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Papa Johns: A SWOT Analysis

Paper Type: Free Essay Subject: Marketing
Wordcount: 2695 words Published: 16th May 2017

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Papa Johns set up in 1985. It grows faster and within 25 years, the company outstrips myriad pizza restaurant. Papa Johns can success because its mature system and marketing strategy. The company try their best to make their pizza cheaper. At the same time, they create new food to consumer. Even though the company is not the biggest pizza restaurant in the world, it is the most development potential company in the world. From these, Papa John’s have adequate capital to compare to industry norms.Where is competition and there will be threat. The only downside is that in recent years, Papa John’s faces a slight decline in economic conditions. To improve the status, they developed a series of improvement measures.They improve the market system, create new food, make pizza delicious and do better in their services.

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As far as we are concerned, Papa John’s being able to have today’s achievement would benefit from the persistent efforts of the entire team. If they can maintain their characteristics, they will achieve more success in the bright future. When talking about innovation and expansion, Papa John’s do well in these areas. Every year, Papa John’s introduce a series of new pizza and other related food to consumers. At the same time, they merge and purchase some recession restaurants. Nobody can avoid competition and Papa John’s faces the same thing. I think the company heading is to develop themselves every day. If they stop their steps, maintain the status quo, have no create, they may decline and until one day, Papa John’s will disappear in the world.

The founder of Papa John’s, John Schnatter, began his pizza career at Rocky’s Sub Pub in Jeffersonville, Indiana, while attending Jeffersonville High School. Schnatter graduated from Jeffersonville High in 1980, and continued his association with the pizza business while attending Ball State University, working as a delivery driver for Greek’s Pizzeria in Muncie. Upon graduating, he began working for his father, who was co-owner of the bar in Jeffersonville, Indiana. In 1984, he sold his Chevrolet Camaro Z28 to buy out the other owner of the bar, and started serving pizza to customers.

For the further reason is that their strongest selling point is their fresh, hand-made dough that is produced under stringent quality control and delivered chilled, not frozen, to all their outlets. they also use fully imported tomato paste made from fresh tomatoes that are canned within six htheirs of plucking, and 100% mozzarella cheese. There investors, customers and supply partners, have the right to expect Papa John’s to conduct its business lawfully, responsibly and with the highest moral and ethical standards. There Code of Ethics and Business Conduct has not been prepared and adopted because of doubts or concerns about Papa John’s team members’ ability or desire to conduct business ethically. Instead, the Code serves as an affirmation of there high ethical expectations, as theyll as a helpful reference as questions may arise.

The Code can lead to a better understanding of the ethical values and principles that are the foundation of Papa John’s culture, and can also help each of us arrive at proper and ethical decisions in situations that may confront us in their business.

Because of these, the company’s highlights are that there earnings per share of $2.00 to $2.12, an increase of over 16% as compared to the reaffirmed 2010 earnings range of $1.74 to$1.80 per share at the mid-point, excluding the impact of the franchisee-owned cheese purchasing company, BIBP Commodities, Inc. (BIBP). Second, the company will retire the BIBP deficit at 2010 year-end, projected to be approximately $14 million, as part of a multi-year National Marketing Fund agreement with franchisees. Third, North America system-wide comparable sales increase ranging from 1.5% to 2.5%. Forth, International comparable sales increase ranging from 1% to 3% and International total system-wide sales increase ranging from 25% to 30%. Fifth, worldwide net unit openings ranging from 190 to 220. Last, the 2011 guidance includes a scheduled increase in the domestic royalty rate from 4.75% to 5.0% effective at the beginning of 2011, with franchisees having the ability to earn quarterly rebates of a portion of the royalty by achieving certain sales growth targets and by making specified re-image investments in their restaurants.

North America Restaurant Sales – North America system-wide comparable sales are expected to increase from 1.5% to 2.5% in 2011. Company-owned and franchised restaurants are expected to produce relatively consistent comparable sales on average.

International Restaurant Sales – The company will initiate the reporting of comparable sales for International restaurants beginning in the first quarter of 2011. Comparable sales will be presented on a constant-dollar basis, eliminating the impact of currency exchange rates. International comparable sales are expected to increase from 1% to 3% in 2011. International comparable sales can be negatively impacted by the existence of a substantial number of emerging markets where second year sales for any given restaurant may be comparing against an unusually high “grand opening” level of first year sales. International comparable sales can also be positively or negatively impacted by significant levels of currency inflation or deflation within a given country. Total sales growth for international restaurants is expected to range from 25% to 30% in 2011, due to new unit growth, in addition to the expected comparable sales increase.

