domino’s is widely known for its quality and fresh pizza. The boxes for the food
products are specially designed to keep everything fresh and hot. The products
offered are of both vegetarian and non-vegetarian variety. In order to seize the
market Domino’s has worked on a unique concept of localizing the flavors.
Domino’s pizza comes in three different sizes –
• Small
• Medium
• Large
In the varieties, Country Special Pizza, Mexican Green Wave Pizza, Zesty Chicken
pizza, Seventh Heaven Pizza, Chicken and Prawn Pizza, Grand Supreme Pizza,
Chicken and Camembert Pizza are some of the popular pizzas.
Besides pizzas, Domino’s also deals in some other food items. Calzone pockets,
Garlic Bread Sticks, Stuffed Garlic Bread Sticks, Taco Indiana, Pasta Italiano
(white sauce), Chicken Wings, Choco Lava Cake, Spicy Baked Chicken and
15 | P a g e

Butterscotch Mousse Cake are also available here. Beverages like Thumps-up,
Fanta and Coke have been introduced in the menu.
Dominos also gives a choice in the matter of crust like theFresh Pan Pizza and
Cheese burst pizza. It has also started offering options including whole-wheat
crust and any other company has yet not utilized this option. The buyer also has a
choice on the toppings. Extra cheese on a pizza and Dips like Roasted Pepper Dip
and Cheesy Jalapeno Dip are available on demand.
2.Price in the marketing mix of Domino’s pizza:
Domino’s main target is the lower middle class and middle class income group.
Best of quality with reasonable pricing is its motto. Dominos has come up with a
uniform and consistent pricing policy. This keeps the base price in check and
helps the company to attract customers. If you look at the competition, then
Domino’s has been evenly prized with Pizza hut. But the prices are high as
compared to KFC and McDonalds and hence the price conscious customers will
prefer the indirect competitor – McDonalds and KFC above Domino’s.
Affordability is the key to the tremendous success of this reputed company. To
maintain the price level many new and innovative schemes are launched on
regular basis. It always gives its customers value for one’s money. Special
discounts are offered at regular intervals. For Wednesdays, a special scheme was
launched where one free pizza was offered with one buy. Many free food items on
purchase of selected and exclusive products are some of the methods to lower the
prices and attract the customers. Pizzas are available in three sizes large, medium
and regular so that one can buy whichever is affordable to them.
3.Place in the marketing mix of Domino’s pizza:
Domino’s pizza has always maintained a direct channel with its customer base.
The customers either call or send a message by telephone for the pizza delivery.
Consumers can also place their order online through the official website of
Dominos. In both the cases, the packaged food product is delivered and
subsequently received by the buyer at the mentioned address. If the order does
not reach the buyer in allotted thirty minutes, then the buyer does not have to pay
16 | P a g e

for it. The order is delivered free of charge. The delivery boys are the real heroes
of this organization. The detail of every route is decided beforehand and after an
order is placed, this route is followed so that minimum time is taken.
One of the most common methods of eating a pizza is to dine-in the Dominos
outlet. Dominos has many outlets in very good locations. Most of the shopping
malls and main streets have a section for Domino’s pizza. Domino’s is currently
located in 73 countries and has more than 10000 stores.
4.Promotions in the marketing mix of Domino’s pizza:
Domino’s idea of maintaining direct contact with its consumer base is one of the
leading factors that have taken the company to unachievable heights. Its policy of
door-to-door deliveries is amazing. Nearly every individual knows that Domino’s
will deliver the pizza in thirty minutes flat. Domino’s sales depend on
telemarketing and the efficiency of their trained delivery boys.
Besides evaluating their own strength and weaknesses, Dominos has also been
observant of their competitors.
• McDonalds
• KFC
• Subway
• Pizza Hut
• Burger King
The one field where the other companies have been simply unable to give
competition is in delivering the pizzas on time.
To promote its food products, Dominos is always introducing new schemes and
offers in order to maintain its grip on its customers. The home delivery is always
free of charge. Sometimes the company offers a 50% discount on the second
pizza. At other times, the company introduces schemes like one small pizza free
on one large pizza. Sometimes lucky coupons are also awarded to loyal buyers.
The most regular and common scheme is of giving a coke free on every purchase.
Thus, the advertising team is actively involved in the marketing and promotional
strategy to boost up the sales.
The visual media of television has been utilized to the maximum capacity. Many
beautiful ads for domino’s pizza with reputed actors have been aired and they all
17 | P a g e

have been very popular with the masses. Most ads of Domino’s are targeted to be
product introduction or ads or the brand’s reminder ads so that people look at the
ad and order a Domino’s Pizza.
18 | P a g e

