Domino’s Pizza Japan: Fortressing or Market Expansion?

In late 2018, the chief executive officer and president of Domino's Pizza Japan Inc. was convinced that a substantial expansion in the Japanese market was needed and feasible for continued growth. His company had already grown to nearly 550 stores across Japan, which was over double the number only five years earlier. The company had numerous opportunities to grow further, including opening new markets; opening stores closer to the company's customers; and building on customer insights, new menu offerings, and a new marketing approach. In particular, the chief executive officer wondered whether priority should be given to new markets in Japan that the company had not yet entered, or if priority should be given to greater penetration in Japanese locations where it already operated. What strategy was the best option for expansion in the Japanese market?

This case is appropriate for students in strategy, marketing, and international management courses at both the undergraduate and graduate levels. Domino's Pizza Inc. has developed various sophisticated and innovative approaches, which can be better appreciated by students in latter parts of these courses. Historically, the company had been focused on speed of delivery to the customer, which requires an even more micro approach than the traditional emphasis on the level of country to state or province to city. The company has developed a complex and integrated model for density of store locations within select cities. This approach, which is challenging to implement, can be highly difficult for competitors to replicate. After working through the case and assignment questions, students will be able to<ul><li>illustrate the use of speed as the basis of competitive advantage;</li><li>develop an understanding of the trade-off between geographic concentration (i.e., fortressing) and geographic diversification (i.e., frontier markets), with a focus on within-city concentration versus cross-country diversification; and</li><li>examine sources of innovation, whether at the level of the home country, specific subsidiary, or major business unit.</li></ul>

• international
• location
• innovation
• speed
• market strategy
• subsidiary