Domino’s Case Study | Team Consulting Report | Group Member Name:

Date Issued:

6th May 2013

3815 (excluded table of contents)

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Assessment 3

* LETTER OF TRANSMITTAL
TALENTWORK
Executive Search &
Human Capital Consulting

Dr Jasvir Kaur Monash University Level 8 Building N 900 Dandenong Road PO Box 168 Caufield East, Victoria 3145 Australia Telephone: +603 9876 9990 Email: talentwork.com.au

6th May 2013

Dear Dr Jasvir Kaur,

As requested we hereby submit this analysis report for Domino. In this report, we have reviewed the nature of Domino’s crisis, root reason for this event, the impact of the event on the whole corporate as well analysis of Domino’s reactions and response. At last, we provide recommendations regarding with this issue and expected future outcome. We would like to express our sincere thanks for your guidance and support during the process of compiling this report. If you have any queries, please do not hesitate to contact us.

Thank you.

Yours sincerely,
Du Mengting, Haolin Huang, Cheong Wai Yee, Lu Li, Xiaodan Wang

Table of Contents

LETTER OF TRANSMITTAL 1

EXECUTIVE SUMMARY 3

PART A 5 1.0 Timeline of Major Events 5 2.0 Social Media Effects 6 3.0 Root causes of the Domino’s Pizza issues 7 4.0 A discussion of the major stakeholders affected 8

PART B 10 5.0 Things that Domino’s Pizza need to say or do in relation to the crisis 10 6.0 When Domino’s Pizza should respond to the public 11 7.0 Interventions of the roots causes 12 8.0 Medium that Domino’s Pizza should use to deliver its message 13 Conclusion 15

PART C 17 9.0 Team Reflection Report 17 9.1 Our team goal and achievement 17 9.2 Communication challenges 17 9.3 Group performance 18 9.4 Strategies for team performance improvement 19 9.5 Team advantages 19

Reference 19

* EXECUTIVE SUMMARY
The object of this report is to provide detailed recommendations regarding with Domino’s ‘YouTube Media Crisis’ which brought the whole group into the central of troubles. The advices will be made with respect to the nature and timeline of the whole event, the power and impact of social media on Domino’s, the root causes of this event as well as all stakeholders who were involved.

This report provides an overview of the impact on Domino’s, which is based on external factors such as public voices, social media impact and internal reactions. Data is derived from Domino’s relative articles, official media release, official announcements and other online resources like original videos.

In the process of identifying strength and weakness of the Domino’s reactions, detailed analysis of the methods they used as well as public responding is applied to evaluate Domino’s risk management system, for example, people’s reply regarding with official media release. In addition, other companies’ reactions are analyzed in order to have a further understanding and cooperation. Recommendations will be provided based on current popular solutions to similar situation, some factors such as detailed procedures, response period and future expectations will also be accounted.

The main limitation of this report is the availability and reliability of information to determine the real lost for Domino’s due to this issue, as well as the overall outcome if the recommendations are taken in full.

* PART A

* 1.0 Timeline of Major Events

April 12, 2009 * Video was taken by Kristy Hammonds in Conover, N.C.

April 13, 2009 * Video posted to YouTube. * Video reaches 29,000 views within hours of posting. * Domino’s management team noticed this video (morning) * Location of store where the video was filmed has been identified by Domino’s.

April 14, 2009 * Two employees who were involved in this video were fired by Domino’s * Health department and local police contacted by Domino’s * Twitter traffic becomes noticeable * Video surpasses 1 million views at 9:30PM.

April 15, 2009 * Video is removed from YouTube by Hammonds. * Hammonds and Setzer face felony charges for distributing prohibited foods and report to Conover Police. * The hoax is found in 5 of the top 12 search results presented by Google to users by key word “Domino’s”. * Official Twitter account is created by Domino’s * Domino’s CEO (Patrick Doyle) apologies in a YouTube video. * Domino’s video response has 330,000 views when first press conference is held.

April 17, 2009 * Wikipedia entry for Domino’s was found to contain information about the hoax posted by an unofficial individual.

April 20, 2009 The video remains accessible on the Internet in its entirety.

* 2.0 Social Media Effects

Social media websites such as Facebook, Twitter, LinkedIn and YouTube represent a huge opportunity for corporate to get the attention of consumers while simultaneously building up a brand image and good reputation. Some companies create brand profiles on social networks such as Facebook fan pages and promote advertising via branded podcasts and applications, also known as apps, which means, they have noticed the power of public voice and social media.

