For 50+ years, Dominos’ strategic advantage had been fast, efficient delivery. By 2009, that was old news and no longer distinctive and the country’s leading pizza delivery chain was in serious trouble.
Any old pizza
The company had seen almost three years of negative sales, tumbling stock prices, and was struggling to stay relevant amidst new and energetic competitors. Brand research conducted in 2009 by the company’s new management confirmed that the chain was ranked #1 in convenience and price but last in taste. No one wants a pizza that tastes bad.
Management took these tough times as an opportunity to drive change. Gathering input from customers and franchisees, the team introduced a new pizza recipe, added new menu items, and invested to improve its online ordering process. A new mission was launched, promising customers a “totally better pizza experience” which simultaneously attacked competitors’ positions of strength while bolstering the company’s delivery advantage.
Eating their lunch
The changes, supported by bold, honest marketing, were a huge success: Revenues increased 11.9% in 2010. Same store sales increased over 14% -- the largest such increase ever recorded by a major fast food chain. The company became the 4th largest retailer in the U.S., just as instore purchases across the industry tumbled. And in a national blind taste test, the new recipe beat all competitors.
time for a change
Do you have the resolve to listen to your customers? Are you willing to make dramatic changes to your business model in order to create long-term competitive advantage and growth?