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Papa John's Case Analysis

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Papa John's
In a narrative format, discuss the company from a strategic perspective. Information concerning recent changes in the firm is readily available online and should be accessed. Strategic issues should be discussed in "real time."
Papa John’s International was founded in 1984 when John Schnatter delivered his first pizza. The company now has nearly 4,200 locations, with operations in all fifty states and thirty-five countries (About Papa John's). To separate themselves in a crowded pizza market Papa John’s has always stressed a higher-end product by touting their ingredients that results in a superior pizza. The company’s strengths include the aforementioned quality ingredients, as well as an internal commitment to their employees by offering industry leading training programs aimed at providing the same consistent service to their customers. They also have an innovative marketing plan that reaches across the United States, specifically targeted for each location where the store has a location. They have also begun partnership with the National Football League and Pepsi to increase their presence during the 2013 football season through in-game promotions and social media activations (Papa John's Tops NFL Alliance With NFL Network 'Thursday Night Football' Campaign , 2013). The biggest strategy advantage Papa John’s has over their competition is the small amount of capital needed to invest in store location. Each space is designed for only carry out orders cutting overhead that may exist in a larger building. The smaller space also allows for an efficient process while making their product. Their weaknesses include a lack of locations to compete with the larger players in the industry. While they have added more menu items in recent years, Papa John’s menu lacks some of the additional offerings available at national pizza companies, as well as local and regional establishments. While these are weaknesses, they are also opportunities for Papa John’s to grow their revenues. While they have established themselves as the “quality” leader in pizza there is significant opportunity in the wing and dessert markets for carry out products. The push for fresher, healthier food poses a threat for the pizza industry as a whole, but specifically Papa John’s as others in their market have begun to establish healthier options.

What has been Papa John's key to success since its inception? Provide evidence for your answer.
Since the company started, the key to Papa John’s success has been the company culture and investment in their employees (Our Key to Success). They have invested in model that empowers their employees to serve their customers daily with consistent service. They have stayed consistent with these goals and aligned their service with their quality products, all while holding each employee accountable and offering training opportunities on selling and communication methods. It’s important for a company with so many owned and franchised locations to be consistent in their messaging and focused on preparing their team to focus on the main thing they do well, delivering a superior quality pizza over the competition (Our Key to Success). This investment has led the company to be recognized as the number one pizza retailer for customer service. Their customer satisfaction rankings are tops among national pizza chains in the American Customer Satisfaction Index (ACSI) survey and have been honored as the best in twelve of the last fourteen years (Papa John's Thanks America for Voting It #1 in Customer Satisfaction, 2013). Finally, the strategic positioning the company has committed to, ‘better ingredients, better pizza’ has enabled them to become the industry leader in emphasizing a quality product. From dough that’s never frozen to meat with no fillers, Papa John’s product is a cut above the industry.
How has the retail pizza industry changed over the past decade? What changes do you anticipate in the next decade?
Technology has changed the market tremendously, making it easier than ever to order a pizza from the keyboard of a laptop or smartphone. The rush to have everything at the fingertips of consumer’s customization is extremely important. In the past it may have been fine for a pizza establishment to offer only pizza, with perhaps two different crust types, and that’s all. Now, just for pizza, consumers have the option to customize their toppings from a wider selection, choose more crust types, the kind of sauce and how much of it, and whether the end product is to be delivered or available for carryout. The expansion of menus has also changed the industry to meet the breakneck speed of life so many consumers are a part of. In 2012, “47.5% of all American married couples are dual-career couples” (Coleman & Coleman, 2012) meaning there is less time at home to prepare meals the way people want them. Pizza has been a staple in many American homes and now that the option to customize is more readily available, it’s changing the landscape of the industry. Over the next decade advances in technology will enable this customization to be easier on the end user but also help in delivering a product much easier to the end consumer. From automated delivery to reward programs, technology will always push the envelope to seemingly make it easier for someone to order a pizza. The biggest change will consist of a healthier product for consumers. With a shift in health in the United States, it’s possible others in the industry will follow Papa John’s lead and begin to work with fresher ingredients and, along with them, develop healthier product options.
Identify the three greatest strategic challenges Papa John's currently faces. Explain each in detail.
For the pizza giant, the main challenges they will face in the future center around health and the competitive market in which they operate. It’s been referenced the company’s commitment to service and how well they perform in satisfaction surveys, so it’s safe to assume they will continue to invest in those working for them. The environment is changing where more and more people are at least investigating the option of healthier products. Many organizations in the food industry have had to make adjustments to their offerings in an effort to better serve a certain demographic. While a pizza may be considered a “cheat” item on the menu of a healthy American, there’s an opportunity that exists. The competition, mainly the Papa Murphy’s chain, is primed to capitalize on this opportunity. While Papa John’s has sold themselves on using betting ingredients to create a better pizza, others have ventured into this arena to get their share of the proverbial pie. Pizza isn’t a “health food” item but it can be prepared in a healthier way. Only a long-term commitment to these options will show if the changing culture in America favors health. While I don’t think segmenting a menu between traditional offerings and new, healthier options, is a win for Papa John’s, I do feel the overall health of the consumer is more important.
The competitive has two fronts in which the market can change: nationally and locally. The barriers to entering the pizza industry are relatively low, from a local perspective. To become a national player to compete with Pizza Hut, Domino’s, Papa John’s and others, the barriers become a little tougher to overcome. While not completely relevant, there is some correlation between analyzing the pizza industry and Porter’s model. The model “provides insight into profit-seeking opportunities, as well as challenges, within an industry” (Parnell, 2014). For these reasons alone, this model is useful, especially in analyzing the pizza industry and the competitive nature of it. While the internal environment is key to the success of any organization, the third model outlines the external environment that can influence the industry (Parnell, 2014). This is especially important where price and product offerings can influence organizations and their short-term objectives as they strive for long-term success.

Papa John's Thanks America for Voting It #1 in Customer Satisfaction. (2013, August 5). Retrieved October 24, 2013, from
Papa John's Tops NFL Alliance With NFL Network 'Thursday Night Football' Campaign . (2013, September 13). Retrieved October 24, 2013, from
About Papa John's. (n.d.). Retrieved October 25, 2013, from
Coleman, J., & Coleman, J. (2012, July 27). How Two-Career Couples Stay Happy. Retrieved October 24, 2013, from
Our Key to Success. (n.d.). Retrieved October 24, 2013, from
Parnell, J. A. (2014). Strategic Management: Theory and Practice. Thousand Oaks, CA: SAGE Publishing.

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