Papa John’s: Getting to the Top
An Analysis of the Pizza Industry
Mathew Wimberly
GBA 490
6 May 2015
Table of Contents
Recommendation 1:
Recommendation 2:
Recommendation 3:
Appendix
Current Strategy Industry and Competitive Analysis Exhibit 1: PESTEL Analysis Exhibit 2: The Five Forces Model Exhibit 3: Driving Forces Analysis Internal Analysis Exhibit 4: SWOT Analysis Exhibit 5: Financial Analysis
Recommendation 1:
Appendix
Current Strategy
Industry and Competitive Analysis
Market Size and Growth Rate
• In 2014 93% of Americans ate pizza at least once a month
• Pizza Industry market generated annual sales of $42.8 billion in 2012 and is projected to grow
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o Take n’ Bake
• Carry-out and Delivery combined account for 66.2% of most popular option
Number of Rivals o The industry is dominated by large companies
Pizza Chains: 32% of industry sales and 28% of locations
• These numbers are for the four largest chains: Pizza Hut, Domino’s, Papa John’s, and Little Caesars
Independent Pizzerias: 48% industry sales and 57% of locations o The industry is not consolidating to a smaller number of firms because the industry is stable for large competing companies
Scope of Competitive Rivalry
• Larger companies compete multinational
• Independently owned pizzerias compete locally and regionally
• Companies that compete in foreign markets are more successful in the long run than companies that are local or regional o This is because the companies expand their demographics and sales
• Larger companies compete internationally o Papa John’s ( in 2013)
723 company owned establishments and 3,705 franchised establishments
Located in all 50 states and 34 countries
Opened 183 restaurants in international markets and 82 in North America
There are 1,159 international locations o Pizza Hut (in 2014)
Franchised countries in 88 countries
7,846 units in the United States
1,264 units in
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• Little Caesars operates in more than 20 countries with over 2,500 units
Emerging New Internet Capabilities and Applications
• 2001 Papa John’s made online ordering possible nationwide
• 2007 Papa John’s made text orders were added
• 2010/2011 Papa John’s made iPhone and Android launched an online ordering app
• 2012 Papa John’s made launched online ordering with an app the Kindle Fire
• In 2014 more than 50% of Papa John’s orders were made digitally
Product Innovation
• The industry is characterized by rapid product innovation but short product life cycles is not a key characteristic o Companies must also stay on their feet with new items or they will be left behind in the rapidly growing industry o For the most part any pizza can be remade with a customized order
The only exception would be a new crust
This causes pizzas to be long term not short term
• Research and Development are very important because the companies must know what their customers not only want, but need
Disposable income of the surrounding areas of each location and the economy are both important to know
• Yes there are opportunities to overtake key rivals o As long technology is increasing the first-to-market will continue to
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marketplace no matter what the product is when a company begins sacrificing at the customers expense people take notice quickly. This is when the buyer thinks they would be willing to give a little more in the price to be happy about their purchase. This is when Papa John steps in and reminds us all that they have been number one three years in a row in customer satisfaction. People take notice of the decisions that other people make. If they see an empty Papa Johns box in the trash of their next door neighbor they will take notice.
... this and their marketing strategy will be key if they are to remain viable, grow and compete in the market.
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