It shouldn’t have to be shared, but Papa Johns exists pretty strongly within the fast food environment. Power of buyers is high, substitutes are readily available, etc. Now, to explain their current strategy. Papa Johns, through their efforts, have allowed them to rise to having 6% of the market they exist in, but generally still pale in comparison to Pizza Hut and Dominos. However, their strategy that they’ve picked for themselves seems to be working for their environment. Their strategy being that they promote themselves as a ‘premium’ pizza, with superior quality and an attention to customer’s details.
They’ve also differentiated themselves by having partnerships with larger corporations such as Coca-Cola and their suppliers. This is a key point. By having contracts with their suppliers, such as the quarterly contract with their cheese suppliers, keeping prices stable at all times is a very easy task, while the other pizza places will often have to vary their prices throughout the year. However, one mistake that has been coming up that they don’t match the environment, has shown that they have tried placing too many stores too quickly.
They’ve had to shut down several underperforming stores within the past year, which shows that trying to forcefully expand their market share into areas that already have strong brand loyalty with other competitors is not the answer. Their recent partnership to be the pizza sponsor of the Superbowl over the past three years is a correct way. This allows people to get a cheap ‘premium’ pizza and try and understand it’s superiority. There are a few key issues that Papa Johns should expand on, especially in the next five years. Papa Johns, in terms of it’s menu, is drastically behind it’s competitors.
Dominos and Pizza Hut both offer more alternative options in terms of just having pizza. If Papa Johns differentiated it’s product and included the same items that the competitors provide, such as sandwiches and salad options, their focus could be spread to more people that are not currently within their market share. This can also be solved through acquisition. Papa Johns was created by a company combining with a pizza company, so another acquisition of another type of food industry could drastically change Papa Johns for the better.
Another key issue that none of the big three pizza companies are doing is touching the international market. All of them have stores, but they often are just moving their culture to other countries. Papa Johns is known for their customer details. Why not incorporate other countries’ tastes and cultures within their food details? At any rate, from the previous year, growth and sales are a bit down. In a market of strong brand loyalty, these minor differentiations are going to be what makes or breaks Papa Johns.
Courtney from Study Moose
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