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Pizza is among the most favored meals in the United States. It is worth noting though that pizzas are sold all over the world very successfully. People like pizza for its taste and the opportunity to have it delivered already cooked considerably quickly. The combination of all these characteristics makes pizza businesses very successful. Papa John’s Pizza, as one of the top four brands in the world’s market of pizza producers, has a strong position on it, but the issues are still present. Considering the situation at Papa John’s Pizza, the paper aims at exploring the current issues, the strategic intent of the company, its difference from the rivals, conducting SWOT analysis, and proposing the alternative course of action.
Currently, Papa John’s Pizza shows good performance, assessing the increasing revenues year per year ($1,439 million in 2013). The company opens new company-owned and franchised units domestically and abroad every year (82 and 183 respectively). The market share grows as well. The competitive standing of the company has remained stable since competitors such as Pizza Hut, Domino’s, and Little Caesar did not implement radical changes to the business processes, so they did not get a competitive advantage. The company has the reputation of the socially responsible company that supports different social programs for children, for example.
The challenges faced by Papa John’s Pizza are not critical but still considerably noticeable. They are increasing rivalry, the changing trends in the awareness of customers regarding the healthiness of the ingredients, changes in the technologies used in the industry, and the unclear economic situation on several markets where the company is present. The combination of these issues had led to the negative dynamics of revenue growth.
The strategic intent of the company is to build a very strong brand loyalty in the industry of pizza production. The reasoning of such a strategic intent is simple if to think about the peculiarity of pizza market. The product of all brands is rather similar in its concept, and it differs in details only, so to gain and keep customers, the brand has to propose an appropriate atmosphere and environment to them.
Difference from the Rivals
Papa John’s Pizza is different from the rivals because of its approach to the customers’ satisfaction assurance. The company uses the Quality Control Centers to assure the standard (the best) quality of the products sold under its brand regardless of location. Domino’s, as the major competitor, has a greater number of outlets and franchises more units than Papa John’s Pizza does, having larger total sales and total revenues. However, the focus of Domino’s on the sales generation was on the delivery of pizzas.
Strengths of the company are in its focus on the customer satisfaction through providing the highest quality of the products. The loyal franchising policy has also provided Papa John’s Pizza with a competitive advantage.
Papa John’s Pizza has no apparent weaknesses except for, perhaps, a certain influence of the unstable markets’ situation on the company’s sales and revenue. However, the company is still not at the first position in the top four of the major pizza brands, so certain issues are present.
As for the opportunities, the company should focus on the use of new technologies that would provide it with a competitive advantage. One of such opportunities could be the use of the advancements in drones’ design and manufacturing costs. Pizzas delivered by drones can become a buzz factor for the hesitating customers.
The threats are the new potential competitors entering the market and the growing interest of pizza consumers to the healthier food. It would require from Papa John’s Pizza new products to develop and grant their cost effectiveness.
Alternative Courses of Action
Papa John’s Pizza should develop an alternative approach to the process of pizza delivery. Currently, the delivery drivers have a dangerous job to perform. It adds expenses for delivery services. The potential of pizza delivery using drones is tremendous. Such an approach has the following advantages: the image of the technologically advanced company; the environment friendliness of the company; and cost effectiveness considering the cut of expenses for the delivery drivers.
There are some disadvantages as well. They are as follows: the complexity of the new technology; potential theft of equipment; issues at the first stage of implementation due to the unusualness of the delivery method; and lack of the offers on the current market that would provide professional solutions for solving such a complex task
Summing, the paper explored the current issues of Papa John’s Pizza, its strategic intent, the difference between rivals, and conducted SWOT analysis as well as proposed the alternative course of action. Despite the challenges Papa John’s Pizza currently has, the potential of the company to expand in the foreign markets and develop as the pizza producer is still substantial. The company should implement more innovative methods of pizza (and other products offered by the company) delivery to gain a competitive advantage.
In addition, these methods should be cost effective and technologically advanced. Considering the trends and successes in the area of unmanned aircrafts usage for various purposes, it can be a potentially advantageous idea to use drones for pizza delivery.