MIS
(Management Information System)
Something About MIS (Management Information System):
• Management information system, or MIS, broadly refers to a computer-based
system that provides managers with the tools to organize, evaluate and efficiently
manage departments within an organization. In order to provide past, present and
prediction information, a management information system can include software that
19 | P a g e

helps in decision making, data resources such as databases, the hardware resources
of a system, decision support systems, people management and project
management applications, and any computerized processes that enable the
department to run efficiently.
• The role of the management information system (MIS) manager is to focus on the
organization's information and technology systems. The MIS manager typically
analyzes business problems and then designs and maintains computer applications
to solve the organization's problems.
Objectives:
• MIS is very useful for efficient and effective planning and control functions of the
management. Management is the art of getting things done through others. MIS
will be instrumental in getting the things done by providing quick and timely
information to the management.
• Reports give an idea about the performance of men, materials, machinery, money
and management. Reports throw light on the utilization of resources employed in
the organization.
• By making comparison of actual performance with the standard and budgeted
performance, variances are brought to the notice of the management by MIS which
can be corrected by taking remedial steps.
Technology
• Point-of-sale System
• Pulse
20 | P a g e

• Pulse Evolution
• Pizza Tracker
• Online polling System
Point of sale System
• Captures purchase and payment data at a physical location
• Goods and Services are bought and sold
• Computer, automated cash registers, scanners or other digital devices
Pulse
• Which improve customer service, reduced mistakes, shorter training times
• Pulse performs some functions-
 touch screen interface
 maintaining sales figures
 Compiling customer information
 Delivery driver routing system
Pulse Evolution
• Use thin-client model
• Collect data and send them over the internet
• State of the art online ordering system which includes pizza tracker
• Allows customers to watch a simulated photographic version
• Customize pizza size, sauces and toppings
Pizza Tracker
• Displays a horizontal bar that tracks an order’s progress graphically
21 | P a g e

• Available on all online & mobile ordering systems
MIS
• Processing Support System
– Point-of-sale system
• Management information system
– Pulse
22 | P a g e

• Decision Support System
– Online polling system
Improve its business performance:
• Provides efficient management function
• Pulse improved customer service, reduced mistakes, shorter training times
• working to cut costs and increase customer satisfaction.
Domino’s rolled out its state-of-the art online ordering system, which includes Pizza
Tracker.
• allows customers to watch a simulated photographic version
• pizza as they customize its size, sauces, and toppings
• The image changes with each change a customer makes
• Ordering progress can be viewed by pizza tracker
• Pizza Tracker displays a horizontal bar that tracks an order’s progress graphically
• In 2010, Domino’s introduced an online polling system to continuously upload
information from local stores.
23 | P a g e

QA-2
(Quantitative Analysis-2)
Introduction
What is 'Quantitative Analysis'
24 | P a g e

Quantitative analysis is a business or financial analysis technique that seeks to
understand behavior by using complex mathematical and statistical modeling,
measurement and research. By assigning a numerical value to variables,
quantitative analysts try to replicate reality mathematically.
Quantitative analysis can be done for a number of reasons such as
measurement, performance evaluation or valuation of a financial instrument. It
can also be used to predict real world events such as changes in a share price.
Transportation process:
Transportation planning is the process of defining future policies,
goals, investments and designs to prepare for future needs to move people and
goods to destinations. As practiced today, it is a collaborative process that
incorporates the input of many stakeholders including various government
agencies, the public and private businesses. Transportation planners apply a
multi-modal and/or comprehensive approach to analyzing the wide range of
alternatives and impacts on the transportation system to influence beneficial
outcomes.
Transportation planning is also commonly referred to as transport
planning internationally, and is involved with the evaluation, assessment, design
and siting of transport facilities (generally streets, highways, bike
lanes and public transportlines).
Transportation in Domino’s
25 | P a g e
DOUGH
RETAIL OUTLET

/
26 | P a g e
SUPPLIERS
(Toppings &
Seasonings)
Wheat Proccessed @
Jalandhar
DOUGH
COMMISSARY
REFRIGERATED TRUCK
RETAIL OUTLET

