Domino's Pizza

The Entrepreneur

Thomas Monaghan

  Product/s

 

Pizza Preparation

The current Domino's menu features a variety of Italian-American entrees and side dishes. Pizza is the primary focus, with traditional, specialty and custom pizzas available in a variety of crust styles and toppings. Additional entrees include pasta, bread bowls and oven-baked sandwiches. The menu offers chicken side dishes, breadsticks, as well as beverages and desserts.

From its founding until the early 1990s, the menu at Domino's Pizza was kept simple relative to other fast food restaurants, to ensure efficiency of delivery. Historically, Domino's menu consisted solely of one pizza in two sizes (12-inch and 16-inch), 11 toppings, and Coke as the only soft drink option.

The first menu expansion occurred in 1989, with the debut of Domino's deep dish, or pan pizza. Its introduction followed market research showing that 40% of American pizza customers preferred thick crusts. The new product launch cost approximately $25 million, of which $15 million was spent on new sheet metal pans with perforated bottoms. Domino's started testing extra-large size pizzas in early 1993, starting with the 30-slice, yard-long "The Dominator".

Domino's tapped into a market trend toward bite-size foods with spicy Buffalo Chicken Kickers, as an alternative to Buffalo Wings, in August 2002. The breaded, baked, white-meat fillets, similar to chicken tenders, are packaged in a custom-designed box with two types of sauce to "heat up" and "cool down" the chicken.

In August 2003, Domino's announced its first new pizza since January 2000, the Philly Cheese Steak Pizza. The product launch also marked the beginning of a partnership with the National Cattlemen's Beef Association, whose beef Check-Off logo appeared in related advertising. Domino's continued its move toward specialty pizzas in 2006, with the introduction of its "Brooklyn Style Pizza", featuring a thinner crust, cornmeal baked in to add crispness, and larger slices that could be folded in the style of traditional New York-style pizza.

In 2008, Domino's once again branched out into non-pizza fare, offering oven-baked sandwiches in four styles, intended to compete with Subway's toasted submarine sandwiches. Early marketing for the sandwiches made varied references to its competition, such as offering free sandwiches to customers named "Jared," a reference to Subway's spokesman of the same name.

The company introduced its American Legends line of specialty pizzas in 2009, featuring 40% more cheese than the company's regular pizzas, along with a greater variety of toppings. That same year, Domino's began selling its BreadBowl Pasta entree, a lightly seasoned bread bowl baked with pasta inside, and Lava Crunch Cake dessert, composed of a crunchy chocolate shell filled with warm fudge. Domino's promoted the item by flying in 1,000 cakes to deliver at Hoffstadt Bluffs Visitor Center near Mount St Helens.

In 2010, the company changed its pizza recipe "from the crust up", making significant changes in the dough, sauce and cheese used in their pizzas. Their advertising campaign admitted to earlier problems with the public perception of Domino's product due to issues of taste.

Since the companies stock low in late 2009, the company's stock had grown 233 percent by late 2011. Even as the economy has suffered and unemployment has risen, Dominos has seen its sales rise dramatically through its efforts to rebrand and retool its pizza.

Services

In 2004, after 44 years as a privately held company, an employee of Domino's Pizza rang the opening bell at the New York Stock Exchange and the company began trading common stock on the NYSE under the ticker symbol "DPZ".

Industry trade publication Pizza Today magazine named Domino's Pizza "Chain of the Year" in 2003,2010,and 2011. In a simultaneous celebration in 2006, Domino's opened its 5,000th U.S. store in Huntley, Illinois, and its 3,000th international store in Panama City, making 8,000 total stores for the system. Also that year, the Domino's Pizza store in Tallaght, Dublin, Ireland, became the first in Domino's history to hit a turnover of $3 million (€2.35 million) per year. As of September 2006, it has 8,238 stores which totaled US$1.4 billion in gross income.

In 2007, Domino's introduced its Veterans, Delivering the Dream franchising programs and also rolled out its online and mobile ordering sites. In 2008, Domino's introduced the Pizza Tracker, an online application that allows customers to view the status of their order in a simulated "real time" progress bar. In addition, the first Domino's with a dining room opened in Stephenville, Texas, giving the customers the option to either eat in or take their pizza home. Since 2005, the voice of Domino's Pizza's US phone ordering service 1-800-DOMINOS has been Kevin Railsback.

