Friday, February 08, 2013

The company’s India operations

Global President and CEO, Domino’s Pizza,8 talks to b&e’s angshuman paul about the various peculiarities that personify the company’s India operations

B&E: Pizza Hut (from Yum! Brands) presumably has an edge over Domino’s with its sit & dine arrangements. During 2008, Domino’s also started paying heed to the sit & dine category. Was it the perceived threat from Pizza Hut that propelled Domino’s to enter this category after so many years?
Doyle: I can’t comment on any other players. I know our organization well and I can say that yes, in certain cities, we felt that we should have a sit & dine category; that was the reason we opened our restaurant. But we haven’t compromised and moved away from our home delivery competence and the 30 minutes delivery promise – and that’s the very reason you will see that our restaurants are not purely into sit & dine as these are all self service restaurants.

B&E: All your stores are franchised! Simply put, isn’t it difficult to manage so many franchised stores?
Doyle: No, not really. For half a century, we have been growing on the franchise model. The efforts of franchisees and team members have helped us to conquer very big markets. For, instance, consider our teams in India and Louisiana. These are two of the largest and best franchisee organizations in our system, and it’s appropriate that they are sharing in this distinction. Our franchisees will help us to achieve one goal and that is, we want to clip the ribbon on our 10,000th store within the first half of this decade.

B&E: The Indian QSR market has proved that economical pricing can do wonders for sales. McDonald’s has been thriving on this philosophy and has always resorted to ‘easy on the pocket pricing’. But in the case of Domino’s, we have seen that kind of philosophy only during the last two years. Haven’t you start too late?
Doyle: It was the popularity of the brand Domino’s that forced us to take the brand to a larger market [and therefore to economically price the products]. And then, even before we could come out with low priced pizzas, we had to do considerable changes to our supply chain and other such mechanisms so that we could give our consumers economical yet quality driven products. During the initial years, it was simply not possible for us to pursue such options.

B&E: United States is your biggest market. Which one is next? Can the Indian market ever become bigger than the United States market?
Doyle: After the United States market, United Kingdom should be our largest market and contributes close to 10% to our annual revenues. The UK and Mexico markets taken together have in total about 600 stores, while the next is Australia, which has 500. However, as I mentioned, India – and to a large extent Asia Pacific – is emerging as a big market for us now. In total, we have about 1,600 stores in A-Pac, which makes up 16% of our total stores. In some ways, Mexico is as price sensitive as India, and if we have been able to do well in Mexico, I am sure we can do the same in India too.
 

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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