ITEM SHELF LIFE
Dough ball 5 days
Mexican Wrap Base 3-4 days
Cheese Dip 4-5 days
Seasoning and Toppings 4-5 days
Onion, Tomato, Capsicum 5 days
Cheese Blend 4-5 days
Production Process @ DOMINO’S
27 | P a g e

FM
(Financial Management)
29 | P a g e

Introduction:
Financial management refers to the efficient and effective management of
money (funds) in such a manner as to accomplish the objectives of the
organization. It is the specialized function directly associated with the top
management. The significance of this function is not seen in the 'Line' but also in
the capacity of 'Staff' in overall of a company. It has been defined differently by
different experts in the field.
Objective
• Profit Maximization occurs when marginal cost is equal to marginal
revenue. This is the main objective of Financial Management.
• Wealth maximization means maximization of shareholders' wealth. It is an
advanced goal compared to profit maximization.[4]
• Survival of company is an important consideration when the financial
manager makes any financial decisions. One incorrect decision may lead
company to be bankrupt.
• Maintaining proper cash flow is a short run objective of financial
management. It is necessary for operations to pay the day-to-day expenses
e.g. raw material, electricity bills, wages, rent etc. A good cash flow ensures
the survival of company.
• Minimization on capital cost in financial management can help operations
gain more profit.
30 | P a g e

Ratio:
Particulars 2014 2015 2016
Total Current
Assets
- 602.637 -
Total Current
Liabilities
- 375.983 -
Revenue - 2216.528 -
Total Assets 596.333 799.845 -
Net Income - - 181.804
Average
Shareholder
Equity
- - -1765.265
Cost of Goods
Sold
1533.397
Inventory 37.944 36.861
Current Ratio:
The current ratio is mainly used to give an idea of the company's ability to pay
back its short-term liabilities with its short-term assets.
Domino's Pizza Inc's Current Ratio for the fiscal year that ended in Dec. 2015 is
calculated as
Current Ratio (A: Dec.
2015 )
=
Total Current Assets (A: Dec.
2015 )
/
Total Current Liabilities (A:
Dec. 2015 )
= 602.637 / 375.983
= 1.60
31 | P a g e

The current ratio can give a sense of the efficiency of a company's operating
cycle or its ability to turn its product into cash. Companies that have trouble
getting paid on their receivables or have long inventory turnover can run into
liquidity problems because they are unable to alleviate their obligations. Because
business operations differ in each industry, it is always more useful to compare
companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally
between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its
obligations. A ratio under 1 suggests that the company would be unable to pay
off its obligations if they came due at that point. While this shows the company is
not in good financial health, it does not necessarily mean that it will go bankrupt -
as there are many ways to access financing - but it is definitely not a good sign.
Asset Turnover:
Asset Turnover measures how quickly a company turns over its asset through
sales.Domino's Pizza Inc's Asset Turnover for the fiscal year that ended in Dec.
2015 is calculated as
Asset Turnover
= Sales / Average Total Assets
=
Revenue (A: Dec. 2015
)
/
( (Total Assets (A: Dec.
2014 )
+
Total Assets (A: Dec.
2015 ))
/ 2 )
= 2216.528 / ( (596.333 + 799.845) / 2 )
= 2216.528 / 698.089
= 3.18
Companies with low profit margins tend to have high asset turnover, while those
with high profit margins have low asset turnover. Companies in the retail industry
tend to have a very high turnover ratio.
32 | P a g e

Inventory Turnover:
Domino's Pizza Inc's Inventory Turnover for the fiscal year that ended in Dec.
2015 is calculated as
Inventory Turnover (A: Dec.
2015 )
= Cost of Goods Sold / Average Inventory
=
Cost of Goods Sold (A: Dec.
2015 )
/ (
(Inventory (A: Dec.
2014 )
+
Inventory (A: Dec.
2015 ))
/ 2 )
= 1533.397 / ( (37.944 + 36.861) / 2 )
= 1533.397 / 37.4025
= 41.00
Inventory Turnover measures how fast the company turns over its inventory
within a year. A higher inventory turnover means the company has light
inventory. Therefore the company spends less money on storage, write downs,
and obsolete inventory. If the inventory is too light, it may affect sales because
the company may not have enough to meet demand.
33 | P a g e

