Case Study International Business Domino's Pizza

Case Study (Video Quiz) #1

The video for the case study Domino's Pizza in Mexico presents the highlights of the company's journey becoming a successful international brand. Besides the normal challenges businesses have, additional factors need to be taken into account when a business decide to enter foreign markets. The lack of understanding of the culture and ways to do business in a specific country can cost the company money and prevent them from being successful.

1. What problems did Domino's encounter when trying to standardize its product throughout the world? Why was local input beneficial?

At first Domino's expected cultures to adapt to their product without taking into account the different preferences of each country or culture they were working with, needless to say, this strategy failed. In the beginning Domino's assumed everyone in the world spoke the same language and understood things the same way; they assumed for example that Japanese consumers should know what pepperoni was or that "a call" had the same meaning in the U.S. than in the U.K.

Domino's started being successful internationally once they realized they had to adapt to the cultures of the markets they entered. Local input was beneficial because locals are familiar with the culture and can better understand what will work for their customers and what won't.

2. How did the pizza giant adapt to different markets and cultures?

Domino's adapted to the different markets and cultures on a case by case basis; for example they added different ingredients in several markets to cater to individual tastes/preferences of each of those markets/cultures. They also took into account cultural customs and beliefs, for example in the Philippines by deciding restaurant locations and equipment placement based on Feng Shui. In the United Arab Emirates they designed special maps because the streets have three different interchangeable names.

3. What factors have contributed to Domino's success in Mexico? (*Why Domino's operations are so good in Mexico?)

Domino's started its operations in Mexico back in 1990 and today they have over 500 stores, making it the biggest market outside U.S.; the success in Mexico has been attributed in large part to Master Franchisee Albert Torrado. He took it upon himself to teach Mexicans the franchise business, and he provides high levels of support to the individual store owners/operators in their business. The support goes from delivery to training, having a main office which helps with administrative functions, accounting, and provides marketing materials to the stores, which are included for their first year.

When Domino's entered Mexico, pizza was seen as a high end expensive food; when the economy collapsed, a decision was made and prices were lowered; pizza was advertised as family meal, and as a result the restaurants sold higher quantities. Thanks to their flexibility and being able to adapt to the circumstances and the changes in the economy, Domino's is the number one restaurant chain in Mexico today. It appears from the comments made by Torrado on the video that they are constantly finding new opportunities; he mentions they have stores located in high traffic areas such as a subway station where they sell 20,000 slices a week. Domino's pizza in Mexico also operates under the principles of social responsibility, for