Domino’s is an American multinational pizza restaurant chain, which is heavily popular all around the world. Domino’s was founded in 1960 in Ypsilanti, Michigan, United States, and quickly expanded its operations around the US and then the world.
It was not all a happy journey for the pizza brand as they have their fair share of ups and downs before reaching where they are today.
Domino’s was at a record low in 2008 with $2.83/share and in 2020 their current stock is at $367/share (130,000% gain). So, what happened?
0/ The Domino’s pizza turnaround is one for the ages:
2008: Hits record low $2.83/share
2020: Current stock at $367/share (130,000% gain)
The 100x+ growth story is filled with a bunch of lessons for startups today.
Let’s dig in.
— Romeen Sheth (@RomeenSheth) February 24, 2021
When 23-year-old Tom Monaghan launched Domino’s in 1960, he was maniacally focused on fast delivery and great service from Day 1. He spent the early days taking every action required to:
– Reduce delivery time
– Reduce cooking time
– Increase distribution
But by 2008, Domino’s scaled to a multi-billion-dollar business but had dim prospects as growth completely stalled and they started to face firm competitive threats from Pizza Hut (and others).
The company has $1B of debt on its balance sheet and the new customers just weren’t coming in the doors.
The problem was with Domino’s ‘Pizza’
When the company started focus groups in 2007-2008, the feedback was alarming as customers said “Domino’s tastes like cardboard”, “Totally devoid of flavor”, “Sauce tastes like ketchup”.
J. Patrick Doyle, the CEO of Domino’s leaned in hard to the feedback and launched a legendary ad campaign: “Our Pizza Sucks”.
Doyle then just committed that a $5B+ global pizza company was going to radically reinvent its Pizza. Everyone was in the saddle including the Supply Chain, logistics, marketing, culinary, partnerships, franchises, and IT.
The culinary team began the project to rebuild the recipe from the ground up. They tested 7,500+ combinations: Crust (10) * Sauce (15) * Cheese (50). And this doesn’t include re-testing / calibrating every individual ingredient.
Domino’s reinvention was a huge success. Customers loved the new recipe and each additional new product they rolled out was met with similar satisfaction.
Doyle’s move was transformational enough, but it created 2 other shockwaves that will have many longer-lasting effects:
- Internally – broke the false dilemma (speed OR quality)
- Externally – showed customers they cared. They responded to feedback and built it in public.