It is an indisputable truth that social media affects the consumers perceive a corporate brand, as a new level of dialogue between consumers and a company has been opened up. Social media has become a pivotal role in shaping businesses’ brand image and reputation, which could also help to shape potential or previous customers’ shopping habits.

According to YouTube official statistics, more than 1 billion unique users visit YouTube each month, over 4 billion hours of video are watched each month on YouTube, 72 hours of video are uploaded to YouTube every minute and YouTube had more than 1 trillion views or around 140 views for every person on Earth in 2011 (YouTube official website). Meanwhile, due to the advantages of technology, people could access to vast amount of up-to-date information anytime, anywhere through their handsets or desktops, and they can share what they have interest to their friends by simply “@” their friend’s name or share in their own pages. Social media could help to build up a business from start up to most famous in few days and also could destroy a long history brand by no time. To some extent, social media stand for public voice and the will of people. That’s maybe the reason why even President Obama paid so much attention on his Official Twitter account and reply questions to his supporters through that. From his official website, it shows that Obama campaign reached 5 million supporters on 15 different social Networks over the course of campaign season last year (Burrus, 2012).

With the large-scale user group and easily accessible ways, it is no doubt that that video could viewed by 1 million people in 3 days. To make it even worse, 65% of respondents who had visited Domino’s Pizza say they would not visit Domino’s Pizza after viewing this video. (Flandez, 2009) We are losing customers and social media needs out attention, as we even do not have a Twitter account to release information and apologies.

* 3.0 Root causes of the Domino’s Pizza issues

Since the behaviours of these two Domino’s Pizza employees, Domino’s reputation was damaged and was experiencing a ‘nightmare’. Therefore, root causes of this situation should be considered thereby avoiding the similar issues happening again.

It seems that if the recruitment and selection processes have been more robust, the issue can be avoid. However, just viewing resumes and conducting an interview is far from being enough.

Take Hammond for example, interviewers may not know she had criminal record. Therefore, careful selection is important, but management in workplace is more crucial. If the manager’s hand is weakened, the employees’ can be too.

Employees’ individual behaviour and their choices to behave like that way might be another reason of this issue. However, if the internal communication and workplace norms are carried through well, the issue may be avoided. For the workplace norms, the importance of hygiene cannot be overemphasized. Moreover, In Hammond’s video, she said ‘That’s how we roll at Domino’s’ She mentioned the name of Domino’s, and she may never care about the reputation of her company. That situation indicates weak internal communication which leads to low employee morale and low sense of company honor. Therefore, management is able to influence individual behaviour.

In the apology e-mail, Ms. Hammonds wrote ‘It was fake and I wish that everyone knew that!’ Even the video is just a joke and the food they made will not be delivered to customers, in the working time, Kristy Hammonds had time to do the film and Michael Setzer wasted the food he used. This still indicates the lax management problems of Domino’s Pizza.

* 4.0 A discussion of the major stakeholders affected

If Domino’s wants to save corporate brand image and reputation and move forward from the crisis, it has to actively repair its relationship with the major stakeholders who affected by this dirty pizza case: customers, employees and shareholders.

It can be seen that the viral videos cause a great distrust and disgust among Domino’s customers, even though the crime has never supported by the company by any means. No company can operate further without its loyal customers, especially for a food company. If Domino’s fails to improve its image, because of anchoring bias rooting in customers’ mind, customers may always have a fixated disgusting perception of its quality. That will be a real disaster to Domino’s because no one wants to buy its pizza any more.

The prank does not only damage the company’s reputation, the employees in Domino’s may also be judged in a negative light. Those two individuals’ behaviors are in no way to represent all the honest and hard-working employees in Domino’s all over the world. However, if the company does not handle them in an appropriate way, those innocent employees may be involved in unfair judgments.

In addition, shareholders also face subsequent issues such as a significant decrease in profits, due to the sale amount becoming less. Besides that, to solve this crisis, Domino’s also has to spend a fortune, which can cause more decrease in profits and result in dissatisfaction among shareholders.

