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History of Papa Johns

In: Business and Management

Submitted By duerson712
Words 1703
Pages 7
Nicholas Duerson
Whitney Snyder
Business 112
February 24, 2014
30 Years of Papa’s Pizza It all started 30 years ago, when John “Papa” Schnatter crafted the idea to knock out a broom closet inside of his father’s tavern located in Jeffersonville, Indiana (Papa Johns International 1). After receiving a business degree from Ball State University and turning his father’s failing tavern around with an idea of pizza, Mr. Schnatter would wind up selling his beloved ’71 Camero for a $1600.00 investment towards pizza equipment. (Papa Johns International 1) It was that entrepreneurial move which would eventually solidify an excellent business model to launch what is now known as “Papa John’s” and currently the third largest pizza franchise. Taking a look at how Mr. Schnatter rose his company to that achievement; you will see that popular partnerships, international expansion, and a first-class outlook on “quality over quantity” pays out in the long run! Papa John’s was conceived on October 2, 1984, when Mr. Schnatter knocked out a broom closet inside of his father’s tavern. (Papa Johns International 1) The business was nearly bankrupt, but Mr. Schnatter took initiative and planned to sell $5 dollar pizzas and 50 beers up front in his father’s business. It was that entrepreneurial move to start his own business that would keep that drive going. Only after a short and successful year, Mr. Schnatter would open his first Papa John’s store. Papa John’s started franchising their business in 1986, and on June 8th, 1993 the business would become a publicly traded company, which relies primarily on it’s shareholders. Breaking down the company’s motto: “Better Ingredients, Better Pizza: Papa Johns,” (Papa Johns International 1) we see what Mr. Schnatter planned to give his competition, a high-quality pizza that could be delivered to one’s doorstep. With Little Caesars, Dominos, and Pizza Hut dominating 34% of the pizza industry combined, John wanted to deliver a high quality product that would maintain high standards and separate itself from the other franchises. 30 years later, Mr. Schnatter’s franchise would be the third largest pizza delivery chain. The company’s business layout is an interesting one, using a model similar to NORAD’s command structure with a centralized headquarters located in Jeffersontown, Kentucky (Bias 1). Connecting most of its establishments via fiber optic cable, giving the franchise the ability to receive “real-time” data from its franchised locations around the nation. This allows researchers within the company to make changes depending on demand and popularity. Looking at the four resource method, Papa John’s utilizes a lot of their material and human resources. Looking at their material resources, Papa John’s focuses on maintaining a high standard of fresh ingredients which is one of the pillars of success stabilizing the foundation of this successful franchise. Using a commissary system towards its ingredients ensures that the same quality is always met. After moving the headquarters from Indiana to Kentucky, Mr. Schnatter had a commissary built next door that would maintain all the material resources within the company. (Bias 1) Whether it was mixing pizza dough or maintaining spices, this commissary system would ship out its resources throughout the nation to the surrounding Papa John’s locations, keeping the product’s quality high and consistent. Human resources would be dependent for this business to work. With the other top two pizza chains promoting fast delivery of their product, Papa John’s maintained a vast delivery driver system to help promote its product. Along with researchers looking into improvements of ingredients, an aggressive customer service network that kept up on ensuring complete satisfaction of their services, and most of their public company being dependent on their franchisees, Papa Johns utilizes a lot of the human resources required to maintain a top notch franchise. The informational resources used towards the company are networked and updated real time from their headquarters, Papa Johns is able to receive up to date information of product prices, market and price inflation, as well as any hot or cold spots in demand throughout the nation (Bias 1). With the company being a public one, a lot of issues and decisions are made by the shareholders and franchise owners of the businesses around the nation/world. This is very effective because it allows the company to discuss with its shareholders any discrepancies or worries that might arise, while pushing strategy for expansion and popularity growth from advertisements and partnerships from the company. Papa John’s has proven itself as an international player in the pizza game. After opening over 2,000 Papa John restaurants, the business moved outwards and has over 30 stores opened around the globe, with exclusive UK franchises opened throughout Europe (FundingUniverse 1). The business’s stance on its position is focused on a more mature business model with focusing towards more franchisees and overall competition with the other big name pizza chains to always bring the freshest pizza with the best ingredients, every time to their customer. Along with expansion and partnerships with other popular companies, Papa