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Dough Pizza Company’s Decline Phase Planning Report

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Updated: Jul 11th, 2021

Introduction

When Dough Pizza reaches the stage of maturity, it is expected to be well-established in the restaurant industry, have well-known products and services, as well as a loyal following of customers with average growth. Based on the contingency plan developed for the company, it was found that the restaurant may not achieve profitability in the next five years, which is why selling the company may be a good solution. Nevertheless, prior to making a decision on whether the company should be sold, it is important to assess the viability of the transaction, determine the value of Dough Pizza, and discuss changes that can impact the nature of the company altogether.

Viability of Selling Dough Pizza

The five-year projection of profit has shown that Dough Pizza is unlikely to reach profitability, which points to the possible financial struggles that the company will face. However, it is expected that once it reaches maturity, the profit will reach a steady level since the restaurant will acquire regular clients and will implement consistent marketing campaigns over the years. Therefore, the restaurant is not a strong candidate for sale, as it may not bring the desired level of income to those who decide to purchase it. A small business such as Dough Pizza is run by families or friends, which makes them unique (Wagner, 2014).

There is a possibility of the restaurant being purchased by a franchise of a large pizzeria chain; however, this means that Dough Pizza will stop operating as an independent company. Furthermore, the workers of the restaurant risk their positions if Dough Pizza is purchased, and the work that they have put into the small business should not be overlooked. As mentioned in Exodus 35:35 NIV, “he has filled them with skill to do all kinds of work as engravers, designers, embroiderers in blue, purple and scarlet yarn and fine linen, and weavers – all of them skilled workers and designers.”

Value of Dough Pizza

When determining the value of the business, it is recommended that Dough Pizza’s owners evaluate the rates of customer turnover and the numbers of loyal clients that have continued supporting the restaurant over the years. As a client-centered business, Dough Pizza’s value is based on customer satisfaction, which has a direct impact on increased revenues. If the restaurant has a solid client base that is enough for earning a profit, such a base should be valued.

The loyal customer base also represents some opportunities for effective marketing efforts. An example of this can be a campaign using real Dough Pizza clients who share their positive experiences of visiting the restaurant. The connection between customers and the restaurant can serve as a unique value proposition to attract prospective clients and facilitate a new wave of profit for the restaurant as a mature business.

Another important point to mention regarding the assessment of Dough Pizza’s value is associated with the team that runs the restaurant. Over the years, it is expected that the company hires professionals in their field that help the restaurant grow as a business. If they were treated and compensated fairly for their labor, the workers would represent one of the most crucial assets to the enhancement of the company’s value overall (Sheeler, 2016). The skills, knowledge, and experience that Dough Pizza employees have acquired over the course of their work at the organization are irreplaceable and, therefore, should be counted as contributors to the organization’s success. Due to the decision that selling Dough Pizza is not viable, the workers can also be used as a strength in the marketing efforts of the company. Similar to the idea of using real Dough Pizza clients for the marketing campaign, it also possible to use the restaurant’s workers as representatives of quality and the preservation of traditions.

Changing the Nature of the Business

As a pizzeria restaurant, Dough Pizza has limited opportunities when it comes to engaging in a complete change of the business. However, in terms of introducing new products, it is possible to diversify the selection of dishes. On the one hand, it is possible to stay true to Italian cuisine and broaden the menu by including only Italian foods, which presents an opportunity for new marketing. In this scenario, the focus can be placed on the authenticity of Italian cuisine and the preservation of traditions inherent to it.

On the other hand, Dough Pizza can undergo a rebranding in order to expand the range of foods from different parts of the world. For instance, pizza and sushi are a popular combination, because these foods are very popular among customers and the convenience of ordering them in one place can attract new clients (Kincaid, 2017). Another alternative is offering more baked goods, such as bagels and croissants, and focus on the fact that the restaurant serves many dishes that include dough. In this case, it is recommended for Dough Pizza to change its name to ‘Dough’ and implement a marketing campaign to attract customers. Overall, it is advised not to sell the restaurant and use any opportunity to extend its profitability.

References

Kincaid, E. (2017). Web.

Sheeler, C. (2016). Equity value enhancement: A tool to leverage human and financial capital while managing risks. Hoboken, NJ: John Wiley & Sons.

Wagner, E. (2014). Forbes. Web.

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IvyPanda. 2021. "Dough Pizza Company's Decline Phase Planning." July 11, 2021. https://ivypanda.com/essays/dough-pizza-companys-decline-phase-planning/.

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IvyPanda. (2021) 'Dough Pizza Company's Decline Phase Planning'. 11 July.

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