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How Domino’s Pizza Reinvented Itself

• Bill Taylor

And moved its share price from $8.76 to over $160.

I spent the last 18 months researching and writing a book on how organizations and leaders can do extraordinary things, even if they operate in pretty ordinary fields. You don’t have to be a programmer in Silicon Valley or a gene splicer in biotech to unleash exciting innovations and create huge value. Instead, you can rethink what it means to be in the retail-banking business, or the industrial-distribution business, or the office-cleaning business. Yet little did I know that some of the most extraordinary innovations I’ve seen would take place in the pizza business.

• Bill Taylor  is the cofounder of Fast Company  and the author, most recently, of  Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways .   Learn more at williamctaylor.com.

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The Domino’s effect

Change is the only constant.

Copper Consultancy has launched its revitalised change management offer. In this blog, we take a look at what change management is and how it has been successfully implemented outside the built environment industry. 

Organisations are constantly changing. Whether you’re adapting ways of working to address modern challenges , such as climate change and digitalisation, or improving stakeholder engagement methods to become more efficient.

The principles of change management are widely accepted within the practice, however each change programme is unique. Therefore, the implementation is a constant evolution.

To maximise benefits of change initiatives, it is crucial to always learn from change theory and industry best practice. That’s why, nearly one year on from the original launch, we have refreshed our change management offer.  

In our renewed offer, we consider:  

• change theory from the likes of John Kotter and Prosci
• our own experiences in undertaking change projects
• even Domino’s Pizza

These learnings have all been fed into our renewed C:change offer. So, our offer is built on the key principle that, to create lasting change, you must build with people, not for them.  

Regardless of sector, change management is largely about using techniques to teach and alter behaviours and practices. For example, transitioning an organisation to a new IT system requires employees to buy into the benefits of the new system. So, to successfully implement a new stakeholder engagement process requires senior management to prove their genuine advocacy of the scheme – often through their behaviour.  

What is change management?  

Firstly, what are we talking about when we say “change management”?   

To Copper, change management is the process of planning for and rolling out an initiative or programme. This could include developing something that you already have in place, such as improving stakeholder engagement processes or introducing something entirely new to your team or business.  

Ultimately, this initiative or programme will cause employees and those affected by the change to do something differently. This could range from changing behaviour to operational job changes.  

In fact, to prove how universal change is, we have explored a fascinating change campaign that took place in the food and drink industry.  

Case study: Domino’s Pizza  

Back in 2008, Domino’s was struggling to stay relevant and maintain its brand reputation. By implementing a successful change management programme, the company started to turn around.  

Uncovering the change  

Having the foresight to address change in customer behaviour differentiates businesses from their competitors. Therefore, identifying a change that is happening in the industry then adapting to benefit from it, is arguably the most important step in the process.  

Through market research and analysis, Domino’s identified that more orders were being completed online. Not only were management convinced to focus business development on enhancing the online-ordering experience. But, this change in direction was due to market research and being in-tune with changes happening in the wider industry, taking into account trends.  

Proving the power of senior buy-in  

Meanwhile, the enthusiasm and support for digitalising their ordering system was filtering from the top down through the entire business. Once momentum was built and excitement spread through the business, Domino’s was able to implement new technology. This helped to support the shift to online ordering.  

Indeed, this demonstrates the importance of gaining backing from senior teams in driving change forward. Of course, senior buy-in encourages advocates from across the business to collaborate, champion and grow the new initiative. This helps in creating a snowball effect of positive support. In fact it even inspires innovation and lets stakeholders feel like change is being done with them, not to them.  

Using data to drive change  

Finally, the company leveraged customer data collected through their ordering system which helped them develop customer loyalty programs that continued to increase sales.   

Utilising data to your advantage increases the chances of a successful change initiative. Copper’s bespoke data tool Communify Insight enables us to use real-time insight in order to identify key issues, questions and challenges to develop highly targeted narratives and communication channels for stakeholders who are impacted by the change.  

Change and beyond  

Notably, Domino’s is still embracing change to this day; it has recently tested drone and robot delivery and is partnering with Ford on self-driving delivery options.  

Keeping your brand and business offer aligned with changing customer needs and priorities is a common challenge that many businesses face. Copper’s work as a part of the Towns Fund Delivery Partner taught towns how to leverage branding to create a lasting legacy through the changes that the project lifecycle brings and beyond.  

In conclusion, some of the key considerations for implementing successful change are:  

• Identifying and taking advantage of any changes happening within your organisation or wider industry  
• Gaining buy-in from senior teams and advocates across the business  
• Using data to enhance your change initiative  

In fact, perhaps the built environment needs to take a slice of knowledge from Domino’s pizza. Ultimately, in every industry, successful organisations constantly evolve and redefine business models. But change requires careful communication and management.  

If you have a change happening at your business, contact Ronan Cloud , Director of Economic Development at Copper to discuss how we can help you.  

Click here to find out more about Copper’s change management offer, C:change.  

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Domino’s is not a pizza delivery company. What it is then?

Today Domino’s story is a fairy tale of Digital Transformation in the 21st century. But it was not always the case. I remember as a kid, outing for pizza was an event and an opportunity to celebrate with family and friends. We always had a discussion on where to go (I am a 90s kid and there was no home delivery system back then) to eat pizza.

The only choice we had was either Pizza Hut or Domino’s. Pizza Hut was always the winner. Why? Pizza Hut used to give experience and ambiance at the restaurant that Domino’s could not.

Domino’s were boring counters with just a couple of tables and self-service. Whereas Pizza Hut used to give a premium feeling and make my pizza eating experience more special. That’s why we never minded giving Pizza Hut some extra bucks for this premium pricing. How does premium pricing work is a topic for some other time? (Remember technology or digital transformation of services was not of that prime consideration)

Fast forward to 2020, Domino’s has clocked in annual revenue of $14 billion in FY2019 through its 17,020 restaurants across the world. The 11% YoY growth helped the company to gain a net income of $400Mn. Whereas Pizza Hut’s largest franchisee in the US, NPC, has filed for Chapter 11 bankruptcy on 1st July 2020 .

Here are some more jaw-dropping facts about Domino’s:

• Had you invested $1000 in Domino’s in 2004 (the year it went public), the investment would have been worth $58,000 today (surprisingly the return is more than that of Google Apple, Amazon, and Netflix)
• The increase in same-store sales has never been below 4% and frequently been above 10%.
• Globally Domino’s opened an average of >3 stores per day in 2019.

But perception of Domino’s brand was something different back in 2009. Some of the customer feedback Domino’s received:

Domino’s crust tastes like cardboard. The sauce tastes like ketchup. This is an imitation of pizza.

Led by J. Patrick Doyle , Domino’s turned things around by first acknowledging that its pizza sucked. Domino’s launched a campaign “Oh yes we did”. Domino’s then spokesperson Chris Brandon said “Our ‘Oh Yes We Did’ campaign only shows consumers that we have indeed been hearing what they have to say — but it also shows them how we have done so.” They also released a video with their employees reading negative comments out loud. Here is the video for you:

Patrick Doyle has led a remarkable transformation of Domino’s Pizza. His impact on the food, the technology, the operations, and the international expansion of this brand has been game-changing. Cheryl Bachelder, former CEO of Popeyes Louisiana Kitchen.

