Case Assignment 1:
Papa John’s International, Inc.: Twenty-First Century Growth Challenges
Inverted broom closet in a hometown lounge. He called it Papa John’s. Today, there are over 2,500 locations across the North America, South America, Africa, Europe and Asia. While Papa John’s has done a very good job with their forward thinking strategies, there are still some avenues to be explored to keep them competing as one of the world’s best pizza chains. During the first year of the company’s inception, John was able to grow his business from one store to eight, and generate $500,000 in revenue. While Papa John’s may not have had true first movers advantage (Pizza Hut opened in 1958), they did have a distinct advantage when it came to product differentiation. Papa John’s prided themselves on “better ingredients” making a better pizza, which is something they stand by to this day. This selling point is what gave them an advantage over the likes of Pizza Hut, or Dominoes (est. 1967), and made it possible for them to enter the market. One of the early strategic moves made by John was to implement a hub-and-spoke type “commissary” (or quality control center) that was responsible for delivering ingredients, supplies, and dough to a number of stores in the surrounding geographic location. This allowed John to ensure the quality of the food being served. These centers were key to early expenditure and quality control, but would be hard to sustain in future expansion due to numerous stores in more widespread locations.
In 2007, Papa John’s was third in sales of pizza among the five major companies (see figure 1). The top five sellers make up 88% of all sales, and of those five, Papa John’s is responsible for about 16%, or approximately two billion dollars’ worth. While Papa John’s is in the same category as Pizza Hut and Dominoes, they believe that the quality of