Worldwide Net Unit Growth – Worldwide net unit growth in 2011 is expected to be in the range of 190 to 220 units, consisting of a range of 85 to 100 net units for North America and a range of 105 to 120 net units for International. This represents approximately 3% unit growth for North America and 15% unit growth for International in 2011. Substantially all of the worldwide net unit growth is expected to be franchised, with single digit company-owned unit growth expected in North America and Beijing.

From them,they can see Papa John’s is becoming stronger in many place. They can finish their plans and goals easily if their managers make great mistakes.

Papa John’s Product and Marketing Analysis

Papa John’s Pizza is the third largest take-out and delivery pizza restaurant chain in the United States, behind Pizza Hut and Domino’s Pizza.It is based in Louisville, Kentucky. Papa John’s slogan is “Better Ingredients. Better Pizza.”

The corporation credits its growth to great customer service,menu simplicity and quality products in contrast with other chains’ focus on low prices. Side dishes simplify and fewer options in crust styles inventory management, meaning the focus could remain on quality. However, since the mid-1990s, Papa John’s has followed the industry trend and greatly expanded its menu options, adding thin-crust, pan pizza, and whole wheat crust options, “robusto”, and Alfredo sauces; 10 specialty pizzas, many with new toppings and new cheeses; many dessert pastries, such as apple pie; and new variations of bread sticks and cheese sticks.

Papa John’s try their best make their pizza cheaper. At the same time, they create new food to consumer. Even though the company is not the biggest pizza restaurant in the world, it is the most development potential company in the world.

As we all know, Pizza Hut and Domino’s, Inc. are Papa John’s principal competitors. Both of them are very strong.

Pizza Hut is the world’s largest restaurant company. It is a subsidiary of Yum! Brands, Inc. with approximately 34,000 restaurants, and kiosks in 100 countries. Pizza Hut is split into several different restaurant formats; the original family-style dine-in locations; and hybrid locations that offer carry-out, delivery, and dine-in options. Many full-size Pizza Hut locations offer lunch buffte, with “all-you-can-eat” pizza, bread sticks, and a special pasta. Additionally, Pizza Hut also has a number of other business concepts. They are different from the store type; Pizza Hut “Bistro” locations are “Red Roof’s which offer an expanded menu and slightly more upscale options.

But sometimes,Pizza Hut experiments with new products frequently, with less successful ones being discontinued. These include the initially popular two-foot by one-foot square cut pizza Bigfoot, the 16″ Big New Yorker, made with a sweet sauce, the Chicago Dish Pizza and Sicilian pizza, the latter also offered in 2006 as Lasagna Pizza.

Another company, Domino’s Pizza, Inc. is an international pizza delivery corporation headquartered in Ann Arbor, Michigan, United States. Domino’s founded in 1960 and today it is the second-largest pizza chain in the United States and has nearly 9,000 corporate and franchised stores in 60 international markets and all 50 U.S. states. Domino’s Pizza was sold to Bain Capital in 1998 and went public in 2004. The menu features pizza, pasta, oven-baked sandwiches, boneless chicken, salads, cheesesticks, and a variety of dessert items.

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To counter the competition, the Papa John’s has built a chain of more than 2,800 pizza delivery and carry-out restaurants operating under the trademark “Papa John’s” in 49 states, the district of Columbia, and 20 international markets. More than 570 of the outlets are company owned, with the remainder being franchised. The firm also franchises 115 Perfect Pizza restaurants in the United Kingdom.In a highly competitive segment of the restaurant industry, Papa John’s has managed to carve out a highly profitable niche by offering a very limited menu consisting of pizza, breadsticks, cheese sticks, chicken wings, and canned or bottled soft drinks; and by using high-quality ingredients and touting them in its trademark slogan “Better Ingredients. Better Pizza.”

To prepare Papa John’s for more cruel expansion, the visionary Schnatter built a commissary near corporate headquarters in Louisville’s Bluegrass Industrial Park to supply his stores with fresh pizza spices and dough. Papa John’s commissary system was frequently cited by industry analysts and company officials as a key factor in the success of Papa John’s. Not only the system reduced labor costs and reduced waste because the dough was pre-measured it, perhaps more importantly, maintained control over the consistency of the product. In many other restaurants, for example, the least experienced employees were responsible for making the dough because it was such a messy job.

Just as Papa John’s was nearing the 500-store milestone in mid-1994, it was named by Business Week as the nation’s best-run business of small, based on three-year results in sales growth, earnings growth, and return on invested capital. The attention Papa John’s received from this report, as well as from other reports by business and industry publications ranging from Forbes to Nation’s Restaurant News, helped the company to attract management talent and gain momentum in the investment community. Taking advantage of this energy, Papa John’s completed two common stock offerings during this year, raising an additional $35 million and preparing the way for further expansion.

In a word, according with Papa John’s sales ideas, the company can do better and become stronger . We are confident to believe more delicious pizza can be done in the following years.