So what did Patrick do? He pursued a multi-pronged strategy mainly relying on digital transformation:

• Domino’s got rid of their 49 years old recipe. Now they included delicious garlic, buttery crust, and added a category “Specialty Pizza” consisting of lightly breaded chicken topped with cheese and exotic toppings such as bacon and jalapeno.
• The real change came with the digital transformation of the supply chain. This step completely changed the brand perception of Domino’s from a pizza delivery company to a technology company.

Digital Transformation journey of Domino’s

Domino’s invested heavily in digital capabilities. However, in order to execute on these digital innovations, Domino’s first built rock-solid IT capabilities that could allow the company to internally develop these new digital innovations. It could now provide its services in technologically advanced ways that people could only dream of in 2009.

The innovations have been effective as they are closely aligned with the company’s franchise business model. Let’s have a glimpse of its digital journey:

• 2008: Domino’s launched its “ Pizza Tracker “ technology to keep customers updated on the progress of their order. The technology allows Domino’s to extend its centralized services such as supply chain management and IT to its franchisees, thus simplifying the franchise’s operations and improve cost management.
• 2011: Domino’s launched its iPhone application, allowing customers to order on the go. The mobile-first approach worked exceptionally well for the brand. Mobile ordering quickly became the dominant ordering channel.
• 2015: Domino’s launched Anyware that allows customers to order from anywhere and anytime through a device. Customers can order from a plethora of devices including Amazon Echo, Google Home, Siri, Smartwatches, Smart TVs, Slack, Facebook Messenger, Twitter, and more.
• 2016: Domino’s shocked the world with first ever Drone delivery of pizza in New Zealand. (It was a Peri-Peri Chicken Pizza and a Chicken and Cranberry Pizza 🙂 )
• In June’20 Domino’s launched “ Domino’s Carside Delivery service ” as its way to fight against COVID but through digital transformation in its carryout method . Customers have now an option in application or website to choose Domino’s Carside delivery. Customers now have an option to stay in the vehicle while their order will be delivered at any location of the vehicle of their preference. Be it back seat or trunk. Making the entire process contactless, convenient, and safe.

Fun Fact: Domino’s has dared to open stores in Pizza inventor ITALY

Do you still have a doubt that Domino’s is a pizza delivery company? Naah.. It’s much more technically advanced than a technology company. Half of its workforce at headquarters is in software and analytics. Domino’s has made pizza ordering practically as easy as breathing. But how did it activate critical enablers of digital transformation ? How did it choreograph and orchestrate the digital transformation (change management)? That’s a story for some another time….

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Domino's pizza inc change management analysis & solution, hbr change management solutions, innovation & entrepreneurship case study | m.s. krishnan, case study description.

After settling a $78-million lawsuit with a St. Louis woman who was struck by one of its drivers, Domino's Pizza decided to eliminate its 30-minute delivery guarantee and transform its business model through innovations in the areas of technology, social architecture, and operations. The company provided consistency of experience for customers by introducing its Pizza Tracker - a web-based application that allowed customers to track their pizza at each stage of the process - standardizing the layout and processes used in each of its stores, and providing more transparency into employee performance. Students are asked to evaluate how Domino's used technology and innovation to improve efficiency, quality, customer relationship management (CRM), and employee relations as well as assess its change management process.

Change Management, Customers, IT, Operations management, Organizational culture, Organizational structure, Social responsibility , Case Study Solution, Term Papers

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What is Change Management Definition & Process? Why transformation efforts fail? What are the Change Management Issues in Domino's Pizza Inc case study?

According to John P. Kotter – Change Management efforts are the major initiatives an organization undertakes to either boost productivity, increase product quality, improve the organizational culture, or reverse the present downward spiral that the company is going through. Sooner or later every organization requires change management efforts because without reinventing itself organization tends to lose out in the competitive market environment. The competitors catch up with it in products and service delivery, disruptors take away the lucrative and niche market positioning, or management ends up sitting on its own laurels thus missing out on the new trends, opportunities and developments in the industry.

What are the John P. Kotter - 8 Steps of Change Management?

Eight Steps of Kotter's Change Management Execution are -

• 1. Establish a Sense of Urgency
• 2. Form a Powerful Guiding Coalition
• 3. Create a Vision
• 4. Communicate the Vision
• 5. Empower Others to Act on the Vision
• 6. Plan for and Create Short Term Wins
• 7. Consolidate Improvements and Produce More Change
• 8. Institutionalize New Approaches

Are Change Management efforts easy to implement? What are the challenges in implementing change management processes?

According to authorlist Change management efforts are absolutely essential for the surviving and thriving of the organization but they are also extremely difficult to implement. Some of the biggest obstacles in implementing change efforts are –

• Change management is often a lengthy, time consuming, and resource consuming process. Managements try to avoid them because they reflect negatively on the short term financial balance sheet of the organization.
• Change management efforts are made when the organization is in dire need and have fewer resources. This creates silos protection mentality within the organization.
• Change efforts are often targeted at making fundamental aspects in the business – operations and culture. Change management disrupts are status quo thus face opposition from both within and outside the organization.
• Change efforts create an environment of uncertainty in the organization that impacts not only the productivity in the organization but also the level of trust in the organization.
• Change efforts are often made by new leaders because they are chosen by board to do so. These leaders often have less trust among the workforce compare to the people with whom they were already working with over the years.

Domino's Pizza Inc SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis

How you can apply Change Management Principles to Domino's Pizza Inc case study?

Leaders can implement Change Management efforts in the organization by following the “Eight Steps Method of Change Management” by John P. Kotter.

Step 1 - Establish a sense of urgency

What are areas that require urgent change management efforts in the “ Domino's Pizza Inc “ case study. Some of the areas that require urgent changes are – organizing sales force to meet competitive realities, building new organizational structure to enter new markets or explore new opportunities. The leader needs to convince the managers that the status quo is far more dangerous than the change efforts.

Step 2 - Form a powerful guiding coalition

As mentioned earlier in the paper, most change efforts are undertaken by new management which has far less trust in the bank compare to the people with whom the organization staff has worked for long period of time. New leaders need to tap in the talent of the existing managers and integrate them in the change management efforts . This will for a powerful guiding coalition that not only understands the urgency of the situation but also has the trust of the employees in the organization. If the team able to explain at the grass roots level what went wrong, why organization need change, and what will be the outcomes of the change efforts then there will be a far more positive sentiment about change efforts among the rank and file.

Step 3 - Create a vision

The most critical role of the leader who is leading the change efforts is – creating and communicating a vision that can have a broader buy-in among employees throughout the organization. The vision should not only talk about broader objectives but also about how every little change can add up to the improvement in the overall organization.

Step 4 - Communicating the vision

Leaders need to use every vehicle to communicate the desired outcomes of the change efforts and how each employee impacted by it can contribute to achieve the desired change. Secondly the communication efforts need to answer a simple question for employees – “What it is in for the them”. If the vision doesn’t provide answer to this question then the change efforts are bound to fail because it won’t have buy-in from the required stakeholders of the organization.

