Dominos Pizza Porter’s 5 Five Forces (2021)



Domino’s Company Overview:


Domino’s Pizza, Inc. (Domino’s) is one of the largest pizza restaurant chains in the world founded by Tom Monaghan and is located in Ann Arbor, Michigan. It was incorporated in 1960. The company has become an international brand for its famous pizzas with about 10,000 stores globally. In 2020, Domino’s Pizza had announced it would be splitting up into two separate companies; one company will focus on its international business and the other company focuses on its domestic business. This is done in order for both businesses to operate more efficiently and increase the company’s value. This will also allow management to make better decisions and focus on how they can improve their business, instead of making decisions that may not necessarily benefit them. As far as Domino’s growth in 2021, the company continued its expansion into new markets such as India and China where more than 70 percent of the population does not dine out as often as those in the United States and Europe. Domino’s also continued to focus its energy on delivering the best-tasting, highest quality pizza through innovative products such as hot cheese crust and pan pizza.




Domino’s Competitive Rivalry:



Domino’s competitive rivalry is high because there are thousands of restaurants that can be compared to their pizza. Domino’s major competitors in the pizza industry include Little Caesars Pizza, Pizza Hut, Papa John’s Pizza, and Cici’s Pizza. In general, these competitors offer a similar product with some variations on toppings, crusts, or sauces. Domino’s also competes against other types of restaurants that may offer pizza as an additional menu item.




Domino’s Pizza Bargaining Power of Suppliers:



Dominos has high bargaining power over suppliers because they are a very large company. This gives them the ability to demand lower prices from their suppliers and negotiate better deals. Dominos also has the ability to switch suppliers easily if they are not happy with the quality or pricing of the products they are receiving.




Domino’s Bargaining Power Buyers:


Domino’s has a high bargaining power of buyers because there are many other pizza restaurants that they can go to if they are not happy with the products or service that Dominos provides. In addition, Domino’s offers a variety of pizza products that buyers can choose from which gives them more leverage when negotiating prices.



Domino’s Threat of New Entrants:



The threat of new entrants is low for Dominos because the pizza industry is very competitive and it is difficult to differentiate one’s product from the others. There are many barriers to entry such as the need to have a physical location, the requirement to have a kitchen, and the expense of marketing and advertising. Additionally, Dominos has a strong brand name that is well-known to consumers.



Domino’s Threat of Substitutes:


The threat of substitutes is high for Dominos because there are many other types of food that can be eaten instead of pizza. In addition, there are many other pizza restaurants that offer similar products. This gives buyers the ability to easily switch to a competitor if they are not happy with the products or service that Dominos provides.



Dominos Pizza Porter’s 5 Forces Conclusion:



Domino’s has a very stronghold in the market and has many loyal customers who would refuse to switch over to a new store. The main reason is that the pizza market is fairly saturated and there are many options for pizza that would easily allow new competitors to come into the market.



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