POM
(Production and Operation
Management)
34 | P a g e

Operations Strategy
Introduction
Dominos is one the leading pizza delivery companies globally. The Company has a
unique business and operation model and is a pioneer in the fast food industry.
Since1960, Domino’s Pizza has successfully expanded from three outlets in the US to9,
350 stores operating in seventy countries. Dominos operation in Pakistan and overseas
uses the franchise model. The parent company, Domino’s Pizza LLC is head quartered in
Michigan, USA. 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.
35 | P a g e

Region problem:
There are regions defined by the parent company and in this division they consider that in
Pakistan there are Muslims living and Saudi Arabia also had Muslim population so they
categorize Pakistan under master franchise of Saudi Arabia. Same taste pizza is selling in
Pakistan as sold in Saudi Arabia those people have different taste and Pakistani people
had different that is the main reason why dominos is not having market share in
Pakistan .The pizza offering by dominos is not according to the Pakistani culture .
Corporate Vision
The Dominos Corporate Vision statement Passionate focuses on the following key areas:
• Being better than the competition
• Ensuring a quality product
• Providing excellent service
• Creating lasting relationships with its employees and the communities within which
it operates.
A clear corporate vision ensures that the company and its franchises can work towards
meeting common goals thereby increasing its business in a potentially virtuous cycle
overall global vision translates into specifics at a country level in a seamless manner so
that the overall strategic vision is kept in mind at all times.
Mission
“Domino’s pizza is the pizza specialist who consistently delights the customer with great
taste and choice pizza with friendly, courteous team members providing prompt, safe
delivery service”
36 | P a g e

Core Competencies of Dominos
Dominos core competencies have evolved over time. Their unique sets of strengths have
helped the Company dominate the pizza food service industry, and a leader in the home
delivery / take away.
The Value Chain
It is important to consider how a customer need drives Dominos to create the product.
The customer need that drives the entire value chain is the need for a dependable take
away restaurant, reasonably priced hot quality food and variety that suits the local palette.
Dominos has focused on these key customer needs throughout the value chain, and has
not allowed any digressions in this area. Its global operational model allows for lean
stores, well-trained staff and flexibility at a country level to customize menus to suit
customer tastes. Operational requirements have prompted the use of technology to make
the customer experience more enriching, it has a history of firsts – they were the first to
use TV as a distribution channel, an online tracking system that allows customers to track
the pizza order and a proprietary point of sale system. A combination of the Company
level strategy and the Operational Strategy has resulted in Dominos having a reputation
37 | P a g e

for reliability and consistent pizza quality) – these strategies have ensured that Dominos
continues to meet its customer needs.
Product value chain
Porter’s model which depicts Dominos operations as a collection of “value-adding
activities”. The five primary activities are processes that are mainly concerned with the
production of the products and services to the external customers. These are necessary to
the business processes. The activities indicated as support activities are activities that are
vital for the development of the appropriate transforming resources. These can be looked
as value adding activities, for instance incorporating the use of technology such as being
able to place orders by text message add to the convenience Dominos provides and
increases the accuracy of order All these constitute the business processes of the
organization.
Product & Service Design
Introduction
Dominos has positioned and established itself as the pioneer in the pizza delivery service.
They are giving different offerings for different segments like local favorites, Global
favorites, Premium pizzas, kids’ corner and designer’s pizza .A fair degree of flexibility
is available where customers can customize their pizza and can choose to purchase
“combos” thereby providing better value for money. Additional items such as soft drinks
accompany these choices. Dominos has successfully implemented this concept of mass
customization by catering to customer’s individual needs through unique combinations.
38 | P a g e

Dominos standard product and services offering is universal across the world – quality
pizza delivery in approximately thirty minutes.
Failed Product and Product Re-design:
Dominos openly acknowledge shortcomings and use customer feedback to revise their
strategy and approach. In an effort to design their product again, the company
reconfigured its recipe. They tested several combinations of cheeses, sauces and crust to
finally arrive at a recipe that was welcomed by the public. It is useful to note that the end
customer was heavily involved in the process of the product being re-designed and
influenced the outcome largely. This approach of using customer feedback can be
credited the company witnessing an increase in sales following the redesigning of their
product.
New Product Development figure:
39 | P a g e

