Dominos Pizza: A Crisis Management Case

Dominos Pizza A Crisis Management CaseJosefina VasquezAccording to (PRSA, 2009), in 2009, the order Dominos pizza see a tremendous PR crisis because of a couple of their employees. In fact, in a restaurants kitchen, in a slow litigateing day, the dickens of them, with the employee uniforms, contaminated around food ingredients and then placed them onto sandwiches and pizza they recorded a video and later posted it on YouTube. This video reached more than one million views in just three days because it became viral. The company realized that social media has the power to turn small incidents into huge food marketplaceing crises.This is a real case precise interesting to analyze from the point of view of public relations and ethics. Because something simple could be the cause of the failure or success of monumental companies, and what would construct the loss are the decisions taken in crises. In this review, we will be looking at this case from the point of view of the publ ic relations professional and the respectable bases and how this addresses companies direction.Dominos Pizza A Crisis Management CaseAccording to (PRSA, 2009), the vice president, the communication team and the rest of Dominos corporate members sooner became awarfaree of this situation. The scratch line reaction was anger, but they channe direct into action. The company proceeded to intercept the store, the authors of the video, took away the videos, and the company pressed charges against them. One of the first actions was to find out if the contaminated food was finally delivered to a client, fortunately, it was not. Domino has had the plan to introduce the company to Facebook, Twitter and some other social media sites by 2009 just before the crisis, but they did it during the crisis in order to cash in ones chips with the active core audience. The CEO decided to the response by YouTube instead of distributing a press release because even at a million views, they belief there were 307 million people in America, so they focused on that audience. They received criticism from the media during the first twenty-four hours, because people thought that they were not doing anything approximately it. The company infrastood that the most important thing was to keep the companys credibility with customers. Dominos pizza learned that is so important to keep in position with media web community all times. (Randallreilly.com, 2015) stated that the company listened to their audience and later they admitted that their product was awful, so that, they started a campaign called Pizza Turnaround, in order to feel a go at it the problems they were facing and reinvent their pizza, this along with an extensive media coverage, documentaries, promotions, advertising, etc.Problem Statement.The companys PR team seemd an important challenge. The company had a disadvantageous place ascribable to the lack of presence on social networks. Dominos faced the dilemma of obviating persons opinion by denying, and only focus on defending their tick off or putting on the customers side and reinforcing their product. This crisis could have undermined this large multinational company, so they had to deal with some ethical principles such as fairness, honesty, expertise and loyalty. individualized Critique of the Case.In this context, is important to point out the contradict attention life cycle c at one timept from (Wilcox, Cameron and Reber, n.d.) which has a proactive, strategic, reactive and reco actually phases, and the way the companys PR professional applied it during this situation. The proactive phase involves crisis-planning, issues tracking by creating strategy plans in ways that address the emerging issue. The strategic phase allows organizations to place itself favourably in anticipation of actions. The reactive phase occurs when the issue or conflict reaches a critical level of impact it involves the implementation of crisis management plan, cris is communication and conflict resolution. The recovery phase involves reputation management and image restoration.PR professionals at Dominos pizza implemented both the reactive and recovery phases as well(p), once the issue became critical. They initiated a crisis management plan by showing communication channels with the target audience through social media. They also implemented reputation management and image restoration when they decided to reinvent their pizza with a campaign called Pizza Turnaround by using an extensive media coverage, documentaries, promotions, advertising, etc. Once the crisis was overcome, they started implementing the proactive and strategic phases of establishing constant communication with customers through social media channels, with a strategy to pay special attention to customer feedback.ReferencesWilcox, D., Cameron, G. and Reber, B. (n.d.). Public relations.PRSA. (2009). Dominos Delivers During Crisis The Companys Step-by-Step solvent After a V ulgar Video Goes Viral. online Available at http//apps.prsa.org/Intelligence/TheStrategist/Articles/view/8226/102/Domino_s_Delivers_During_Crisis_The_Company_s_Step.WNMO7PkrLIV Accessed 23 Mar. 2017.Randallreilly.com. (2015). Dominos Pizza A Case Study in Customer Feedback Randall-Reilly. online Available at http//www.randallreilly.com/dominos-pizza-a-case-study-in-customer-feedback/ Accessed 23 Mar. 2017.Tesco and Sainsburys A Comparison of StrategiesTesco and Sainsburys A Comparison of Strategies1. IntroductionBusiness strategies are largely unique to individual championship organisations and depend upon the objectives of their primary stakeh olders, namely the share leters and the senior management. bandage these