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In December 2000, Domino's entered into an agreement with IOC to provide food products at the latter's 7,500 outlets across the country. In early 2001, Pavan Bhatia signed an agreement with Steve Forte, CEO, Jet Airways, to launch their 'ultimate deep dish,' and 'sweetie pie' products on Jet Airways flights. Pavan Bhatia said, "For Domino's, sky is the limit. We like to deliver hot, fresh pizzas everywhere, anytime. This tie-up with Jet Airways takes our commitment to customers on the move even a step further."
Pizza Hut's Expansion StrategyPizza Hut entered India in June 1996 with its first outlet in Delhi. Initially, the company operated company-owned outlets. However, keeping in line with its worldwide policy where Pizza Hut was gradually making a shift from company-owned restaurants to franchisee owned restaurants, Pizza Hut made the shift in India too. This policy helped the company to reduce the huge costs in setting up new outlets. Pizza Hut had four company-owned franchisees – Universal Restaurants Pvt. Ltd. (Delhi, Uttar Pradesh and Rajasthan), Specialty Restaurants Pvt. Ltd. (Punjab), Dolsel Corporation (Gujarat, Karnataka and Andhra Pradesh), Pizzeria Fast Food Pvt. Ltd. (Pune and Tamilnadu) and Wybridge Holdings (Mumbai). |
By March 2001, Pizza Hut had 20 outlets. In the same month, Pizza Hut announced its plan of opening 30 more outlets in India by 2001 end, through franchisee route. By March 2001, Pizza Hut had 13,000 outlets across 90 countries.
Domino's officials felt that there was nothing wrong with increasing the number of outlets. Hari Bhartia said, "We needed to grow to effectively utilize the expensive back-end infrastructure (like distribution centres) that we had set up by March last year (1999)." However, analysts felt that the growth had taken place on a business model that was not able to support it. Unlike other fast-food chains, Domino's operated on company-owned outlets basis, rather than franchisee route or a mix of both. (Refer Box for Pizza Hut's expansion strategy) Domino's officials argued that this ensured quality and the ability to deliver on time, as the company promised.
Case Code : BSTR014
Themes: MNCs in India
Case Length : 9 Pages
Period : 2001
Organization : Dominos Pizza India
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Food, Beverages & Tobacco
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