PAPA JOHN’S PIZZA AND ECONOMIES OF SCOPE 1
Papa John’s Pizza and Economies of Scope
MGT407, Unit 4
Patten University
PAPA JOHN’S PIZZA AND ECONOMIES OF SCOPE 2
Papa John’s Pizza was founded in 1984 by John Schnatter, whose goal was to make high- quality pizzas and deliver them – something unusual back then. This company is typically ranked currently as the third largest national pizza chain, with franchises expanding outside of the
United States. When a business is expanding, one thing worthwhile to study is economies of scope, in order to see why and how the expansion happened in looking at daily operations and average costs to produce these fine pizzas.
An economy of scope is a proportionate saving gained by producing two or more distinct goods when the cost of doing it is less than the cost of producing each good separately. Economies of scope (it’s used in the plural) focus on the fact that the average total cost of production decreases as a result of increasing the number of different but compatible goods produced. In other words, as the company increases the number of items it offers at very little extra cost to itself, the average cost to produce each item drops, making all the items more affordable.
A study of the menu in a Papa John’s restaurant demonstrates how economies of scope work.
Mr. Schnatter (Papa John, as he calls himself in his commercials) started the business model with a few pizzas that he made in the broom closet of his father’s bar. He started with
Papa John’s competitive strategy is along the lines of the Porter and the Miles and Snow typologies. Michael Porter typology focuses on two things, they are to serve the market industry in its entirety or concentrate on a specific part of the market industry. Papa John’s competitive strategy is along the line of the Porter typology because they focus on a specific part of the pizza restaurant industry not the mass pizza restaurant industry. The Miles and Snow typology questions if a business unit should low cost strategy like its competitors or use the differentiation strategy and be unique. Papa John’s competitive strategy is along the line of the Miles and Snow typology because they focuses on the unique high quality of its products by
which seeks to achieve maximum efficiency and, if a suitable supply and demand is established,
Jim Treliving One of the first franchisees and a great example of a team leader is a former RCMP officer, In addition to his professional experience and seniority as the president and chief executive officer of Boston’s The Gourmet Pizza Company, the U.S. arm of Boston Pizza, which is headquartered in Dallas, Texas, Jim is active in benefiting the community. He has been a director of the Boston Pizza Foundation since its beginning in 1990 and has helped collect and donate over $14 million to Canadian charities. He is also one of the cast members of the CBC program, Dragons ' Den, which inspires entrepreneurs.
In 1978, John Mackey was twenty-five years old and he and his girlfriend, twenty-one-year old Renee Lawson, borrowed $45,000 from family members and started a small food store in Austin, Texas. This store, Safer Way Natural Foods, specialized in natural
and in his free time he made anything he could think of out of wood and play games with his
Is there a way to estimate the cost of services and product to customers such that Stuart’s Branded Foods can be competitive in their market? Use the illustrations of the two customers to demonstrate your approach. What would be the selling price per kit or per cup for each customer?
The first Jimmy John’s was created in 1983 in Champaign, Illinois, by Jimmy John Liautaud. Liautaud founded Jimmy John’s on the idea of providing the gourmet sandwiches for a low price. The first Jimmy Johns was run out of a garage with used equipment, and without an ice machine for the drinks because there wasn’t any room. Liautaud grew interest in his sandwiches by giving out free samples to people around town, especially college students. As word spread about his sandwiches, Jimmy John’s began to gain acclaim and began to make money. (Gibbs, 2005)
In 1983, Jimmy John Liautaud perfected his award-winning bread and opened up his first Jimmy John’s restaurant. Jimmy John did not have a lot of money to start out his company and he was even unable to pay for an ice machine in his restaurant. His goal to expand the restaurant was to go around sampling his sandwiches and letting customers know about his cheap prices and that he delivered. This is still something the company is prided on
Zoë’s Kitchen is a successful restaurant in a new segment of a matured restaurant market. This company creates an at home atmosphere for the consumer to give the perception of an at home meal. There are a lot of competitors within the market and for just this company alone. Though, Zoë’s is differentiated enough as a whole to not actually have a true competition. There are upcoming threats in the fast-casual market from fast-food chains entering the market through mergers and adding healthier foods to the menus. The purpose of this analysis is to inform and forge a conclusion of what this company should do about its future.
1) The scope of any economy is that of creating a balance between its exports and imports, or exporting more than importing, in order to generate national gains and revenues. Within the United States however, it has often happened that the totality of the imports exceeded the totality of the exports. The result of
As a result, the company would then be able to maximize profits and produce its product in optimal amounts so as to satisfy consumer demand effectively.
* For the pasta we can see (exhibit 6) that 26% of total surveyed persons perceive it as a fresh product, only 8% think its price is too high, and 61% found nothing dislikable in it.
Pizza hut was founded in the late 1958 by Frank and Dan Carney, two brothers who approached a household friend to
The Papa John’s case provides a classic example of a company that entered a highly saturated and mature market and was able to enjoy immense growth and success due to its creative product differentiation strategy. The company’s motto has been consistent from the day the first restaurant was opened: Superior ingredients and a superior product from its competitors. John Schnatter took the basic concept of product differentiation and positioning to new heights as he created a strong global brand, which had an unprecedented track record of success and customer loyalty over its competitor’s pizza products.
Pizza Hut got their start in 1958 when two brother borrowed $600 from their mother open a pizza place in Wichita, Kansas. Since, then Pizza Hut has grown from just one pizza place to having them in over 100 countries today. I believe what make this pizza company so successful is their hospitality and their quality of food.