Step 5 -Empower other to act on the vision

Once the vision is set and communicated, change management leadership should empower people at every level to take decisions regarding the change efforts. The empowerment should follow two key principles – it shouldn’t be too structured that it takes away improvisation capabilities of the managers who are working on the fronts. Secondly it shouldn’t be too loosely defined that people at the execution level can take it away from the desired vision and objectives.

Domino's Pizza Inc PESTEL / PEST / STEP & Porter Five Forces Analysis

Step 6 - Plan for and create short term wins

Initially the change efforts will bring more disruption then positive change because it is transforming the status quo. For example new training to increase productivity initially will lead to decrease in level of current productivity because workers are learning new skills and way of doing things. It can demotivate the employees regarding change efforts. To overcome such scenarios the change management leadership should focus on short term wins within the long term transformation. They should carefully craft short term goals, reward employees for achieving short term wins, and provide a comprehensive understanding of how these short term wins fit into the overall vision and objectives of the change management efforts.

Step 7 - Consolidate improvements and produce more change

Short term wins lead to renewed enthusiasm among the employees to implement change efforts. Management should go ahead to put a framework where the improvements made so far are consolidated and more change efforts can be built on the top of the present change efforts.

Step 8 - Institutionalize new approaches

Once the improvements are consolidated, leadership needs to take steps to institutionalize the processes and changes that are made. It needs to stress how the change efforts have delivered success in the desired manner. It should highlight the connection between corporate success and new behaviour. Finally organization management needs to create organizational structure, leadership, and performance plans consistent with the new approach.

Is change management a process or event?

What many leaders and managers at the Pizza Domino's fails to recognize is that – Change Management is a deliberate and detail oriented process rather than an event where the management declares that the changes it needs to make in the organization to thrive. Change management not only impact the operational processes of the organization but also the cultural and integral values of the organization.

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Pizza inn parent rave restaurant group upgrades leadership team, david graves is out as president of pizza hut u.s., how patrick doyle changed domino’s, and the restaurant industry.

Consider these results: Domino’s same-store sales have increased for 28 straight quarters—and those increases in the past few years have never been below 4% and have frequently been above 10%. Domino’s system sales have nearly doubled during Doyle’s tenure, from $3.1 billion in 2009 to $5.9 billion in 2017. The company’s stock, which was trading below $10 a share, is now well above $200.

“Patrick Doyle has led a remarkable transformation of Domino’s Pizza,” says Cheryl Bachelder, former CEO of Popeyes Louisiana Kitchen. “His impact on the food, the technology, the operations and the international expansion of this brand has been game-changing.

“Without a doubt, he is one of the best restaurant CEOs of our time,” she says. 

To observers, Doyle has helped engineer a turnaround without sacrificing unit operators or making compromises, but instead by aggressively building sales around a simple concept: making ordering as easy as possible.

“Patrick Doyle is the epitome of leading with integrity, intellect, collaboration, curiosity, risk-taking and grace,” says Alice Elliot, CEO of The Elliot Group. “To find someone who has ingratiated these values and results over such a long period of time in one organization is incredibly meaningful in its own right.”

Doyle was a longtime Domino’s executive and the chain’s president when he was tapped to be CEO. At the time, Domino’s had made a couple of key changes that would provide the foundation for its ultimate success. The most well-known of these was the change to its pizza recipe in 2009, marked with a candid marketing campaign admitting the previous product wasn’t very good.

The company released a video of employees, including Doyle, reacting to customer feedback, including, “Domino’s crust tastes like cardboard.”

“You can either use negative comments to get you down, or you can use them to excite you and energize your process to make a better pizza,” Doyle said in a video. “We did the latter.”

At the same time, Domino’s shifted to a single point-of-sale system that it owned and operated. The move was controversial, and some franchisees sued the franchisor, wanting to get their own systems, but lost.

The POS enabled Domino’s to quickly add functionality, helping to drive digital orders—which are generally larger and easier to handle—to nearly two-thirds of all transactions. 

Doyle himself pushed for the chain’s mobile app and online orders to be as easy as possible. In 2013, the company launched Pizza Profiles, a seemingly innocuous feature that allowed consumers to save their favorite pizzas in an online profile. Using those profiles, the company worked to make ordering as easy as one click, and then even no clicks. It added ordering anywhere it could—Ford vehicles, the Apple Watch,  TVs, Amazon’s Alexa app, Twitter and Facebook, among others. Domino’s technological prowess and creativity turned it into a sales-generating machine.

“We are the technology disruptors,” Doyle said in February. “We’re making every effort to keep every advantage we worked so hard to build.”

With booming sales, the company convinced operators to remodel locations into a new Pizza Theater layout designed to encourage in-store order pickup—an area of relative weakness. Many operators agreed, successfully driving sales further. Average unit volumes increased to more than $1 million, from $621,000, during the Doyle era.

And then those franchisees began building. After the chain kept its growth to a relative minimum, adding just 150 locations between 2010 and 2014, expansion took off. Domino’s has added 500 locations since, according to Technomic data.

Even now, after the chain surpassed Pizza Hut and Doyle announced he’d step out, the company is looking to expand its business. It has introduced its “hotspots” program, which allows for delivery to nearly 200,000 parks, sports fields and other outdoor locations. It is also testing the use of voice-activated artificial intelligence, similar to Amazon’s Alexa or Google Home, for phone orders.

“I set some goals for myself when I became CEO at the beginning of 2010,” Doyle said in January. “We’ve met those goals. One was to have franchisees in a far better place. Franchisees are doing great. We wanted to be the No. 1 pizza company in the world, and we’ve done that. Check and check.”

It is clear Domino’s has changed consumers’ expectations. Pizza Hut and Papa John’s have worked hard to integrate more technology to keep pace. Even outside the pizza sector, from Outback Steakhouse to McDonald’s, brands have worked to add new ordering capabilities and consumer-facing technologies to drive customer access. It’s no secret they’ve done this while watching Domino’s.

In his eight years as CEO, Patrick Doyle has taken Domino’s to new heights. And he’s taken the restaurant industry along with it. 

See Domino's growth by the numbers.

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Operationalising Change Management for Strategic Initiatives at Domino's Pizza Group Revised Final (1)

2023, OPERATIONALISING CHANGE MANAGEMENT FOR STRATEGIC INITIATIVES AT DOMINO'S PIZZA GROUP

ABSTRACT The operationalisation of change management for strategic initiatives at Domino's Pizza Group is critical in understanding the role of operational and strategic planning in the fast-food industry. The research explores the company's approach to change management, its effectiveness, and lessons for enhancing change practices in strategic initiatives. It employs a deductive research approach, predominantly relying on secondary sources on the background and context of Domino's Pizza Group. It aims to examine the company's current approach to change and compare it with established models in the current literature on change management. It emphasises the relevance of effective change management in driving strategic success. Notably, the study scrutinizes renowned change management models like Kotter's 8-Step Change Model and case studies of change initiatives in the fast-food industry to delineate the best practices in operationalising change management for strategic success. Following this, its philosophy and design inform a comprehensive thematic document analysis of relevant qualitative data in company reports and strategic plans. Further, it synthesizes the company's organisational analysis by identifying previous strategic initiatives and their outcomes to assess the impact of change management on the success of its strategic initiatives. In conclusion, it highlights critical lessons from Domino's Pizza Group’s change management practices and offers areas for improvement. It provides vital recommendations and directions for future research in change management and strategic initiative for an in-depth understanding of effective change management practices in diverse organisational contexts. Keywords: Strategic Initiatives, Change management, continuous improvement, operationalisation

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This paper presents a literature review on change management. Change management has been defined as ‘the process of continually renewing an organisation’s direction, structure, and capabilities to serve the ever-changing needs of external and internal customers (Moran & Brightman 2000). Kanter (1992) contends that we live in a constantly changing world, and change has an impact on the individuals and the organisation as a whole. In this context, organisations have to look into the future to find new advantages. New technologies, new products, new competitors, new regulations, and new people with new values and experience is the order of the modern organisation. Nevertheless, theories and approaches to change management are often conflicting, lacking in empirical evidence and based on unchallenged assumptions about the nature of modern organisational change management. This paper looks at some of the main theories and approaches to organisational change management as an important fir...