PART B

* 5.0 Things that Domino’s Pizza need to say or do in relation to the crisis

Based on the analysis above of all the stakeholders involved, what Domino’s need to do can be illustrated as follow:

The first and most important action Domino’s need to take is to win its customers’ faith about its quality back. As it can be seen that the videos spread very fast however the management decided to do nothing but to wait this crisis would die down by itself, which turned out that the entire process was totally against their expectations. Obviously, the management underestimated the power of social media and did not communicate with people who cared about the prank effectively. Instead of disclosing all the relevant measures the company took completely and timely, little people knew what Domino’s was doing about it. That is the main reason why distrust arises when viral videos spread but no videos released to show how Domino’s handles the issue. Therefore, Domino’s need to use social media such as YouTube and Twitter to release information as a signal to show that the company really concerns about customers’ benefits and rights, and the company is intervening actively. Only in that way may Domino’s survive from this crisis. Comparing to try to stop those viral videos spreading on the internet, which seems to be impossible, the company should emphasize more on showing their remedial measures to stakeholders because that is what they really concern about. And also, the company should apologize to the public in the video about what has happened and show the determination that those horrible things would never happen again in Domino’s.

However, the customers are not the only victims in this horrible prank. All the employees’ job performance in Domino’s may be judged with prejudice just because those two awful individuals, who are definitely unfair to other workers in Domino’s who serve customers with all their hearts. Therefore, the company should fire and charge Hammonds and Setzer immediately and release an announcement to public that the behavior of those two individuals has never supported by others and the company. The announcement should also include what Domino’s will do with those two employees and clarify that the rest employees are innocent and diligent and their serves are worth to trust.

The shareholders also suffer from the prank which brings a significant loss in company’s profits. However, if the management cannot handle all the problems, the company’s brand will crash and they may lose more. From that point of view, the only way to satisfy the shareholders is to save the company from the crisis no matter the cost. The management has to take convincing steps to bring customer’s trust back. For example, refresh all the food, sanitize all the facilities and hire new dedicated workers. That may cause a big expense but can rebuild customers’ trust to Domino’s and reassure them with food quality and safety. Only in that way can the company keep operating normally. And shareholders may cover their loss based on that there is no substantial drop in the number of customers after this crisis is over.

* 6.0 When Domino’s Pizza should respond to the public

As we all know, satisfied customers could tell three more friends, angry customers will tell 3,000, and the media has power to tell more. What’s worse, in the era of social media, a negative situation, to a large extent, will never stop by itself. Conversely, it will continue to become a crisis, thus becoming out of control. Taking an initiative not only enables a company to gain a competitive advantage, but also enables a company to show its care. For a given social media crisis, it’s better to prevent the situation or manage it with a response immediately within 24 hours.

The quicker to give a response, the better for Domino, it should take less than 24 hours respond before information is being spread quickly and beyond control. It should delete the video first and the first response can be via the same channels on You Tube which the crisis found. The response must present an apology, suggested information (both public and personal) and a promise for taking future steps.

* 7.0 Interventions of the roots causes

The lax management is the root cause of Domino’s issues. Therefore, relevant interventions should be addressed in case it happens again. More strict management system to both managers and staff is the masseur need to be implemented.

There are more than 800 branches all over the world. For owners, they cannot manage every branch directly, so they need appoint good managers to manage branch on behalf of them. Managers should be selected from staff with long working experience, honesty, and hardwork. Commendation and reward system can be established for those managers supervise very well. After selecting branch managers, manager should implement some steps to manage the branch well.

In the video, Hammonds said ‘I’m lazy.’ Hammonds is lazy but maybe her laze has not been discovered or she has not been asked to change. Therefore, a good manager should have the ability to tell who are hardworking and who are not. Managers should not ignore the problem and intervene as soon as possible. Armed with accurate data and examples, the manager needs to take the problem employee into a conference room or office – away from others, and calmly address the issue. To begin with, the manager needs to ask the person if he or she is aware of any ongoing issues to determine if the difficult person is aware of the problems. If the employee has not realized any problems, the manager needs to describe the unacceptable behaviour. The problem employee might interrupt to disagree or deny the existence of any issues. Nevertheless, the manager should to continue by giving clear examples. Once the employees begin to understand that these negative behaviours, managers should begin to coach the employee in displaying more acceptable and appropriate behaviours. However, if the employee continues to deny his inappropriate behaviour and refused to try to improve the situation, the manager needs to place this person on the fast track toward termination (David G. 2009).

Some other measures can be used by a manager to discover bad behaviour employees. Attention should be drawn when scheduling working timetable, a manager would better arrange multiple combinations of working employees. One employee can work with every else employees at different time. Thus, the manager can know more about all staff from daily conversation with different employees. Another way is installing monitors. This video issue has been very serious for Domino’s, so they must take action to prevent this issue happening again. A monitor gives warning to those employees with bad behaviours. Besides, a manager can examine employees’ performance using monitors. Of course there is no need for a manager to check monitors everyday just from time to time.