Johns is steamrolling ahead with an aggressive advertising campaign. Globalization usually has rippling effects towards companies and businesses that deal with international import/export of goods and materials. With the U.S. teetering on financial collapse, an always changing global schoolyard mentality full of sanctioning and increased taxes, and the constant push for better materials and products, globalization hasn’t been too difficult with Papa Johns. Within the nation, the commissary system along with the rise and fall of cheese and dough prices maintains a fairly level financial track record, but internationally, it is a whole different story. The chain established a very strong presence in the UK and Cypress, opening up their UK version of Papa Johns, but sadly in the end was forced to shut down all of their operations in Portugal due to bankruptcy from one of the franchisees (Bias 1). Looking at Papa Johns from a S.W.O.T. Analysis, you get a clearer sense of what the company is trying to gain and what direction they are trying to advance towards. We will knock out the strengths of the company first hand. Some of the examples in this category are solid partnerships with big name brands, the staple of high quality ingredients, strong employee training and restaurant placement strategy, and online presence. Papa Johns was the first to introduce online delivery, offering an interactive and exclusive experience that Pizza Hut and Dominos soon thereafter followed suit and made available for their businesses. The partnerships we see with NFL and Payton Manning (whom himself owns 21 franchises) play a pivotal role in the advertising campaign (FundingUniverse 1). Some of the downfalls play back to the set-up scheme of Papa Johns itself. The fact that Papa Johns is mainly “franchise based” puts a lot of weight on the future success of the company. Looking at the other two competitors, the number of stores the three pizza giants have open yield different results. While Pizza Hut and Dominos have thousands of stores open, both domestic and internationally, Papa John’s has a far more less amount than the other two. Limited menu items might possess a future issue, with the pizza fast food market being soo competitive and fierce. Some of the opportunities that exist can be thanked for what Papa Johns initially was the first to offer, and that is online delivery. Not just the delivery aspect, but with the technological advances of the world, coupled with the social media fever in today’s culture, advertising and expansion of technological avenues will offer room for a greater customer growth. Even though the US is dealing with a roller coaster-esque economy, Papa Johns might look to improve and push their international presence. With globalization playing its part, many nations that did not have the luxuries of fast food pizza will yield positive results from bringing new product to a new client. The threats that might befall the company come from within. Whereas our market is periodically in a state of collapse, that tends to inflate prices for materials and manpower. A shaky economy might threaten expansion of a growing market. Speaking of markets, the intense competition of the fast food pizza industry might prove as a roadblock, with new businesses offering cheaper deals and competitive pricing, that might be perceived as a threat to a matured business. Lastly, with our economy becoming “fat sensitive," the stigma of fatty pizza, fast food, or unhealthy eating always looms in the shadows. One can’t forget the Public Relations “fubars" that might plague a business. We have seen soo many great companies fall because of statements or opinions that reflected negatively against themselves. With recent “Obamacare” opinions with racially insulting undertones given by Papa Johns employees, the company has been playing a damage control assessment to ensure that the name has not been tarnished, while proper apologies coupled with exclusive offers to repair their insults are given in an exceedingly quick manner. To sum up the highs and lows of this report, Papa Johns is the prime example of the american dream. One persons idea to expand a market and push for a high quality product grew into an international sensation with massive promotions from trusted sponsors. The commissary system, the fiber-optic connected hierarchy, and constant vigilance towards 100% satisfaction give the company a solidified foundation to remain a formidable competitor among a fast paced market, constantly changing. To watch a business grow from a person’s dream to a publicly owned company shows that sometimes it pays to take the long road. “Better Ingredients, Better Pizza, Papa Johns.” Mr. Schnatter has proven himself to confidently display that slogan amongst his rivals for a reason, that he never settled for a cheap product.

Works Cited
"About Papa John's." Mission Statements. Papa Johns International, 2014. Web. 21 Feb. 2014.
Bias, William. "A Strategic Look at This Pizza Company." http://beta.fool.com/stockdissector/ 2013/06/07/a-strategic-look-at-this-pizza-company/36420/. The Motley Fool, 7 June 2013. Web. 23 Feb. 2014.
"Papa John's International, Inc. History." History of Papa John's International, Inc. – FundingUniverse. International Directory of Company Histories, Vol. 71. St. James Press, 2005., 2005. Web. 19 Feb. 2014.

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