Danilsa Garcia Cortes

Leotta Hannele

Strategic Change Management adapted to the Eastman Kodak Company

Chowrimootoo Dany Jean Michel

The piece of work that follows is focused on strategic change management and is broken into four activities of which the first one deals on the understanding of the background to organizational strategic change. The report being discussed applies to the Eastman Kodak Company and activity one concentrates on the models of strategic change and the use of intervention techniques in the change process. The second activity deals with the strategic changes within the Eastman Kodak Company while the third one sees the contribution of stakeholders in the change process. Last but not the least, the last and fourth activity focus on the models that ensure ongoing change.

Slobodan Župljanin

Changes are now a reality faced by all organizations, wherever they were, and no matter which activity dealt with. Changes are only a certain constant in all business activities of today's enterprises. Modern organizations must be empowered to develop specific competencies for quality change management, because only in this way, organizations can improve their business performance and stay "in the game" at all on a turbulent global market. The main research objective of this paper is to demonstrate how change management process can affect the performance improvement of business operations and thus make the company competitive. Competitive advantage is the most important competitive advantage of each company, and its achievement, in terms of global change significantly conditioned by creating appropriate models of change management. This work is, in essence, and deals with issues of organizational change, in response to the changes that come from the environment, or by ...

Financial Risk and Management Reviews

JOANA KWAW-YANKSON

Journal of Organizational Change Management

Michael N Bazigos, PhD

Elizabeth Goodfellow , Jason Mazanov

In this paper we build on Burnes' 2005 review and critique of organisational change approaches and explore more recent developments. Through systematic review of mainstream change and management literature it is demonstrated that the content of individual approaches and the number and scope of change approaches has increased since 2005. The contribution of this paper is to outline the spectrum of change approaches and paradigms that emerged, and to describe a revised research agenda needed to accelerate progress in understanding organisational change.

Alin Jitarel

Organizational change is a fact of life; it involves changes of organizations’ mission, vision and/or processes, with impact at both individual and organization level. Some organizations accept changes if they consider them as necessary and quickly adapt their behaviour in a desire new direction but in most cases changes are considered unnecessary or very difficult and organizations do not adapt to the new context defined by the turbulent environment in which they operates. Considering these, the goal of the present research is to provide an overview on organizational change processes by considering the operation level and different approaches described in the literature. In the first part of the article there will be described how organizations operate and are interconnected based on Morgan's organizational metaphors. This will clarify aspects related to organizations’ behaviour and will point out the advantages and limitations of different actions’ options. In the second part ...

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Domino’s Pizza Case Study: Strategic Management

Domino’s pizza case study analysis: introduction, case study domino’s pizza: competitive challenges, positive market outlook, international market expansion, growing health concerns, margin expansion, great innovation, robust brand name, poor advertising skills, competitive challenge, current strategies, digital platform, direct store ownership, conclusion of domino’s pizza case study, list of references.

Domino’s Pizza is a fast food chain of restaurants that is headquartered in the United States of America, but it has a large network of international branches worldwide (Abc News, 2013, para 5). The firm was established in 1960 by two brothers, Tom Monaghan and James Doyle, following the duo’s successive takeover of Dominicks. The business changed its trade name to Domino’s Pizza, Inc. five years later, in 1965, following a decision arrived by its sole owner Tom Monaghan at the time.

The firm’s first franchise store opened in 1967 in Ypsilanti. This reflected its growth. The first international store opened up in early 1983 in Canada’s Winnipeg area in the Manitoba province. The chain presently has a presence in close to 70 countries across the world. It employs a workforce of more than 145,000. It is considered to be the leading global fast-food chain of restaurants with corporate, as well as franchised stores that exceed the 10,000 marks (Domino’s, 2013, para 1).

Domino’s competes with other numerous fast food chains in the market that include both international and local market players. Domino’s is ranked second in the global market behind another American brand, Pizza Hut that is owned by YUM! Brands. Other established industry players include McDonald’s Corporation and Papa John’s International.

The rival firms have equally expanded their franchise networks and spread throughout the global market. The major competitive challenge has been maintaining lower operational costs in order to sustain higher profitability amidst the poor global economic situation. Consumers’ spending power was reduced significantly as many people considered spending their little disposable income on basic necessities only (Gluyas, 2013, para 2).

Domino’s Pizza Strategy Case Study: External Analysis

Consumer demands are also expected to increase with the overall global economy improving following poor performance in the recent past. According to Morning Star (2013, para. 6), restaurant industry sales in the US are expected to attain the $604 billion mark. This will represent a 3.6% annual growth.

This is critical, particularly coming immediately after a period of economic lull that lasted for about three years (Morning Star, 2013, para 7). The improving economic situation and conditions are enabling customers and potential buyers remain with a significant amount of disposable income that they can eventually spend on luxury products, such as buying and enjoying fast foods with their families and friends.

Domino’s eventual entry in 2010 into the German market has provided it with a great opportunity to enhance its profits and market performance in general.

A Master Franchise Agreement signed between the company and Yakir Gabay, the owner of over 3,000 residential units and a multiple number of hotels, offers a lucrative business opportunity for the restaurant chain. This has seen Domino’s grow to become the leading hotel operator in the entire German market. The growth is also attributed to Yakir’s extensive business network (Morning Star, 2013, para 3).

There has been growing concern among the consumers of fast foods that continued consumption of junk foods puts food users at greater risks health wise.

This situation could see quite a considerable number of potential customers lower their demand for the foods sold at Domino’s. In essence, the company will suffer losses as a result of diminished sales because its main focus is on pizza products (BizLeader, 2013, para 4).

The fast food industry is one of the leading industries globally in terms of high competition. The existing players are well established and pose a great market challenge to each other. New entrants are also flocking the industry (BizLeader, 2013, para 4).

All the players face the challenge of affecting their respective margin expansion as internationalization remains the obvious option to sustain the competition. The firms are spending huge capital amounts to sustain the expansion. This eventually puts the firms at the risk of failing to recoup substantial returns (PR Newswire, 2013, para 3).