A Domino’s spokesman said ‘We got blindsided by two idiots with a video camera and an awful idea. That’s not fair.’ Such statement is necessary, but the root cause of this issue is derived from management problem. As a consequence, the improvement of management should be implemented immediately.

* 8.0 Medium that Domino’s Pizza should use to deliver its message

There are various social methodologies that can be used by Domino's in terms of solving this reputation crisis and different mediums can be used to respond to different stakeholder groups.

On line video post (You Tube, Google video, ABC News and USA Today)

The Domino's U.S.A. president, Patrick Doyle, should film an official apologize video via main stream online video websites and TV news such as You Tube, Google video or ABC News, USA Today. Responses to this crisis on the same channel it broke out on can give an apology to the customers who had already viewed this video. In addition, You Tube and Google video are the worldwide video websites and ABC News and USA Today are the most popular TV program in America. They can spread this information to more potential customers.

This sincere apology should be presented in an honest and formal language and it should be a heartfelt apology, also includes the steps this company is taking to punish the two employees and to ensure such an incident doesn’t happen again.

This message can be presented like this: we sincerely apologize for this incident and we promise this mistake will never happen again. We thank members of the online community who quickly alerted us and allowed us to take immediate action. Moreover, the employees were fired and the company filed complaints for the arrest of them. Later both were charged with distributing prohibited foods, which is a felony in North Carolina. The store was closed and sanitized and video cameras are welcomed in the stores.

Written statement (twitter, Facebook, corporate website and local newspaper)

Domino’s president also needs to do a written apology statement: we apology for this incident and this will not happen again, please following us to keep update on our actions. This statement should be clear and as short as possible by stress out the key point, or people may lose interest to read it all. It can be issued on its twitter, Facebook, corporate website and even the newspaper to make sure the people who cannot access to the video website to get information of the brand and its preventive acts.

Corporate with well-known website (Google, Bing, Yahoo and Wikipedia)

Firstly, the marketing department of Domino should update Wikipedia as well as send an article to The Consumerist by writing a more detailed statement to record this incident from start to end and the whole progress of dealing with it. Secondly, contact the popular search engine such as Google, Bing, and Yahoo and ask them to decrease or cancel out the negative research results.

Wikipedia and search engine are the best way for people to get to know a brand. This is for the potential customers who do not know this happened; therefore they may get less negative information about Domino from internet. Moreover, The Consumerist is a consumer affairs blog, which is focus on consumerism, consumers’ experiences and issues with companies. So this will be a good platform for Domino to clear its name.

Advertisements (TV, post, flyer)

The marketing department can create a new promotion or discount in a positive way and highlight all the food are fully sainted and every store has a video monitoring system. This aims to keep the loyal customers to tell them this is an isolated incident that is not representative of behavior of the thousands of other employees Domino’s and its franchisees have. And company has already taken new strategy in order to make the safety food.

Corporate meeting, magazine and emails

In order to increase employees’ awareness of this incident, the Domino’s leadership should hold a corporate meeting to all the shareholders and franchisees and issue meeting content on the company magazine or email to the employees’ account. This message should more serious and formal includes conducting a review of hiring practices, punishments and new sanitary requirements for food.

Stakeholders | | Social media | Consumers | Know this crisis | YouTube, Twitter, Facebook, website, TV news, The consumerist | | Don’t know this crisis | YouTube, Twitter, Facebo0k, website, TV news, The consumerist | | Loyal consumers | YouTube, Twitter, Facebook, website, TV news, The consumerist, Advertisements | | Potential consumers | YouTube, Twitter, Facebook, website, TV news, The consumerist, Advertisements | Employee | | Email, corporate magazine | Shareholders( Franchisees) | | Corporate meeting |

* Conclusion

In conclusion, this situation will certainly impact the customers of Domino’s Pizza for not consider visiting Domino’s Pizza again. Therefore, it is essential for Domino’s Pizza to respond on this incident seriously and carefully to the public by using the recommendations provided above in order to ensure that their customers did not get any twist insight with this problem and retrieve the confident from their customers to have their products again.

