Papa Johns

PAPA JOHN’S

Papa John’s founder, John Schantter wants to get back to rapid growth where the company is expanding 200 to 300 stores a year domestically and 6 to 7 thousand worldwide. How can John achieve this while maintaining profitability? Papa John’s has been going since 1985 and since then competitions and the economy has changed. Does John need to consider changes in corporate strategy? Papa John is trying to reduce the number of corporate-owned stores to reduce the cost of leasing along with controlling the volatile price of cheese, which consist 30 to 40 percent of Papa John’s food cost. By selling one of the store to a new Papa John franchise owner, the cost is passed over to the franchise owner, hence lowering the cost. Papa John’s were also able to control the volatility of cheese’s price by partnering with BIBP Commodities, Inc. While John would like to grow to 6 to 7 thousand stores worldwide, does he have the capabilities to achieve this?

My recommendation is for Papa John’s is simply focus on maintaining core competencies as well as diversification. One of the problems include competition for take-outs. More full-service restaurant is now utilizing take-out orders. With a full service restaurant, customers can get whatever food they wish to consume instead of just pizza. Same is true for fast food restaurant with having more options on their menu. Diversifying the brand by adding different meal such as hot sandwich, and in this case, chocolate pastry delight will attract customers because they now have choices. Papa John’s could move into strategic acquisitions to reduce the impact of competitions.

Core competencies are John’s strength, he has been with this company since 1983 and it has been very successful. However, as time changes, so does strategies, skills and new resources. His new resources should be customer service management, especially if he wishes to expand globally. This new resource will be the focus of international...