Domino’s Pizza Analysis: Internal Factors

Domino’s Pizza is renowned for its ability to study its experiences and make corrective measures to enhance its future market performance. This has enabled the company to increase its innovation ability. This innovative approach led to a timely solution to the cold pizza delivery problem. The firm has also earned itself the tag of being a leading market trend setter. Domino’s main focus is on satisfying customers and achieving better customer experience (Pizza Marketplace.com, 2013, para. 4).

Domino’s Pizza is a strong brand name that is renowned for its pioneering pizza delivery business (PR Newswire, 2013, para 5). This, in turn, influences its power to retain and build loyal customers. It also enables the firm to constantly introduce new products.

For instance, the company has introduced several brands of its food products, including Domino’s Oven Baked Sandwiches, Domino’s BreadBowl Pats, as well as Chocolate Lave Crunch Cakes, among many others over a very short span of time (PR Newswire, 2013, para 6).

Given the goodwill that the brand has managed to build in the market, Domino’s can afford to introduce many products and still benefit from immediate customer acceptance. This reduces the possibility of encountering losses as a result of products taking too long in the market introduction and familiarization phase.

Domino’s committed a blunder in its marketing and advertising strategy when the company informed its consumers that it was able to deliver fresh and hot pizza irrespective of cold weather conditions. The villainous character, “The Noid”, was annoying and fictitious (Montgomery, 2013, para 3). It caused more confusion in the company’s marketing strategy, although it was short-lived.

The situation of the credit markets in the US has been of major concern in limiting Domino’s from achieving maximum market growth in the country. In close to ten years now, Domino’s has not been able to expand its operations in the US market through expanding its network of stores. As Buss (2013, p. 2) notes, only as little as 1,000 new stores are being planned for the US market by the company’s management.

This contrasts heavily with its external market plans that have so far lined up thousands of new stores for opening. The company is continuously reducing its number of stores in the US market. This affects its ability and power to compete in the world’s leading fast food market (Buss, 2013, p. 2).

With the US economy only having emerged from a financial crisis that spread all over the world, there are limited chances that the situation will normalize in the very near future in order to boost the company’s competitive power in the market. Thus, it implies that the single-unit operators within the American market are curtailed from opening up new branches to contain the challenge being posed by other rival firms, such as McDonalds.

It is worth noting that only 10 percent of Domino’s outlets in the US are company-owned, with the remaining 90 percent being franchised-owned (Buss, 2013, p. 1). It is a more challenging fact for Domino’s to fail to expand its market presence within this lucrative market, with the US market being by far the largest pizza market in the whole world (Buss, 2013, p. 1).

Domino’s is currently combining a series of strategies to formulate its major market strategy that has helped in enhancing its market operations and performance. With the advent of information technology, the firm has focused on developing a digital marketing technology that it has integrated with social media to increase interactivity with its mainly youthful clientele.

Additionally, the company is combining this with consistent pricing strategies for its menu as a means of sustaining its sales momentum that it has managed to enjoy for the last few years.

Domino’s has established a mobile-optimized website that is intended for use in making orders online. The firm has also pursued a plan that has eventually seen it introduce both Smartphone, as well as tablet apps intended for use in making orders (Marshall, 2013, para 6).

The Pizza Hero game software that was launched for iPad use underscores the great determination by the company to make use of digital capabilities in enhancing market performance. With the majority of fast food consumers mainly being youthful people, the company is relying on the group’s admiration for IT to attract them and eventually influence its market performance.

The popularity of social media websites, Facebook and Twitter, has also been inculcated into Domino’s market strategy as the company uses these platforms to increase its interactivity with customers. Potential customers are also attracted by the social marketing power upon reading sentiments and recommendations by the company’s long-standing customers. In other words, the company is utilizing the power of social media to reduce its advertising costs as the platform achieves the same results (Speedy, 2013, para 5).

Domino’s Pizza Case Study: Strategic Management Recommendations

Domino’s should consider involving itself directly in owning stores, especially within the lucrative American market. Waiting and hoping that the credit market situation in the country will stabilize in the near future to enable the franchisers the opportunity to borrow funds and expand their outlets is impractical.

Instead, Domino’s should invest part of its capital in opening up company-owned outlets to boost its overall presence in the market. This will give the firm a greater footing, similar to its main rivals.

In case running too many company-owned outlets poses a management challenge for the company, the organization can make arrangements with its individual market partners to hand them the shops. Such an arrangement would see the individual entrepreneurs run and manage the outlets as though they owned them personally, but submitting the resultant profits to the franchiser and receiving quotas from the same.

This will help in spearheading expansion in the market, while also empowering the franchise to grow their businesses. With Domino’s setting the quota-based system on the franchisee’s performance in the market, most of the franchisees will work hard to ensure that the businesses they manage grow bigger.

Domino’s Pizza is a leading global fast-food restaurant chain whose headquarters and foundations are based in the USA, but it has an enlarged network covering over 70 countries. The chain is currently considered as the second-best performing in the market after another American brand Pizza Hut. Domino’s greatest strength is in its innovation skills and capabilities that have seen it emerge as a market pioneer in many instances.

However, it’s advertising and marketing strategies have hampered its market performance following its promise to the market that it would manage to deliver hot and fresh pizza to its clientele during the cold season. Improving the global financial situation, especially after a long-term crisis, is proving to be of benefit to the company as it offers added opportunities for growth. Equally, the international expansion of the company is influencing its overall market performance by expanding the market and increasing sales volume.

The greatest market challenges for the firm are the failure of its US-based franchises to access credit and expand their business operations. This is affecting the overall business performance because the American market is by far the largest globally in as far as pizza sales are concerned.

Thus, any firm must take the American market seriously if it intends to compete effectively. As a remedy, the firm should invest directly in opening up branches in the country and invite franchisees to manage the branches on its behalf, instead of wasting time in waiting for the normalization of the domestic credit market.

Abc News, 2013, Domino’s Pizza® wants select startups, great ideas to be #PoweredByPizza , Web.

BizLeader, 2013, Domino’s Pizza® online ordering is faster than ever with launch of pizza profiles , Web.

Buss, D., 2013, ‘ Domino’s global growth feeds Pizza chain’s rising success ’, Forbes, Web.

Domino’s, 2013, About Pizza , Web.

Gluyas, R., 2013, ‘Meij delivers larger slice of Domino’s pie’, The Australian, Web.

Marshall, R., 2013, ‘ Domino’s Buderim CEO aiming high ‘, Sunshine Coast Daily , Web.

Montgomery, R., 2013, ‘Investors find Domino’s is topping out’, The Australian , Web.

Morning Star, 2013, Pittsburgh Domino’s Pizza franchise owner reaps national accolade , Web.

Pizza Marketplace.com, 2013, Domino’s new store design hits New Orleans market , Web.

PR Newswire, 2013, New Orleans Domino’s Pizza opens first new store design in the West Bank Area , Web.

Speedy, B., 2013, ‘Domino’s lifts profit, eyes expansion into Japan’, The Austrian , Web.

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IvyPanda. (2023, August 24). Domino's Pizza Case Study: Strategic Management. https://ivypanda.com/essays/dominos-pizza-company-analysis/

"Domino's Pizza Case Study: Strategic Management." IvyPanda , 24 Aug. 2023, ivypanda.com/essays/dominos-pizza-company-analysis/.

IvyPanda . (2023) 'Domino's Pizza Case Study: Strategic Management'. 24 August.