two entities are the main decision makers for the road maps followed by firms, which they exercise through formulation and stick of objectives, mission statements, and strategies, many other issues like product or service features, strengths and weaknesses of line o f business organisations, economic, legal and semipolitical environments, nature and intensity of competition, opportunities and threats, environmental and ecological needs, as well as technological advances, often play major roles in determining and implementing business strategy. Work in these areas, by management experts, have led to the development and construction of models and theories that attempt to elaborate, explain and demystify these issues. The tackling of these challenges previously depended upon the thought processes and ingenuity of business owners, and played vital roles in the successes or failures of business organisations. The work of Igor Ansoff and Michael Porter led to the enunciation of well known strategic models for growth and the Five Forces theory for abbreviation of competitiveness. These tools, as well as decision making aids like SWOT and PESTLE crumples have become commonplace in todays business scenario, and are widely used by managers all over th e world. While most growth strategies deal with marketing, other areas like production, human resource, information technology and finance also need conclusion setting, and are important to overall strategy for optimisation of organisational wealth. Total Quality Management, for example has emerged in recent days as a necessary concomitant in every strategic managers toolbox for achievement of organisational objectives. Apart from these tools, business strategies for growth and shareholder wealth appreciation are also influenced by the ethics and value systems of individual corporations while many firms chose to forsake both growth and profit big businessman for ethics, the reverse, as evinced by scams like Enron and WorldCom is equally true.every so often, companies in the same industry, and operating in the same national or global environment, adopt sharply different strategies with spectacularly divergent results. assay engines like Yahoo and Alta Vista existed for years befo re Google arrived on the scene and swept everything before it. Toyota, a Japanese car manufacturer, formed practically afterwards the end of the Second World War, entered the car market of the United States in the face of widespread scepticism, and over a few decades, orchestrated a business strategy that saw it overtake Ford, the iconic American car making giant. Among British companies, the last two decades saw the rise and rise of the retailing company, Tesco. The company varyd its down market pile them high, sell them cut-price public perception to emerge as the largest retailer in the country, first overtaking the much older market attractor Sainsburys and then proceeding to widen the gap until its market share was twice that of its erstwhile condescending rival. This assignment aims to examine and analyse the different strategies adopted by these companies, which have similar products and services, and also operate in the same environment.2. Commentary and AnalysisBusines s organisations constantly face challenges in every sphere of activity, be they in marketing, sales, production, workforce, human resource management, information technology development, or in raising and controlling finances. Many of these challenges arise from the social, political and economical environments in which organisations operate. While businesses in the UK operate in democratic and market friendly environments with institutionalised legal and financial systems, they need to conform to the stipulations laid down by numerous regulatory bodies (of the UK and the EU) and governmental organisations, and that too in almost all operating areas. Furthermore, firms with global operations have to frequently fly the coop in conformity with different environmental requirements, necessitated by dissimilar political and legal systems, or by widely divergent local, infrastructural or market conditions. Sainsburys and Tescos both entered the UK retail market, as small convenience sto res, not much different from the many such establishments that exist all over the UK. both(prenominal) organisations outgrew and outperformed other businesses in their genre to become colossal retailing chains with countrywide presences. Sainsburys, a much older firm than Tescos was the market attracter in the UK retailing sector, until 1995, when it was overtaken by Tescos.a. SainsburysJ Sainsbury, plc, is one of Britains most famous firms, represented across the country, through its chain of supermarket stores that operate under the Sainsburys brand. Apart from supermarkets, the company operates convenience stores, an net income-based basis delivery shopping service, and Sainsburys Bank. The company, originally started as a partnership in 1869, and while corporate as a private company as far back as 1922, listed on the London Stock Exchange only in 1973, in what was until then the LSEs largest stock issue. Sainsburys grew to become the UKs largest supermarket company and hav e goted its privileged position for much of the twentieth century. Tescos overtook Sainsburys in 1995, and ASDA/ Wal-Mart relegated it to third position in 2003. (J Sainsbury, 2007)While the business, in the beginning, grew organically into a chain of convenience stores, its first major strategic decision came, in 1950, with the commencement of the first self service store, in Croyden, London. This initiative was followed by change magnitude the number of self service stores, expanding