Domino’s Pizza is a multinational corporation that focuses on Pizza delivery. It has its main branch in Michigan, U. S. The corporation works within foodservice franchising, a subset of the food industry. Domino’s pizza is considered one of the top two pizza franchising brands alongside Pizza hut in the United States. The corporation stands out due to its low price strategy compared to similar brands in the industry. Due to the vastness of the company, I believe that solid value chain management is vital and has promoted its success. Value chain management involves curating, analyzing, and fine-tuning every step in the operational process, from the supply of raw materials to post-delivery services to the end-user (Kannegiesser, 2008).
Value chain management within the foodservice industry is essential as it ensures a higher level of operational efficiency. According to Global, value chain management enhances the process and operational efficiency. Domino’s pizza has to deal with a large pool of suppliers, workers, and other businesses working on a global scale. Efficiency allows for prompt delivery and preparation, which are critical success factors for Domino’s. The international structure creates a web of processes that can easily breakdown if not streamlined through proper value chain management. This technique is key to keeping all working parts internal and external stakeholders on the same page, creating a seamless flow of information and improving efficiency and overall success. Curating a good global value chain allows for better communication with boosting traceability of raw material and finished goods.
Additionally, value chain management is a driver in cost reduction for Domino’s Pizza. Curating an optimized value chain provides the underpinnings for huge end-to-end savings from streamlined processes across the globe. Shapiro et al. (1993) allude that the primary advantage of an optimal value chain is an explicit reduction in costs. Streamlined operations through value chain management significantly reduce waste, better inventory control for products held, and improve product quality. A global company can quickly rack up costs from within the value chain. A company like Domino’s can offset the unnecessary costs by putting in place stern value chain management contributing to brand success.
A sustainable competitive advantage is essential as it distinguishes a company from its competitors leading to success. Domino’s Pizza has been able to maintain a competitive edge across the globe consistently. Value chain management comes into play by creating a foundation on which a corporation can identify sources of competitive advantage (Porter, 2001). A fundamental objective of value chain management is to develop and strengthen competitive advantage. Domino’s prides itself in delivering high-quality pizzas promptly and at a lower cost than competitors. A streamlined, efficient value chain comes in handy to ensure that all processes are productive at the highest efficiency level.
Profit maximization constitutes critical success factors sought by companies. Solid and efficient value chain management as a technique allows Domino’s to generate more revenues and accrue high profits. This effect stems from the fact that a well-managed value chain allows a company to improve bids and proposals, better product planning, source quality raw materials, and satisfy customer demand promptly—these efficiencies boost income generation. Value chain management allows a company to identify value nets that provide revenue hubs (Bovet & Martha, 2000).
References
Bovet, D., & Martha, J. (2000). Value nets: breaking the supply chain to unlock hidden profits. John Wiley & Sons.
Kannegiesser, M. (2008). Value chain management in the chemical industry: Global value chain planning of commodities. Physica-Verlag.
Karlik, A. E., Maksimtsev, I. A., & Iakovleva, E. A. (2016, May). Modern architecture of global value chains and value chain management of Russia. In 2016 XIX IEEE International Conference on Soft Computing and Measurements (SCM) (pp. 518-520). IEEE.
Porter, M. E. (2001). The value chain and competitive advantage. Understanding business processes, 2, 50-66.
Shapiro, J. F., Singhal, V. M., & Wagner, S. N. (1993). Optimizing the value chain. Interfaces, 23(2), 102-117.
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