In a 2009 survey of consumer taste preferences among national chains by Brand Keys, Domino's was last — tied with Chuck E. Cheese's. In December that year, Domino's announced plans to entirely reinvent its pizza. It began a self-flogging ad campaign in which consumers were filmed criticizing the pizza's quality and chefs were shown developing the new product.The new pizza was introduced that same month, and the following year, Domino's 50th anniversary, the company acquired J. Patrick Doyle as its new CEO and experienced a historic 14.3% quarterly gain. While admitted not to endure, the success was described by Doyle as one of the largest quarterly same-store sales jumps ever recorded by a major fast-food chain.

Business Concept

Starting in 1973, Domino's Pizza had a guarantee that customers would receive their pizzas within 30 minutes of placing an order, or they would receive the pizzas free. The guarantee was reduced to $3 off in the mid 1980s. In 1992, the company settled a lawsuit brought by the family of an Indiana woman who had been killed by a Domino's delivery driver, paying the family $2.8 million. In another 1993 lawsuit, brought by a woman who was injured when a Domino's delivery driver ran a red light and collided with her vehicle, the woman was awarded nearly $80 million, but accepted a payout of $15 million. The guarantee was dropped that same year because of the "public perception of reckless driving and irresponsibility", according to Monaghan.  In December 2007, Domino's introduced a new slogan, "You Got 30 Minutes", alluding to the earlier pledge but stopping short of promising delivery in a half hour. The company continues to offer "30 minute or Free" guarantee for orders placed in its stores in India.

Entrepreneur's Profile

Tom Monaghan (CEO of Domino's Piza)

When Tom Monaghan was five years old, his father passed away. the guy was left with his brother wit single poor mother who could not cope with the difficulties of having tow children with a salary of $27.50. Therefore, she took them to an orphans' house and abandoned them there. 

From the second grade, Monaghan says he grew up determined to be a priest. “I entered the seminary in tenth grade, but got kicked out,” he recalls, “I think probably because I was more rambunctious than most kids.” He returned to regular school but never managed to get good grades, placing last among his 44 classmates. “They weren’t even going to graduate me, but I pleaded with a nun,” says Monaghan. “She said, ‘Well, you got good marks in the seminary, so I’ll let you graduate. But don’t ever ask me to recommend you for college.’”

Following high school, Monaghan used his savings to enroll in Ferris State College in Big Rapids, Michigan. “I went for a quarter, earned good marks, and got accepted at the University of Michigan,” he says. “But I didn’t have any money.” As a result, Monaghan dropped out of college and hitchhiked to Chicago to look for employment. Instead of taking on a job, Monaghan decided to take advantage of the GI Bill to attend college for free. 

In 1956, Monaghan enlisted in the Marines, which would mark a major turning point in his life. “It was the best thing that ever happened to me,” he recalls. “I attribute my success in business to the Marine Corps.” When he finished his military service in 1959, Monaghan went back to university, this time with an interest in architecture. However, he was again unable to pay for his books and thus forced to drop out after just three weeks. 

It was after a conversation in 1960 with his brother, a mailman in Ann Arbor, that Monaghan’s life would take a new direction. A friend of his brother’s was selling a pizza shop in Ypsilanti, Michigan, called DomiNick’s. His brother was interested but afraid to buy into it alone. “I was having problems paying my way through school, so I said yes,” recalls Monaghan. With a $900 loan from the bank and a 15-minute lesson in pizza-making from Dominick, the brother’s had opened their new pizzeria and were off.

How the business started

It all started in the year 1960, when James told his brother Tom Monaghan about a pizza shop for sale called Dominick’s Pizza. James was very excited to buy this shop but he was worried to do it alone so that he told his brother Tom to be his partner. They bought it for $500 and gave a down payment of $75.

Tom got a quarter an hour lesson on making the pizza, after that the trainer and the previous shop’s owner had left. The plan was to divide the work to night, and day shifts so that once can cover the night’s shift and the other the day’s one which James rejected because he wanted to focus on his day job as a post officer.

 After 8 months, James quit and traded his shares with his brother for a second hand Volkswagen car. This led Tom to revitalize the image of the eating joint and name it Domino’s Pizza.