the range of non food goods, opening of hyper markets, acquisition of little chains, and commencement of operations in Scotland and North Ireland. The company grew to become the countrys largest supermarket chain, fuelled by increase economic affluence, changing buying habits, customer convenience, and the ability of Sainsburys to provide a large and diverse range of products under one roof. Large Sainsburys stores typically stock 50,000 products, of which 50% are home brands. While the company gre w slowly in its initial years, real growth came only in the post war years, with the development of a strong market economy, economic prosperity, increased spending power, and customer desire for a large range of better quality goods. Sainsburys responded to this changed economic environment, by concentrating on the increasing and upwardly mobile middle class. The company refrained from taking too many risks or initiatives, possibly feeling that its reputation would enable it to grow steadily and retain market leadership. The strategy of least resistance was interspersed by a few initiatives like the introduction of Do it Yourself (DIY) products, and acquisition of chains like Bells Stores, Jacksons Stores, and JB Beaumont, which served to add to and broaden its customer base. The company has more than 750 stores today, and with a turnover in the range of 16 billion GBP, is one of UKs more successful corporates. A prima facie assessment regarding the companys response to business an d environmental challenges would tend to give credit to the companys corporate strategies in an extremely competitive business environment.This assessment would however be substantially incorrect. Even as the company continued to grow steadily, in both profits and sales, through the 1990s and into the 21st century (except for the difficult years of 2004 and 2005), it was overtaken, first by Tescos in 1995, and later by ASDA in 2003. Tescos , which had a turnover of less than 11 billion GBP in 1994 saw its sales touch 38 billion GBP in 2006 and now sells more than twice of what Sainsburys does. Very apparently, Sainsburys has committed serious errors in handling and responding to business and environmental challenges, and has yielded the high ground in supermarket retailing to jr. and possibly more effective competition.b. Tescos Growth PathTescos started off as a small one man grocery operation, in 1919, in Londons East End. It took Jack Cohen, the beer, 10 more years to start his first store, in 1929, a full 60 years after Sainsburys. The company grew organically in the initial years, spurred by Cohens hard work. In the beginning business strategy revolved around providing cheap and economical goods, (pile them high, sell them cheap) espousal of trading stamps to induce customers, and relentless opening of spic-and-span stores. Strategies, broadly similar to those followed by Sainsburys in the post war years led Cohen to open Tescos first self service store in 1947, and the first supermarket in 1956. In retrospect, Cohens better collar of the demands and changing moods of customers is possibly evinced by his decision to open his self service store, a full three years earlier than Sainsburys.When Cohen resigned, in 1977, the company had achieved epochal growth and traction but was still much behind Sainsburys, both in size and reputation. The years that followed Cohens handing over of Tescos leadership were tag by strategic swings designed to take the com pany away from its image of a purveyor of cheap and low quality goods. This period saw the management give an aggressive campaign for market share, a multi dimensional effort that involved (a) rapid expansion of stores, (b) acquisition of medium sized supermarket chains, (c) entry and consolidation in a number of foreign markets, (d) large scale expansion of non food products, (e) opening of a number of hypermarkets, (f) introduction of loyalty cards, and (g) exploitation of online markets. The company assessed the lively national and global environment and felt that it would be able to work towards significant increases in sales and profitability and make it into a global leader from its status of a lowly down market UK based retailer. These strategies, combined with effective systems and operational implementation, enabled Tescos to power past Sainsburys, the British market leader, and establish itself as the third largest retailer in Europe. With sales of 38 billion GBP and 2 b illion GBP in profits, Tesco is today the undisputed market leader, way before of both Sainsburys and ASDA. It played for glory and won hands down. (Pringle and Cohen, 2007)c. Management of Environmental ConditionsIn the early 1960s, Cohen lobbied Parliament to have the Retail Price attention (RPM) act abolished, efforts supported by Edward Heath. The RPM allowed manufacturers and suppliers to set the price of goods thus preventing large retailers, who could buy in bulk and had greater buying power, from benefiting from economies of scale and undercutting the prices of small shops. To get around this, Tesco offered another incentive to get customers through the doors Green Shield Stamps. These were collected by customers when they spent money in the store, and were then traded for goods in a catalogue. An effective discount (Tesco, a corporate profile, 2004)This extract serves to illustrate Tescos response to environmental challenges and the many innovative ways the company foun d to constantly improve customer value. The emergence of Thatcherism, in the 80s, coupled with the break up of the Soviet Union, the consolidation of a unipolar world, sharp improvements in internet technology, and the commencement of