Papa Johns International Inc and post a Case Analysis that a

Papa John’s International, Inc., and post a Case Analysis that answers the following questions:

1. How strong are the competitive forces confronting Papa John’s in the pizza segment of the quick serve restaurant industry?

2. Do a five-forces analysis to support your answer. What do you see as the key success factors in the pizza segment of the quick serve restaurant industry?

Solution

Papa John’s Pizza has already proven that their strategic initiatives are working within their personal business model because they are ranked within the top three within the pizza industry. What must Papa John’s Pizza do in order to overcome the top two competitors within the market, and/or retain their third spot within the industry? Papa John’s competitors include Dominos and Pizza Hut. Papa John’s rivalry rating has proven to be strong within 4 out of the f indicators.

The five-forces within Papa John’s analysis model are derived from their competitive forces that drives their success within the pizza industry. The five forces include rival competition against their substitute products, buyer bargaining power with their customers and the supplier bargaining power, while monopolizing the threat of new entrants into the market. Utilizing the implementation of Porter’s Five Forces for the Papa John pizza industry will help Papa John’s knowledge of the external rivalry in the present and future gains.

Within the Papa John’s Porter’s Five Forces Model we will rate them according to the Intensity of rivals within the pizza industry: The rating is high due to the intensity of Papa John’s competitors that are selling the same products within the same price margins. The threat of substitute products would rate with a rating of High also, because the customers because the accessibility to order a comparable pizza within the chain or grocery market chain is also highly competitive, and there are many options available to the customer when substituting for pizza.

The Bargaining Power of Papa John’s buyers is also given a rating of High, due to the number of pizza restaurants to choose from, and the competitive pricing structure between their pizza prices and a competitors pizza price are highly competitive. Pizza buyers are likely to shop where discounts and coupons will reduce the original price making the market more competitive for Papa John’s Pizza.

A medium rating would be given for Papa John’s Pizza for their bargaining power within the supplier relationship because they will have more bargaining leverage due to their purchasing volume, and this would give them monopoly on assurance for fixed lower prices for their food ingredient products. Since Papa John’s Pizza mainly depends upon their QC center for supplies they could have their prices affected if they were to experience price hikes from the QC center.

The pizza industry is easy to enter into the market because of the low startup costs, and the funds that are available for startup pizza businesses to expand. This would give a high rating within the forces model due to the lowered risk due to the high fixed costs. New entrants must face higher costs when entering into the pizza marketplace. Establishing brand recognition, building clientele, volume product costs, and lower profit margin levels to be expected upon entrance. Whereas the already established Papa John’s pizza has already conquered those buildup costs, and are only competing within the established well-branded competitors.

The key elements for Papa John’s strategy would focus on their use of technology, overcoming economic crisis, food inflations, and labor costs. They would need to continue a strong competitive advantage against their competitors, practice aggressive promotional products that are sold and can promote higher quality products in order to draw additional customers into their pizza chain. Papa John focuses on making their pizza products affordable and accessible through different media technologies for their customer’s convenience. Papa John’s Pizza believes in hiring the best employees and offers a company educational training program for all of their employee and franchise owners. The last strategy element for Papa John’s Pizza is to keep investing within great geographic locations that enable them to continue franchise/store growth, and draw in more customers while enabling them cost efficiency.