Operations Challenge of the Product/Service Mix
Additionally the thirty minutes delivery guarantee that was initially introduced but later
cancelled due to a relatively high incidence of accidents and snatching of pizza on roads.
This is an example of a service delivery challenge the company faced. Recognizing that
the thirty-minute delivery was an attractive option for the customer, Dominos
reintroduced the concept, however allowing itself some leeway and positioning it as a
“gift” to the customer.
Quality Management
Quality Assurance and Quality Control
Dominos owns its own supply chain network, 99% of its Master franchises (Saudi
Arabia) source their ingredients and other requirements from this entity, these are then
stocked at central commissaries, which then distribute the items needed to the smaller
franchises / stores directly on a 3 day basis, hence reducing the need for stockpiling of
resources, and ensuring a JIT type set-up. This central control on supplies ensures
consistency is maintained in all the raw materials that go into the food produced by the
restaurants.
Dominos Pizza Group has a documented Supplier Approval Procedure in place.‟
Dominos is in agreement with all suppliers of food ingredients and packaging to a
detailed product specification for the products supplied. This is reviewed by a Food
Technologist to ensure that the product is safe, legal and consistently of high quality.
40 | P a g e

Supply Chain Management
Dominos Supply Chain
Dominos has an innovative supply chain model that ensures all purchases are managed
centrally across all franchises around the world. Master franchise supplies beef, cheese,
butter chips, and dough ingredients to the 3 commissary in Pakistan. These commissaries
take chapatti floor from sunny mill (quality floor) and add imported ingredients after
mixing they left the dough for 2 days at 0c temperature then it’s ready for supply to the
branches. This approach gives certain advantages, such as consistent quality, fresh
products at a lesser cost .But sometimes over stock of dough, packaging material etc.
cause losses to dominos if demand is less or exceeds.
Supply chain of Islamabad franchise:
(1)All the raw materials and food stuffs, such as (dough, ingredients)are prepared in
Rawalpindi commissary
(2)The commissary, then supplies to the three branches in Islamabad
(3)Branches had to use the inventory within 4 days ,commissary then delivers after 4
days
41 | P a g e

CMA
(Cost Management Accounting)
42 | P a g e

Food Cost and its Control
Costing should not be confused with cost accounting. Costing is simply the
process of arithmetic, means of memorandum statements or the methods of
integral control. Costing is the technique and process of ascertaining costs. The
principles and rules, which govern the procedure of ascertaining costs of
products or services, is the technique used in ascertaining costs. With the
development and changes in methods, the techniques of costing change. To
control the Food Cost; the purchasing, receiving, storing, issuing, food
production, food sales, etc. are to be controlled.
Definition
Food cost is defined as the cost of raw material (food) used to prepare a dish or
food.
The net stock in hand at the beginning of the day + stock (raw material)
purchased or received from store – net stock in hand at the end of the day is
defined as Food Cost for the day.
OBJECTIVES OF COST CONTROL AND ADVANTAGES
OF COST CONTROL:
In hotel industry, the food cost is classified into materials (raw food cost).It is a
major portion of the total cost. The smaller the hotel / restaurant more are the
food cost and larger / exclusive the hotel / restaurant less is the food cost. Food
cost is one of the major costs of the Restaurant and there is always a risk of food
cost going high and low due to the negligence of the staff. In case the food cost
goes high then that means direct loss to the hotel/ restaurant; as the cost of sale
(Food Cost) will go high and the gross profit (sale – food cost) will come down.
On the other hand if the food cost is low then that means either the guest is given
a small portion or he is served substandard quality of food. This will
subsequently result in losing permanent customers and hence will reduce sale
43 | P a g e

and profit. In case food cost is not controlled carefully then, in spite of restaurant
making good sale it may run into net loss. By controlling the cost control we can
assure the profitability of the hotel / restaurant in case the sale is more than the
Break Even Point Sale.
Obstacles to food and beverages Control:
There are numerous obstacles which effect on the food and beverage items cost.
1. The cost of the basic raw material varies from season to season and
depending upon the size of order. In off season the cost of raw material is always
more.
2. In case a large quantity of goods (raw material) are ordered then the cost of
each unit is much less as compare to when a small quantity of goods (raw
material) is ordered.
3. The price of raw material may always go high during the shortage of goods in
the market due to high consumption or low production.
Limitation of Food Cost Control
It looks very simple that if the standard recipe and portion size control is followed
then the food cost will be always under control. In actual, in spite of following
standard recipe and portion size the food cost may differ. The following factors
affect the food cost, which may or may not be under the direct control of Chef
and the Management.
1. Fluctuation in Raw Material Cost:
2. Wrong Purchasing of Raw Material:
3. Reduction in Sale:
4. Wastage during preparation of Food:
5. Pilferage in Food Sale:
6. Spoilage due to wrong storage:
Methodology and Phases of Cost Control
1. PURCHASING:
44 | P a g e