globalisation, created a number of opportunities that Tesco was quick to spot, grab, and exploit. The company closed down 500 stores, revamped and modernised hundreds of others. Store formats like Tesco, Tesco Express, Tesco Metro, and One Stop, catered to distinct sizes, products, and locations, and ranged from small roadway corner shops to huge all comprehensive supermarkets. The company was quick to realise that its image as a purveyor of cheap products, with its perceived down market connotations, would not help growth in a society that was rapidly becoming richer, and did not hesitate to close down its coupon scheme. In a brilliant segmentation exercise, the company created three product categories, good, better, and best, across most of its pr oduct lines. While this enabled customers to access different price ranges, it also allowed the company to access an inclusive and huge market. Sainsburys, which had traditionally catered to the middle class clientele with zealously protected margins, tried to enlarge its product base, but was unable to make any headway, because of its lesser supplier base and inferior logistical capability. (Pringle and Gordon, 2007)Tescos introduced customer loyalty cards in 1995. While it took Sainsbury some time to catch up with the idea, the two companies used it for widely divergent aims. Even as Sainsburys used the cards primarily to drive repeat visits and purchases, Tescos processed the information feedback from the loyalty card customers, to assess customer demands and needs, and keep on adding to its product range. The company also foresaw the potential of the internet and globalisation, and established profitable online sales channels, as well as successful overseas forays. Tescos intern ational business now accounts for nearly 25% of company sales, and the immediate priority is to drive it up to 50% of company revenue. Apart from maintaining strong market leadership, Tesco is now focussing on two major areas that are propelling the companys growth and increasing the gap between the company and its competitors. Its aggressive growth in the non-foods market means that it is possibly selling more clothes than Next and more wellness and beauty products than all the others put together. (Hunter, 2006) The company has set up base in numerous countries in Europe and Asia and should soon have a significant presence in the USA. Indeed, some 60% of Tescos floor space is now based outside of the UK. (Hunter, 2006) Sainsburys, on the other hand has been too finicky handling its inadequate stocking mechanism, half empty shelves, and falling market share, to be able to pay much attention to new thrust areas, and opportunities, made getable by changes in environmental condition s and advances in technology. (Tesco, a corporate profile, 2004)3. ConclusionWhile this analysis does not intend to eulogise Tescos management practices, or its planned and meticulous exploitation of available opportunities, the stark difference in the working of Tescos and Sainsburys tend to make any comparative analysis of strategy, and management practice, enormously one sided. Even as Tesco was using feedback from its loyalty card scheme to add enormously to its product range, Sainsburys was trying to adamantly protect its margins and cutting down on service quality, practices that inevitably led to further customer dissatisfaction and loss of market share. It was not until 2004, a full 9 years after Tesco overtook it, that the company realised that its major problem lay in under stocked shelves, inadequate logistics and poor supply chain management. While Sainsburys strategy come forwarded to be one of risk avoidance and slow growth, in reality it proved to be akin to that of an ostrich in the face of danger. The company however still remains a respected and successful retailer. Recent initiatives, taken after a change in top management, have seen a priority shift and led to revived sales, reduced costs and improved profitability. The company has its heart in the right place and contributes a much higher percentage of its post tax profit to charity than Tesco.The tremendous success of Tesco, in assessing customer needs and environmental opportunities, came about because of a new aggression that evinced itself after the departure of jack Cohen and is an indicator of the possibilities that exist for Sainsbury. The fact that Tesco lagged behind Sainsburys until 1995 is proof of the levels to which Sainsbury can aspire without being impractically optimistic. Sainsburys has a number of strengths, namely its goodwill in the UK market, access to enormous amount of shop space and property that have been built up over the years, very strong domain knowledge in th e retailing business, and adequate capital resources. The company has also become active in the online segment, the fastest growing market segment in the retailing market. It however definitely needs to scan the environment constantly, look for new opportunities, upgrade technology, and be more fleet pick in responding to opportunities and challenges.Both the companies have seen rapid departures from existing strategies after changes in top level management. Strange as it may appear, changes in management appear to have been critical to Tesco seeing opportunities that were not explored earlier. Sainsburys too has commenced implementation of measures that should have logically been done much earlier, only after a change of guard at the top. The solution to the paradox possibly lies in realising that management theories, practices and strategies, in most cases, become relevant only if the CEO thinks them fit. 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