* PART C * 9.0 Team Reflection Report * 9.1 Our team goal and achievement

Our team goal is to work successfully and productively as a team in order to collect as many information as possible to analyze and provide reasonable recommendations to reduce Domino’s Pizza damages (reputation) from the major act of bad publicity. Our team has successfully achieved the team goal by:

Appoint an effective leader
Encourage/ motivate each other
Listen actively
Set a timeframe
Get involved in decision making
Give feedback

These is how our team can build a successful working team and achieved our team goal in accomplished the team consulting report. It is a good decision for us to appoint a right person in our team to be a leader as an effective leader is essential for a team like us to function effectively. Our team leader tried to identify every team member strengths and weakness and used each of the team member’s strengths to allocate the task for the benefit of the team. On the other hand, our team leader has also supervised every member’s progress closely to ensure all members of the team to work towards reaching a team common goal. For example, our team did not worked out at the beginning of doing this report, fortunately, our leader pulled all of us together as a team and provide encouragement and motivation to the group members to get on the right track to complete our goals even when we have no milestone to indicate our progress.

Conversely, every team members were willingly to share and listen actively on each other knowledge, experience and information. Most importantly, we treated each others with supportive and respectful manner. This has helped us to speak up and express our ideas and thoughts confidently, clearly and directly.

* 9.2 Communication challenges

Good communication is essential especially working as a team. We have to commit that communication within our group is unsuccessful as we have different diversification and this mean we have team members come from different country, background, culture and experiences. Therefore, it has leaded us to communication challenges as below: 1. Language barriers - Some of the team members have the difficulty in understanding a message filled with jargon, unclear or mixed information, therefore this has caused communication breakdown. 2. Listening failure – Due to the language barriers, some of the team members cannot be able to understand, absorb and listening to the ideas from other people point of view. Thus, conflict sometimes happened in our team. 3. Lack of communication skills - some of the group members did not participate and tend to be quiet or shy during the group decision making session in the meeting. In order to overcome the communication barriers within our team, we have tried to: 1. Use simple language during the meeting/ discussion 2. Stay focus and listen actively to each team members 3. Avoid overload information in each meeting 4. Give constructive feedback which it could provide a continual exchange of information between group members Generally, we have overcome our team communication barriers successfully by implemented the above method. We are happy to work as a team after all. * 9.3 Group performance

From the very beginning to the end, we did very well in our concentration, team work and responsibility to produce a quality team consultation report and achieve our team goal. The worst part was when the conflict occurred in the team. At one point, conflict was raised in our group when one of the team members misunderstood the requirements of the assignment. In order to resolve the conflict, our team leader diverted the conflict immediately by letting team members to discuss different ideas and treated everyone’s idea with respect and encouraged group members to focus on our ultimate goal. * 9.4 Strategies for team performance improvement In future, our group needs to improve on sharing knowledge and desire to achieve the same project objectives. Besides, we believed a sound leadership knowing the clear goal and target is important in cultivating team spirit. As a leader in a team; he or she should enforce the right amount of power to the member, ensuring each member can work in a comfortable environment. Secondly, a good communication is unavoidable, each member should be given their opportunities to speak and leader should encourage members to contribute. Lastly, each member should be given specific roles or responsibilities based on their strength to avoid any sense of bias or unwelcome.

* 9.5 Team advantages

With this assignment, we could understand working in group is not easy but it is almost unavoidable nowadays. Nevertheless, after the accomplishment of this project, we found the importance to work as a team. From this project each of us provides our own thought and it gave remarkable brainstorming hence it proved to bring out better outcome.

* Reference

Bigus, P., & Seijts, J. (2011). Domino’s Pizza. Richard Ivey School of Business Foundation

Burrus, D. (2012). Did Social Media Play a Role in Obama's Victory? Retrieved from http://www.huffingtonpost.com/daniel-burrus/did-social-media-play-a-r_b_2094145.html

Clifford, S. (2009). Vidoe Prank at Donimo's Taints Brand. Retrieved from http://www.nytimes.com/2009/04/16/business/media/16dominos.html?_r=0.

David G. (2009). 5 Steps to Deal with Difficult Employees. Retrieved from http://www.entrepreneur.com/article/201950

Flandez,R. (2009). Donimo's Response Offers Lessons in Crisis Management. Retrieved from http://blogs.wsj.com/independentstreet/2009/04/20/dominos-response-offers-lessons-in-crisis-management/. Stull, B. (2010). Domino's Pizza and the Viral Video. Retrieved from http://brstull1.files.wordpress.com/2010/01/dominos-pizza-case-study.pdf.

YouTube official website. (2013). YouTube Press Statistics. Retrieved from http://www.youtube.com/yt/press/statistics.html.