Company overview & History

• 1984 : In 1984, at the age of 22, Schnatter invested $1,600

in a used pizza oven and began selling pizzas out of the
back of Mick’s Lounge.
• 1986: began franchising the Papa John’s concept
• 1993 : launched a successful initial public offering (IPO)
that raised $12 million
• 1996 : 1,000th Papa John’s location was opened.
• 1998 : Expanded internationally, with restaurants in Mexico
and Puerto Rico
• 1999 : Expanded to 2,000 locations
• 2005 : owned roughly 20 percent of the company’s shares
and served as chairman
MISSION
At Papa John's we work so that our customers have
an unforgettable shopping experience.

VISION
To be a leading corporation at an international level,
offering products and a service of superior quality.
 STRATEGY
5 MAJOR COMPONENTS OF PAPA JOHN’S STRATEGY :

 High-quality menu offerings

 Efficient operating systems
 Employee training and development
 Effective marketing programs and
 A strong franchise system
OVERVIEW OF THE PIZZA RESTAURANT INDUSTRY
• Worldwide sales for 2012 and 2017 (projected) were $42.8 B
and $49.5 B, respectively
• Worldwide establishments of pizzerias in 2012 and 2017
(projected) were 74,400 and 86,493, respectively

MARKET SHARE OF PIZZA INDUSTRY (%)

Pizza Hut
11%
Domino’s,
10%
Papa John’s
6%

Others
73%
 OVERVIEW OF THE PIZZA RESTAURANT INDUSTRY
• The industry comprised two segments:
Pizza chains and independent pizzerias
• Independently owned restaurants accounted for 57 percent of
locations and 48 percent of industry sales.
• The four largest pizza chains were Pizza Hut, Domino’s, Papa
John’s, and Little Caesars, which together accounted for 32
percent of industry sales and 28 percent of locations.
 PAPA JOHN’S RIVAL PIZZA CHAINS
• The four largest pizza chains were Pizza Hut, Domino’s, Papa
John’s, and Little Caesars, which together accounted for 32
percent of industry sales and 28 percent of locations.

Major Competitors Market status

Pizza Hut • Net earnings of approximately $11.2 billion and $1.1

billion, respectively
• operated and franchised restaurants in 88 countries,
with 7,846 units in the United States, 1,264 units in
China, and 5,490 units in other international markets.
Domino’s • operated and franchised more than 10,800 carryout
and delivery pizza units in all 50 states and in more than
70 countries in 2014.
• Company added 631 units in 2013, 573 of which were
outside the United States.
• The company’s revenues had increased from $1,652
million in 2011 to $1,802 million in 2013.
 SWOT ANALYSIS
STRENGTH WEAKNESS

• Strongest brand loyalty • Limited menu items

• High-quality product made • Limited number of stores
from the best ingredients
• Strong employee training and
development programme
• Good brand name (easy to
remember)
• Sufficient restaurant layouts
OPPORTUNITY THREAT
• International and emerging • Intense competition in fast
market expansion food pizza industry
• Diversification of business. • National economic instability
• The boom of social sites • Mature industry
• Health-conscious people
 Papa John's International, Inc. Porter Five Forces Analysis
Forces Management
Threats of New Entrants • By innovating new products and services. New products
not only brings new customers to the fold but also give old
customer a reason to buy Papa John's International, Inc. ‘s
products.
• Building capacities and spending money on research and
development.
Bargaining Power of • By building efficient supply chain with multiple suppliers.
Suppliers • By experimenting with product designs using different
materials so that if the prices go up of one raw material
then company can shift to another.
Bargaining Power of • By building a large base of customers. This will be helpful in
Buyers two ways. It will reduce the bargaining power of the buyers
plus it will provide an opportunity to the firm to streamline its
sales and production process.
• By rapidly innovating new products. Customers often seek
discounts and offerings on established products so if Papa
John's International, Inc. keep on coming up with new
products then it can limit the bargaining power of buyers.
• New products will also reduce the defection of existing
customers of Papa John's International, Inc. to its
competitors.
Papa John's International, Inc. Porter Five Forces Analysis
Forces Management
Threats of Substitute • By being service oriented rather than just product
Products or Services oriented.
• By understanding the core need of the customer
rather than what the customer is buying.
• By increasing the switching cost for the customers.
Rivalry among the • By building a sustainable differentiation
Existing Competitor • By building scale so that it can compete better
• Collaborating with competitors to increase the
market size rather than just competing for small
market.
 VRIN TESTING:

VALUES • Papa John’s product are made by high

quality ingredients
• These resources are in line with Papa
John’s mission, core values, and slogan.

RARITY The high quality resources are not rare and

can be found easily since flour, dough,
cheese, and other spices and ingredients are
common even in the supermarket.

IMITABILITY Though, these resources are costly to imitate.

But, it’s not hard to imitate. But, it’s hard to
maintain a fixed price for the high quality
resources because of the price volatility.
NONSUBSTITUTABLE No patents & copyright
The Components of a Company’s Macro-Environment

Political Factors unstable economic conditions in many countries

Economic Factors

Social Factors “Social media has become very important to the [entire
restaurant] industry and social media users are much
more active and likely to dine-out, to connect with
restaurants online and post reviews.”
Technological Factors Modern technology by providing consumers with a
smartphone app and having its own Facebook and
Twitter pages.
Environmental Factors

Legal Factors
 THE CONCEPT OF A COMPANY
VALUE CHAIN
Four primary value chain components stand out:
1.Quality Control Centers: Raw materials, packaging, and fixtures sourcing

2.Supply chain management

• Handling the commissary operations and logistics for franchisees
• Arranging for timely/frequent deliveries of inventory as well as trained personnel to
Papa John’s company-owned and franchised outlets

3.Restaurant, take-out, and delivery operations

4.Marketing and brand-building (including promotions, website management, mobile

app)
 Recommendation

Differentiation of products : Focuses on creating superior quality pizzas &

customized pizzas

Marketing campaign : Differentiation required

Differentiation of supply chain : Reduces labor cost and waste, Maintains quality
and consistency.

International market expansion Required

High quality menu offerings
FIGURE 4.3 A Representative Company Value Chain