Domino’s Pizza is a retail pizza chain American multinational company. Dominick DeVarti, Tom Monaghan, and Jim Moaning founded the pizza chain brand in 1960. Currently, the company has established a network of approximately 18848 pizza chain stores in 83 countries across the globe. Today, we’ll discuss the PESTLE analysis of Domino’s Pizza; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Domino’s Pizza
Some of the main political factors in the Domino’s Pizza PESTLE analysis are as follows;
I-Trade Policies
Cheese, dough, and meat are the main ingredients for the production and cooking of pizza. Domino’s Pizza needs to procure the raw materials, ingredients, and spices locally or from neighboring countries. However, it is not a one-time thing, rather the company engages in procurement activities daily and regularly. The pizza chain brand should keep in mind the trade policies of different countries to ensure the smooth availability of its operations and processes.
II-Safety Regulations
The health and food safety regulations of different countries are different and very strict. Domino’s Pizza should comply with the health and safety regulations of different countries to avoid any type of potential lawsuits and other legal challenges.
III-Political Stability
The stable political environment plays a key role in the growth and development of the pizza chain brand Domino’s Pizza. For instance, procession, strikes, roadblocks, and political tension would cause supply chain and distribution delays, and it negatively impacts the sales and profitability of the company.
Economical Factors Affecting Domino’s Pizza
Some of the main economic factors in the Domino’s Pizza PESTLE analysis are as follows;
I-Economic Recession
The global economy is going through an economic recession due to international political issues, the oil crisis, and technological transformation. When people have limited income due to a higher unemployment rate and a tight economy, it decreases the purchasing power of people and consumer spending.
II-Currency Exchange Rate
A significant amount of capital revenue of Domino’s Pizza comes from the international and global markets. The value of the USD is much higher than other currencies except the Euro, British Pound, Kuwaiti Denar, and others. A slight decrease or change in the currency exchange rate would negatively impact the cost, expenses, sales, and profitability of the company after conversion back into the USD currency.
III-Inflations and Taxes
Inflation and government taxes have a direct impact on the sales and profitability of the pizza chain brand Domino’s Pizza. These economic indictors increase the retail price of the company’s pizza, and suddenly pizza becomes unaffordable to the middle income-class people. They would switch to other low-cost food options.
Social Factors Impacting Domino’s Pizza
Some of the main social factors in the Domino’s Pizza PESTEL analysis are as follows;
I-Fast Food Option
Domino’s Pizza is the world’s leading fast-food retail chain brand. Approximately 60% of the US population prefers the fast-food, rather than cooking food at home which is highly time-consuming. High consumption of fast food would increase the growth and sale of the company’s pizza and other fast-food items.
II-Cultural Preferences
Along with offering classic Domino’s Pizza, the pizza chain brand also offers local and cultural spices and products to the customers. For instance, the company includes paneer, vegetable, and other spices for the Indian market. Compliance with local and cultural food trends would help the company to increase its product and brand adoption rate in foreign markets.
III-Healthy Diet Trends
The trend of healthy dietary organic food has been increasing significantly for the past few years. It presents a great opportunity for the pizza chain brand Domino’s Pizza to shift towards organic food options and include dietary organic pizza for customers. It would help the company to increase the sale of healthy dietary products and keep up with the growing customer market trends.
Technological Factors Affecting Domino’s Pizza
Some of the main technological factors in the Domino’s Pizza PESTEL analysis are as follows;
I-Online Ordering
The online food ordering and home delivery service has been increasing significantly for the past few years. Domino’s Pizza has developed a very large and advanced e-commerce platform for pizza and food ordering. According to an estimate, approximately 70% of the company’s pizza orders came from its e-commerce platform.
II-AI & ML for Demand Forecasting
Domino’s Pizza is employing AI ML and data analytical technology for demand forecasting in the upcoming season. It allows the company to store and stock a sufficient quantity of materials and ingredients to avoid any type of delay and disruption.
III-Delivery Tracking Technology
Domino’s Pizza has also invested in the GPRS technology and installed it in the delivery service providing vehicles. It allows the company to offer real-time tracking and traceability options to the customers. As a result, it improves the overall customer satisfaction level.
Legal Factors Impacting Domino’s Pizza
Some of the main legal factors in the Domino’s Pizza PESTEL analysis are as follows;
I-Regulatory Compliance
Domino’s Pizza should comply with the health, food safety, franchising business agreement, and other business, supply chain, and operation regulations. The regulatory compliance helps the company to smoothly perform its various pizza production and cooking operations, and provide the timely delivery service to the end consumers without any delays and disruption.
Environmental Factors Affecting Domino’s Pizza
Some of the main environmental factors in the Domino’s Pizza PESTEL analysis are as follows;
I-Sustainability Initiative
Domino’s Pizza has taken various environmentally sustainable initiatives to keep up with the growing environmental protection trends. They comprise of using biodegradable packaging material, local sourcing of raw materials and ingredients, and efficient modes of transportation. It allows the company to decrease the carbon emission rate.
Conclusion: Domino’s Pizza PESTLE Analysis |PESTEL Analysis of Domino’s Pizza |External Environmental Analysis of Domino’s Pizza | Strategic Analysis of Domino’s Pizza
After an in-depth study of the pestle analysis of Domino’s Pizza; we have realized that Domino’s Pizza is the world’s leading pizza chain brand. If you are learning about the Domino’s Pizza PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