IvyPanda . 2023. "Domino's Pizza Case Study: Strategic Management." August 24, 2023. https://ivypanda.com/essays/dominos-pizza-company-analysis/.

1. IvyPanda . "Domino's Pizza Case Study: Strategic Management." August 24, 2023. https://ivypanda.com/essays/dominos-pizza-company-analysis/.

Bibliography

IvyPanda . "Domino's Pizza Case Study: Strategic Management." August 24, 2023. https://ivypanda.com/essays/dominos-pizza-company-analysis/.

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Tech with a Side of Pizza: How Domino's Rose to the Top

• Format: Print
• | Language: English
• | Pages: 28

About The Author

Boris Groysberg

Related work.

• Faculty Research
• Tech with a Side of Pizza: How Domino's Rose to the Top  By: Boris Groysberg, Sarah L. Abbott and Susan Seligson
• Tech with a Side of Pizza: How Domino's Rose to the Top  By: Boris Groysberg, Kerry Herman and Amy Klopfenstein

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Domino's Pizza Inc

By: M.S. Krishnan

After settling a $78-million lawsuit with a St. Louis woman who was struck by one of its drivers, Domino's Pizza decided to eliminate its 30-minute delivery guarantee and transform its business model…

• Length: 16 page(s)
• Publication Date: Aug 28, 2013
• Discipline: Organizational Behavior
• Product #: W93C27-PDF-ENG

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After settling a $78-million lawsuit with a St. Louis woman who was struck by one of its drivers, Domino's Pizza decided to eliminate its 30-minute delivery guarantee and transform its business model through innovations in the areas of technology, social architecture, and operations. The company provided consistency of experience for customers by introducing its Pizza Tracker - a web-based application that allowed customers to track their pizza at each stage of the process - standardizing the layout and processes used in each of its stores, and providing more transparency into employee performance. Students are asked to evaluate how Domino's used technology and innovation to improve efficiency, quality, customer relationship management (CRM), and employee relations as well as assess its change management process.

Learning Objectives

After reading and discussing this case, students should be able to:

1.) Identify the challenges associated with fast food operations in the pizza category.

2.) Explore the critical success factors in the pizza delivery business, and how a company like Domino's can attain these factors.

3.) Analyze how Domino's used technology and innovation to improve efficiency, quality, CRM, and employee relations.

4.) Explore how Domino's change management process was implemented to increase transparency into everything employees at Domino's did, and enabled a positive culture within the organization.

Aug 28, 2013

Discipline:

Organizational Behavior

Geographies:

United States

Industries:

Restaurants and food service industry

WDI Publishing at the University of Michigan

W93C27-PDF-ENG

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 Domino’s Pizza: A Comprehensive Case Study on Management Theories Driving Global Success

 Introduction

Domino’s Pizza, a global leader in the fast-food industry, boasts a captivating journey from its humble beginnings to its present-day global dominance. Founded in 1960 as a small pizzeria in Ypsilanti, Michigan, Domino’s has expanded to thousands of locations across the world. This remarkable rise to prominence is not the result of happenstance; rather, it is a testament to the deliberate and effective application of various management theories and strategies. In this extensive case study, we will explore how Domino’s has harnessed these management theories to achieve and sustain its impressive growth and success.

1. Scientific Management: The Foundations of Domino’s Success

Domino’s Pizza owes a significant portion of its early success to the principles of scientific management, a theory pioneered by Frederick Taylor. Co-founded in 1960 by Tom Monaghan and his brother, James, Domino’s started as DomiNick’s, a small pizzeria in Ypsilanti, Michigan. Tom Monaghan, influenced by Taylor’s efficiency principles, emphasized the importance of systematic processes and precision in pizza preparation and delivery.

Application of Scientific Management Principles:

• Standardized Pizza Production: Domino’s introduced streamlined processes for pizza production to ensure uniformity in taste and quality across all its outlets.
• Delivery Time Guarantee: The company implemented a groundbreaking 30-minute delivery guarantee, emphasizing punctuality and reliability.
• Continuous Process Improvement: Domino’s remained committed to monitoring and refining its operations to enhance efficiency continually.

Impact on Domino’s Success:

– The application of scientific management principles played a pivotal role in Domino’s rapid expansion. By prioritizing efficiency, the company was able to scale its operations and open numerous franchise locations.

– The 30-minute delivery guarantee became a hallmark of Domino’s and a significant selling point, attracting customers seeking fast and dependable pizza delivery.

2. Contingency Theory: Adapting to Changing Markets

As Domino’s continued to grow, it encountered varying market conditions and shifting customer preferences. This necessitated a shift from a one-size-fits-all approach to one that embraced contingency theory. Domino’s demonstrated an impressive ability to adapt to different circumstances and tailor its strategies accordingly.

Adapting to Market Conditions:

• Menu Diversification: Domino’s expanded its menu beyond pizza to include pasta, chicken, sandwiches, and desserts to cater to a broader customer base.
• Online Ordering Revolution: Recognizing the rise of e-commerce, Domino’s made substantial investments in online ordering platforms, ensuring convenience for tech-savvy customers.
• International Expansion: Domino’s ventured into international markets, adjusting its menu to suit local tastes and preferences.

  Impact on Domino’s Success:

– The adoption of contingency theory allowed Domino’s to thrive in diverse markets worldwide. By customizing its offerings and approaches, the company successfully penetrated new territories.

– Menu diversification and technological advancements ensured that Domino’s remained competitive and appealing to a wide range of customers.

 3. Total Quality Management (TQM): Customer Satisfaction as the Driving Force

Total Quality Management (TQM) principles emphasize continuous improvement and unwavering customer satisfaction. Domino’s unwavering commitment to delivering high-quality pizzas and exceptional service aligns closely with these principles.

 Embracing TQM :

• Stringent Quality Control: Domino’s implemented rigorous quality control measures to ensure that every pizza consistently met its high standards.
• Active Customer Feedback Loop: The company actively sought customer feedback and used it as a crucial driver for necessary improvements.
• Employee Training and Engagement: Domino’s invested in employee training to ensure that staff understood the critical role of quality in customer satisfaction.

 Impact on Domino’s Success:

– TQM practices elevated Domino’s reputation for quality and reliability. This unwavering commitment to excellence contributed significantly to customer loyalty and repeat business.

– The emphasis on continuous improvement allowed Domino’s to stay ahead of competitors by consistently enhancing its products and services.

 4. SWOT Analysis: Strategic Decision-Making in Action

Domino’s regularly conducts SWOT (Strengths, Weaknesses, Opportunities, Threats) analyses to assess its position in the market. This strategic tool helps the company make informed decisions and stay competitive.

 Utilizing SWOT Analysis :

• Identifying Strengths: Domino’s recognized its strengths in efficient delivery, a strong brand, and technological innovation.
• Addressing Weaknesses: The company worked diligently to address weaknesses such as inconsistent pizza quality and customer perception.
• Capitalizing on Opportunities: Domino’s seized opportunities in the growing demand for online food delivery and convenience.
• Mitigating Threats: The company developed strategies to counter threats from competitors and market shifts.

