How Dominos Destroyed Pizza Hut 🔥 | Dominos Vs Pizza Hut | Dominos Case Study


We all felt the same till today that, India's most profitable fast food chain is Either McDonald's or KFC. But the truth is, That most profitable fast food chain of India is Domino's actually.

 McDonald's, who prepares a burger in 3 mins, And KFC, which is finger licking good already. Then too these guys aren't even nearby to the profitability of Domino's. Then question rises here is that, How the hell did Domino's did all of this? And what are those business strategies being used by Domino's? To beat brands like KFC & McDonald's. In June 1996, Jubilant FoodWorks, which is master franchise of Domino's, Opened first store of Domino's in India. And today there are 1300+ stores of Domino's in India among 282 cities. In fact in this pandemic, Where even brands like McDonald's, KFC & Pizza Hut were facing losses. In the same pandemic, Jubilant FoodWorks made a profit of Rs.309 crores. And due to this only, Stock of Jubilant FoodWorks got doubled in last one year. That means it gave returns of 100% to all of it's investors. One year ago, the stock which was on 2200 Rs is now being traded on 4500 Rs today. Despite pandemic, How was domino's able to do all these things? So, Domino's identified 3 such things in Indian market which are subliminal. i.e, the things which happen but isn't easily visible to everyone. First thing. The power of hierarchy of needs. Understand this very carefully. According to Abraham Maslow, We humans have 5 types of needs. Our first is, Physiological needs. i.e, food, clothes & shelter. Our second need is, Our safety needs. i.e, we need some amount of security/safety in our life. Phycological needs are there as our third need. After that, we have our fourth need. Our need of self esteem. All of us need to feel good regarding ourselves. And fifth need is the need of self actualization. i.e, in this stage you have achieved everything that you want to do in your life. And now you want to discover your inner self. So, these were the needs in a human being discovered by Maslow. Now, how did Domino's used this? All of us jump on our second need only when our first need is fulfilled. i.e, If your physiological needs aren't satisfied & you don't have food, clothes & shelter Then, what will you do with the security & self esteem. Similarly, first we fulfil our physiological needs then move on to other needs. Domino's identified that, Whenever anyone orders food, then the primary need is of hunger. And we try to fulfil this need of hunger as soon as possible. That's why, Domino's focused only on their delivery. And on the same side, Other restaurants like McDonald's, KFC, Pizza Hut focused on our third need i.e, phycological need. That all of us need a good customer experience whenever we are eating food. You will find fabulous interiors & serving staffs on the outlets of Pizza hut. All these things seems good too much, But this isn't the most urgent & most important need of any human.

Now if we look on today's date, Then delivery is being done by all the restaurants due to Swiggy & Zomato. Then, why Domino's is able to provide a guarantee for 30 mins & free. Answer to this is hidden in the second strategy of Domino's. You will find lots of start up case studies on our channel. But what about your career? Do you know that if you are component, Then 90% well funded start ups will provide you opportunities which you won't be getting in great MNC's. 

 second strategy of Domino's is that, Lead consumption appetite. What does this mean? In simple words, Till the time you are not having the capacity to fulfil the demands of customer, Till then don't spend money on marketing. Why like this? Because look through marketing you will generate leads, Demand will be generated in the market but because you are unable to fulfil that demand, So the same customer will be taken by your competitor by fulfilling the demands. Domino's mainly did two things to make possible the delivery in 30 mins. First thing, Outlet clustering. If you notice, then you will find at least one outlet of Domino's in every 3-5 kilometers. But These outlets aren't opened randomly. Before opening them, two things are being analyzed very strongly. First thing is disposable income. Wherever then want to open an outlet, They check the disposable income of people living in the radius of 3-5 kms. i.e, do they have this much money that they can eat Pizza or not? Because when people don't have money to eat Pizza then what's the use of opening an outlet there. And second thing. Route load. They check how much traffic is used to be on an average on every route in that area. If routes have more traffic then shortcut routes are being found out. Through which they will be able to provide delivery in 30 mins. Only after analyzing critically these two points, Domino's open any store in that particular area. But still, traffic is a uncontrollable thing. Domino's can't control it. So to tackle that what Domino's do is, Domino's make sure that there is a buffer time of 18-20 min in between cooking & delivery time. i.e, pizza is being cooked & dispatched for delivery from Domino's outlet in 10 mins itself. Now how all these things happen so quickly? So Domino's mainly did two things for this speed. Very first, Step elimination. As Domino's is a QSR then there must be standard procedure for everything. But the real speed of Domino's is being achieved by eliminating cooking steps. How does this happen? So, if you see then all the raw materials imported to Domino's is either pre-cooked or ready to cook. Even the dough received to make pizza is delivered totally ready to the outlets. That's why now the staff of Domino's only need to spread it, put sauce, toppings & cheese on it and keep it in the oven belt. Due to which, pizza is being cooked in just 10 mins. But standard operating procedures, menu engineering, inventory managing & even awesome marketing All these things were done by McDonald's, KFC and Pizza hut too. But then why these guys are in losses? And despite pandemic, how domino's is such profitable? So answer to this is in the third strategy of Domino's. Which is Cost leadership. Now see. There are two types of cost. One is which organization needs to bear, And other is the one which customer needs to bear when they purchase the product. As Domino's focus on their delivery, So 95% of their outlets are opened at very small places. Due to which their expenses on rent, electricity & staff are very minimal. That's why you will get Domino's in even Tier 2 & 3 cities. But you won't get McDonald's, KFC & Pizza Hut there Because their operational cost is very much than Domino's. As Domino's is having less operational cost, they are able to offer pizza at low cost to people. And when people get pizza's at low cost from Domino's so they prefer to buy from them only. And as I told you in the start, That Domino's focus on the prime need of customers i.e, hunger. So that's why pizza of the range of 40-45 Rs is more stomach filling then the same range of burger. And only this thing force customers to buy products only from Domino's. Now the most important, What are those business lessons which we can learnt from this case study & implement in our business. First lesson. Look for paying magic. In your business, find a thing for which customer will pay money anyhow. And put your primary focus on it. Just like Domino's did. They saw that the prime need of customer is hunger. And to finish hunger, customer is willing to pay anyhow. Second lesson. Systems & processes before marketing. Always look carefully that your system & processes are on point. Because the business is stood on the base of systems & processes. After that focus on marketing. Because if your systems & processes aren't on point then can't do anything by marketing. As by marketing you will be generating leads & that lead too will be taken by your competitor. Now, third & most important business lesson. Create a greedy proposition. Look in your business that can you create a greedy proposition in it.

 Just like Domino's created. 30 minutes or free. This is such a greedy proposition which force customers to look out for. That let's see by ordering once as if it's not in 30 mins then we will get it for free. Likewise, you look into your business that can you create a greedy proposition in your business. Because this will provide you customers for long term & they customers won't leave your back. Only & only due to your greedy proposition. And even if you want to create a successful career of yours in any of India's awesome start ups.

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