The purchase department must ensure that the right quality of food, at
competitive price and right quantity of raw material should be procured to keep
the cost control.
2. RECEIVING AND STORING OF RAW MATERIAL:
The raw material received by stores must be inspected for the quality and the
quantity desired, and in case found not up to requirement should be returned to
supplier for replacement. All stores received must be stored at a proper place. It
is saying that in stores there should, ‘a place for everything and everything is
place’. The store keeper must ensure that no food item should get spoiled and if
it happens then it is charged to store keeper.
3. ISSUING:
All goods should be issued after a proper requisition. The store keeper must
follow the rule of ‘FIRST IN FIRST OUT (F.I.F.O.), which means the goods
received first are issued first.
4. WASTAGE:
The wastage, at all levels, i.e. Portioning, Cooking, Storing, etc. should be as
minimum as possible. The wastage of food should be avoided. All trimmings of
vegetables, bones, and other raw material wastes should be used to cook stock,
soups, gravies, sauces, etc.
5. PROPER STORING OF COOKED FOOD:
In case the cooked food is left at the end of the day then it must be stored at a
proper temperature so that it can be used on the following day, if so required.
6. SPOILAGE:
The cooks must ensure that there should be as far as possible no spoilage of
food in the kitchen.
7. ENSURE NO FOOD IS SERVED WITHOUT BILL:
In case food is allowed to be picked up without proper bill then this will increase
the food cost.
8. PORTION CONTROL:
The chef must ensure that dish is as per the standard potion, as both the larger
portion and smaller portion is harmful to the hotel / restaurant. A large portion will
increase the food cost and a small portion will dissatisfy the guest.
9. STANDARD RECIPE:
45 | P a g e

The Chef must ensure that always standard recipe should be followed, or
otherwise, the guest may not always find similar standard of the dish and this will
dissatisfy him.
The objectives and advantages of Food Cost Control are to satisfy the guest and
make reasonable good profit at all times.
Purposes of Food Cost Accounting
1. To Know Cost:
It is through the mechanism of cost accounting that costs of products or services
are ascertained. Any of the method may be used to know the cost but it should
be near to the actual costs.
2. To Fix the Selling Price:
Only if one knows the total cost than one can fix the selling price of a dish. The
selling price is fixed in Restaurants, keeping in view the food cost. More the
luxury restaurant, low is the food cost and vice versa. A small road side
restaurant may have as high as 45 – 50% food cost and a speciality restaurant
may have as low as 20 – 25% food cost.
3. Cost Controlling:
The Chef / Restaurant Manager / Cost Accountant while fixing the selling price of
a dish must know its exact recipe. He must also keep in mind the labour cost,
the over heads while fixing the food cost and its variances.
4. Preparation of Account and Control of Food Cost:
He will regularly review the production, sales and operating results, stocks of raw
material and finished food and other items are valued at cost price or market
price, whichever is lower. The stock inventory is taken by physically verifying
each item. After ascertaining the stocks and taking a note of costs and sales, he
is able to control the food cost.
5. Operating Policies:
The Food Cost Accounting helps management in formulating operating policies
like what should be the food cost, whether to bake bakery products in house or
out source. Even desserts can be bought from outside if the sale of the same is
not sufficient to keep a dessert chef.
Essentials of Food Cost Control
1. Proper Purchasing
2. Control in Purchasing
3. Follow Purchasing Procedure
4. Control Food Production
46 | P a g e

5. Follow Standard Recipe
6. Follow Standard Portion Size
SUMMARY / RECAPITULATION:
1. Food Cost should not be confused with costing.
2. Food cost is defined as the cost of raw material used to prepare the dish /
menu.
3. Sale – Food Cost = Gross Profit
4. Sale – Total Cost = Net Profit: Introduction to Food Cost and its Control
47 | P a g e

Domino's Pizza

More Related Content

What's hot

Similar to Domino's Pizza

Recently uploaded

Domino's Pizza