– SWOT analysis enabled Domino’s to make data-driven decisions and refine its strategies. By proactively addressing weaknesses and seizing opportunities, the company remained agile and competitive.

 5. Transformational Leadership: J. Patrick Doyle’s Turnaround

In the mid-2010s, Domino’s faced challenges related to product quality and customer perception. It was at this critical juncture that CEO J. Patrick Doyle assumed leadership and implemented transformative leadership strategies.

  Transformational Leadership in Action:

• Rebranding and Transparency: Doyle initiated a marketing campaign acknowledging Domino’s previous pizza quality issues and promising significant improvements.
• Menu Innovation: The company introduced new products, such as the “Artisan” pizza line, to reinvigorate its menu and customer interest.
• Embracing Technology: Domino’s developed the Pizza Tracker, allowing customers to monitor the progress of their orders in real-time.

– J. Patrick Doyle’s transformational leadership successfully revitalized Domino’s brand and image. The company’s honesty about past shortcomings and its commitment to change resonated with customers.

– Menu innovation and technology integration kept Domino’s at the forefront of the industry, appealing to a new generation of consumers.

 6. Digital Marketing and SEO Strategies: Conquering the Online Space

As the digital era reshaped consumer behavior, Domino’s wholeheartedly embraced digital marketing and Search Engine Optimization (SEO) to enhance its online presence. The company’s digital strategies have played a pivotal role in maintaining its competitive edge.

 Digital Marketing Initiatives:

• Social Media Engagement: Domino’s leveraged social media platforms to engage with customers, promote special offers, and build a loyal online community.
• Mobile App Development: The Domino’s app became a cornerstone of its digital strategy, offering users a seamless and convenient ordering experience.
• Online Advertising Prowess: The company invested in targeted online advertising to reach a broader audience and drive online orders.

  SEO for Online Dominance:

• Keyword Optimization: Domino’s strategically optimized its online content with relevant keywords such as “pizza delivery,” “online pizza ordering,” and “fast food delivery.”
• Local SEO Mastery: Domino’s concentrated on local SEO to ensure that its individual store locations appeared prominently in search results.
• User-Friendly Website: The company maintained a user-friendly website with a responsive design, ensuring a seamless experience for customers across devices.

– Domino’s digital marketing and SEO efforts translated into increased online visibility and higher website traffic. These strategies have helped the company maintain its status as an industry leader.

 Conclusion

Domino’s Pizza’s extraordinary success story is a testament to the effective application of various management theories and strategies. From the early embrace of scientific management principles to the dynamic adaptation to changing markets, Domino’s has consistently evolved to meet the shifting demands of the industry and its customers.

The company’s commitment to total quality management, informed decision-making through SWOT analysis, and transformative leadership have contributed to its sustained growth. Moreover, its mastery of digital marketing and SEO strategies have allowed Domino’s to dominate the online space and stay connected with its ever-evolving customer base.

Domino’s Pizza stands as a shining example of how a company, grounded in sound management principles, can not only survive but thrive in a rapidly changing business landscape. As we look to the future, Domino’s remains a case study in effective management strategies that businesses across industries can learn from and aspire to emulate.

With a legacy built on management excellence, Domino’s Pizza continues to serve as an inspiration for businesses worldwide, proving that success is achievable through a combination of visionary leadership, adaptive strategies, and an unwavering commitment to quality and customer satisfaction.

 References

– Ager, S. (2019). How Domino’s Pizza Reinvented Itself to Win in the Digital Age. Retrieved from https://hbswk.hbs.edu/item/how-dominos-pizza-reinvented-itself-to-win-in-the-digital-age

– Domino’s Pizza. (n.d.). About Us. Retrieved from https://www.dominos.com/en/pages/about-us

– Doyle, J. P. (2015). Management Reset: Organizing for Sustainable Effectiveness. Harvard Business Review. Retrieved from https://hbr.org/2015/10/management-reset-organizing-for-sustainable-effectiveness

– Taylor, F. W. (1911). The Principles of Scientific Management. New York, NY: Harper & Brothers.

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Leadership and Change Management at Dominos Pizza

Added on   2020-06-04

About This Document

Strategies and the operations of the Domino's and Pizza-Hut  is  taken into comparison in this report by detailing on it. The impact whether it  is positive or negative is explained. A focus on the internal and the  external factors that impacts Domino's and Pizza-Hut and  the measures  to  minimise the negative impacts are detailed in this report. Barriers  of  change  with the help of force field analysis in process of decision making is  detailed.

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Short Case Study on Change Management

A short case study on change management can be very helpful in learning how to manage change effectively. In today’s business world, change is constantly happening and it can be very difficult to keep up.

Having a solid understanding of change management is essential for any manager or business owner.

A good case study will show you how one company successfully managed a major change and what lessons can be learned from their experience.

By studying short case study on change management, you will gain valuable insights into the importance of planning, communication, and employee involvement when managing change.

You will also learn about the different stages of change and how to overcome resistance to change.

These are all important topics that any manager or business owner should be familiar with. Learning about them through a short case study is an excellent way to gain a better understanding of these concepts.

Here are 05 short case studies on change management that offer you valuable insights on managing change.

1. Adobe- a transformation of HR functions to support strategic change

Many a times external factors lead to changes in organisational structures and culture. This truly happened at Adobe which has 11,000 employees worldwide with 4.5 billion $ yearly revenue.

Acrobat, Flash Player, and Photoshop are among the well-known products of Abode.

Due to new emerging technologies and challenges posed by small competitors Adobe had to stop selling its licensed goods in shrink-wrapped containers in 2011 and switched to offering digital services through the cloud. They gave their customers option of downloading the necessary software for free or subscribing to it every month rather than receiving a CD in a box.

The human resource (HR) function also took on a new role, which meant that employees had to adjust to new working practices. A standard administrative HR function was housed at Adobe’s offices. However, it was less suitable for the cloud-based strategy and performed well when Adobe was selling software items. 

HR changed its role and became more human centric and reduced its office based functions.

The HR personnel did “walk-ins,” to see what assistance they might offer, rather than waiting for calls. With a focus on innovation, change, and personal growth, Adobe employed a sizable percentage of millennials.

Instead of having an annual reviews, staff members can now use the new “check-in” method to assess and define their own growth goals whenever they find it necessary, with quick and continuous feedback. 

Managers might receive constructive criticism from HR through the workshops they conduct. The least number of employees have left since this changed approach of HR.

Why did Adobe’s HR department make this change? Since the company’s goals and culture have changed, HR discovered new ways to operate to support these changes.

2. Intuit – applying 7s framework of change management 

Steve Bennett, a vice president of GE Capital, was appointed CEO of Intuit in 2000. Intuit is a provider of financial software solutions with three products: Quicken, TurboTax, and QuickBooks, which have respective market shares of 73 percent, 81 percent, and 84 percent. 

Despite this market domination, many observers believed Intuit was not making as much money as it could.

Additionally, the business was known for making decisions slowly, which let rivals take advantage of numerous market opportunities. Bennett desired to change everything.

In his first few weeks, he spoke with each of the top 200 executives, visited the majority of Intuit’s offices, and addressed the majority of its 5,000 employees.

He concluded that although employees were enthusiastic about the company’s products, internal processes weren’t given any thought (based on Higgins, 2005).

