Competitor Analysis

Competitor analysis is essential to the company, because it can help the company to obtain

important information from competitor and with this information it can forecast competitors’

strategic actions. This analysis also enables the company to identify opportunities and threats.

Every organisation operates within a given environment. An organisations task environment

comprises other organisations or various groups that can affect an organisation

(Schermerhorn et al. 2011).

Domino’s has many small and large competitors but its major chain competitors are Pizza

Hut, Papa John’s and Little Caesars.

Market shares of leading pizza companies according to sales are shown below.

Market Commonality and Resource Similarity

Market Commonality is the number of markets with which the firm and a competitor are

jointly involved and the degree of importance of the individual markets to each. Dominos,

Pizza Hut, Papa Johns, and Little Caeser compete against each other in multiple global fast-

food markets. Whereas, resource similarity refers to how comparable the firm’s tangible and

intangible resources are to a competitor’s in terms of both types and amounts. Firms with

similar types and amounts of resources are likely to have similar strengths, similar

weaknesses, and use similar strategies.

The rivalry between dominos and its competitors demonstrates these expectations in the fast

food business. These firms are using the integrated cost leadership/differentiation strategy to

offer relatively better cost pizzas some differentiated features, such as services. But again,

most of the services provided by all the Domino’s competitors are same. For example,

delivery services, variety of menus and better dine in services.

Pizza Hut:

Pizza Hut is Domino’s foremost competitor with over 13, 000 stores and market presence in

about 95 countries of the world. It concentrates on ready-to-eat pizzas with customisable

variety of toppings offered according to local tastes and culture. It offers a variety of products

such as chicken wings, sandwiches, pasta and specialty pizzas. The firm is the leading quick-

serve pizza company consistently ranking among the top 100 Best Global Brands on

Interbrand (Hitt, Duaneireland & Hoskisson 2011, p. 106).

There is a high market commonality between Dominos and Pizza Hut. Dominos is an direct

competitor of Pizza Hut because the services provided by both pizza providers is the same

where providing variety of Pizza according to customer preferences, which they fulfil the

definition of market commonality. Furthermore, the degree of resources similarity between

Dominos and Pizza Hut is high because are the companies having almost same resources in

terms of their structure, focus, and features that customer’s find attractive. Pizza Hut is even

more focused on health conscious people by incorporating a salad bar into their sit down

restaurant section and by serving nutritional pasta bowls. They also have an extremely strong

brand image and compete with Domino’s for brand recognition.

Papa John’s

Papa John’s is third largest pizza restaurant in the world with a total of 3, 646 restaurants

around the world. It offers a wide variety of products and has a market share of 5.67 percent

in the United States. To recover low sales in 2009, Papa John’s has invested heavily in

advertising for example, sponsoring the NFL (National Football League) (Annual Report

2010).

The market commonality between Papa John’s and Dominos is high, where both targeting at

a similar group of customers with similar products. The products offering of Papa John’s are

similar to Dominos because they both offer a wide range of Pizzas to serve the different

consumer needs. However, Papa John’s embracing customizable pizza concepts as consumers

demand the freedom to add as many as toppings of their choosing for a set price. When

Dominos have focused on delivering faster to customers, Papa John’s is focusing on

delivering great quality items.

Besides, the degree of resources similarity between Dominos and Papa John’s is reasonably

high. However, Papa John’s have differentiated itself as a brand that offers quality pizza at

premium prices. The premium position has garnered the company favourable profit margins

by avoiding deep discounts on menu items, whereas Dominos always providing huge

discounts on their pizza.

Little Caesar’s

Little Caesar’s is the fourth largest pizza company in the world with more than 2,600

restaurant around the world. It offers a variety of pizzas and specialty items such as churros,

Caesar dips and cheese bread. Little Caesar’s lacks a delivery service and it is a major

competitor for Domino’s. The firm is known for its quality pizzas and has topped many pizza

value rankings for many years in a row (Hitt, Duaneireland & Hoskisson 2011, p. 108).

There is a high market commonality and moderate resource similarity. As Dominos, Little

Ceasers also targeting same group of customers but only the group who love to dine in.

However, it also has same lunchtime and dinner crowds. Despite not having delivery, Little

Caesars was arguably the most convenient of the group because of its superb speed and

price point.

As a conclusion, it could be conclude that Pizza hut, dominos, Papa John’s and Little Ceasers

would fit into definition of direct competitors, where the companies going after similar

customers with more similar competitive resources.