He followed the famous Mckinsey 7S Model for Change Management to transform the organization. Let’s see what are those changes that he made:

By making acquisitions, he increased the products range for Intuit.

He established a flatter organizational structure and decentralized decision-making, which gave business units more authority and accountability throughout the whole product creation and distribution process.

To accomplish strategic goals, the rewards system was made more aligned to strategic goals.

He emphasized the necessity of a performance-oriented focus and offered a vision for change and also made every effort to sell that vision.

He acknowledged the commitment of staff to Intuit’s products and further strengthened process by emphasizing on quality and efficiency of his team.

Resources were allotted for learning and development, and certain selected managers were recruited from GE in particular skill categories, all to enhance staff capabilities concerning productivity and efficiency.

Superordinate goals:

Bennett’s strategy was “vision-driven” and he communicated that vision to his team regularly to meet the goals.

Bennett’s modifications led to a 40–50% rise in operating profits in 2002 and 2003.

8,000 people worked for Intuit in the United States, Canada, the United Kingdom, India, and other nations in 2014, and the company generated global revenues of nearly $5 billion.

3. Barclays Bank – a change in ways of doing business

The financial services industry suffered heavily during mortgage crisis in 2008. In addition to significant losses, the sector also had to deal with strict and aggressive regulations of their investing activities.

To expand its business, more employees were hired by Barclays Capital under the leadership of its former chief executive, Bob Diamond, who wanted to make it the largest investment bank in the world. 

But Barclays Capital staff was found manipulating the London Inter-Bank Offered Rate (LIBOR) and Barclays was fined £290 million and as a result of this the bank’s chairman, CEO, and COO had to resign.

In an internal review it was found that the mindset of “win at all costs” needed to be changed so a new strategy was necessary due to the reputational damage done by the LIBOR affair and new regulatory restrictions. 

In 2012, Antony Jenkins became new CEO. He made the following changes in 2014, which led to increase of 8% in share price.

Aspirations

The word “Capital” was removed from the firm name, which became just Barclays. To concentrate on the U.S. and UK markets, on Africa, and on a small number of Asian clients, the “world leader” goal was dropped.

Business model

Physical commodities and obscure “derivative” products would no longer be traded by Barclays. It was decided that rather than using its customers’ money, the business would invest its own.

Only thirty percent of the bank’s profits came from investment banking. Instead of concentrating on lending at high risk, the focus was on a smaller range of customers.

In place of an aggressive, short-term growth strategy that rewarded commercial drive and success and fostered a culture of fear of not meeting targets, “customer first,” clarity, and openness took precedence. Investment bankers’ remuneration was also reduced.

Beginning in 2014, branches were shut, and 19,000 jobs were lost over three years, including 7,000 investment banking employees, personnel at high-street firms, and many in New York and London headquarters. £1.7 billion in costs were reduced in 2014.

There was an increase in customers’ online or mobile banking, and increased automation of transactions to lower expenses.  To assist customers in using new computer systems, 30 fully automated branches were established by 2014, replacing the 6,500 cashiers that were lost to this change with “digital eagles” who used iPads.

These changes were made to build an organization that is stronger, more integrated, leaner, and more streamlined, leading to a higher return on equity and better returns for shareholders. This was also done to rebuild the bank’s credibility and win back the trust of its clients.

4. Kodak – a failure to embrace disruptive change

The first digital camera and the first-megapixel camera were both created by Kodak in 1975 and 1986 respectively.

Why then did Kodak declare bankruptcy in 2012? 

When this new technology first came out in 1975, it was expensive and had poor quality of images. Kodak anticipated that it would be at least additional ten years until digital technology started to pose a threat to their long-standing business of camera, film, chemical, and photo-printing paper industries.

Although that prediction came true, Kodak chose to increase the film’s quality through ongoing advances rather than embracing change and working on digital technology.

Kodak continued with old business model and captured market by 90% of the film and 85% of the cameras sold in America in 1976. With $16 billion in annual sales at its peak, Kodak’s profits in 1999 was around $2.5 billion. The brand’s confidence was boosted by this success but there was complete complacency in terms of embracing new technology.

Kodak started experiencing losses in 2011 as revenues dropped to $6.2 billion. 

Fuji, a competitor of Kodak, identified the same threat and decided to transition to digital while making the most money possible from film and creating new commercial ventures, such as cosmetics based on chemicals used in film processing.

Even though both businesses had the same information, they made different judgments, and Kodak was reluctant to respond. And when it started to switch towards digital technology, mobile phones with in-built digital camera had arrived to disrupt digital cameras.

Although Kodak developed the technology, they were unaware of how revolutionary digitalization would prove to be, rendering their long-standing industry obsolete.

You can read here in detail Kodak change management failure case study.

5. Heinz   – a 3G way to make changes

Warren Buffett’s Berkshire Hathaway and the Brazilian private equity business 3G Capital paid $29 billion in 2013 to acquire Heinz, the renowned food manufacturer with $11.6 billion in yearly sales.

The modifications were made right away by the new owners. Eleven of the top twelve executives were replaced, 600 employees were let go, corporate planes were sold, personal offices were eliminated, and executives were required to stay at Holiday Inn hotel rather than the Ritz-Carlton when traveling and substantially longer work hours were anticipated. 

Each employee was given a monthly copy restriction of 200 by micromanagement, and printer usage was recorded. Only 100 business cards were permitted each year for executives.

Numerous Heinz workers spoke of “an insular management style” where only a small inner circle knows what is truly going on.

On the other side, 3G had a youthful team of executives, largely from Brazil, who moved from company to company as instructed across nations and industries. They were loyal to 3G, not Heinz, and were motivated to perform well to earn bonuses or stock options. 

“The 3G way,” a theory that 3G has applied to bring about change in prior acquisitions like Burger King, was the driving reason behind these modifications. Everything was measured, efficiency was paramount, and “nonstrategic costs” were drastically reduced. 

From this vantage point, “lean and mean” prevails, and human capital was not regarded as a crucial element of business success. It was believed that rather than being driven by a feeling of purpose or mission, employees were motivated by the financial gains associated with holding company stock.

Because it had been well-received by the 3G partners, those who might be impacted by a deal frequently saw a “how to” guide published by consultant Bob Fifer as a “must read.”

However, many food industry experts felt that while some of 3G’s prior acquisitions would have been ideal candidates for a program of cost-cutting, Heinz was not the most appropriate choice to “hack and slash.” The company had already undergone several years of improved efficiency and it was already a well-established player in the market.

In summarizing the situation, business journalists Jennifer Reingold and Daniel Roberts predicted that “the experiment now underway will determine whether Heinz will become a newly invigorated embodiment of efficiency—or whether 3G will take the cult of cost-cutting so far that it chokes off Heinz’s ability to innovate and make the products that have made it a market leader for almost a century and a half.” 

Final Words

A short case study on change management can be a helpful tool in learning how to effectively manage change. These case studies will show you how one company successfully managed a major change and what lessons can be learned from their experience. By studying these case studies, you will gain valuable insights into the importance of planning, communication, and employee involvement when managing change. These are all vital elements that must be considered when implementing any type of change within an organization.

About The Author

Tahir Abbas

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