Papa John’s Financial Information and Performance Analysis

This is the graph of Papa John’s recent stock price.

From this graph, we can see the stock price is rising in the recent 3 months. The stock price is rising from 28.30 to 31.02.and we can guess that the stock price of Papa John’s would continue to rise.

— Earnings per diluted share, excluding the impact of the franchisee-owned BIBP cheese purchasing entity, of $0.51 in fourth quarter 2010 vs. $0.41 in fourth quarter 2009 and $1.80 for full-year 2010 vs. $1.50 for full-year 2009 — Earnings per diluted share, including the results of BIBP, of $0.55 in fourth quarter 2010 vs. $0.49 in fourth quarter 2009 and $1.96 in full-year 2010 vs. $2.06 in full-year 2009 — Domestic system-wide comparable sales increased 0.7% for the fourth quarter and were even for the full year, representing the seventh consecutive year for even or positive domestic system-wide comparable sales — International franchise system sales increased 21% for the fourth quarter and 17% for the full year — Record global restaurant sales in 2010, including $1.9 billion for franchised restaurants and $500 million for company-owned restaurants (a combined increase of 3.0%) — Achieved 63 worldwide net unit openings during the quarter and 177 for the full year — Year-end BIBP deficit eliminated as part of multi-year National Marketing Fund agreement with domestic franchisees; the company intends to eliminate proforma reporting for BIBP impact beginning with 2011.

棒约翰国际公司¼ˆçº³æ-¯è¾¾å…‹è‚¡ç¥¨ä»£ç ¼šPZZA¼‰ä»Šå¤©å…¬å¸ƒäº†2010年第四季度二点八六八亿美元收入¼Œè¾ƒ5.2¼…的二万七千二百八十点零万美元收入为2009年第四季度增加。Papa John’s International, Inc. today announced revenues of $286.8 million for the fourth quarter of 2010, representing an increase of 5.2% from revenues of $272.8 million for the fourth quarter of 2009. 对于2010年第四季度的净利润为1400万美元¼Œæˆ-每股摊è-„收益¼ˆåŒ…括税后八十四点三零万美元¼Œæˆ-每股稀释后每股0.04收益0.55从专营公司拥有的奶酪采购公司¼ŒBIBP商品的成果的巩固¼Œå…¬å¸¼ˆ”BIBP”¼‰¼Œå¯å˜åˆ©ç›Šå®žä½“¼‰¼Œè€Œ2009年第四季度的1370万美元¼Œæˆ-每股摊è-„收益¼ˆåŒ…括税后130万美元¼Œæˆ-每股稀释后每股0.05收益0.49¼Œå‡€åˆ©æ¶¦ä»Žå·©å›ºBIBPå’Œ100万美元¼Œæˆ-每股0.03美元¼Œæ¯è‚¡æ‘Šè-„从若干所å¾-税é-®é¢˜çš„定稿增益¼‰ã€‚ Net income for the fourth quarter of 2010 was $14.0 million, or $0.55 per diluted share (including after-tax income of $843,000, or $0.04 per diluted share, from the consolidation of the results of the franchisee-owned cheese purchasing company, BIBP Commodities, Inc. (“BIBP”), a variable interest entity), compared to 2009 fourth quarter net income of $13.7 million, or $0.49 per diluted share (including after-tax income of $1.3 million, or $0.05 per diluted share, from the consolidation of BIBP and a gain of $1.0 million, or $0.03 per diluted share from the finalization of certain income tax issues).

2010年综合收入为11.3亿美元¼Œè¾ƒ4.4¼…至10.8亿美元的综合收入增加2009。Consolidated revenues for 2010 were $1.13 billion, representing an increase of 4.4% from consolidated revenues of $1.08 billion for 2009. 2010年的净收入为519万美元¼Œæˆ-每股稀释后收益¼ˆåŒ…括税后收入从BIBP合并为430万美元¼Œæˆ-每股稀释后每股0.16¼‰1.96相比¼Œè¾¾575亿美元¼Œæˆ-每股稀释后收益2.06净收入¼Œ 2009å¹´¼ˆåŒ…括税后收入为1460万美元¼Œæˆ-每股稀释后收益0.52¼Œä»ŽBIBP巩固和100万美元¼Œæˆ-每股0.04美元¼Œæ¯è‚¡æ‘Šè-„¼Œä»Žæ‰€å¾-税若干é-®é¢˜çš„定稿增益¼‰ã€‚ Net income for 2010 was $51.9 million, or $1.96 per diluted share (including after-tax income of $4.3 million, or $0.16 per diluted share, from the consolidation of BIBP), compared to net income of $57.5 million, or $2.06 per diluted share, for 2009 (including after-tax income of $14.6 million, or $0.52 per diluted share, from the consolidation of BIBP and a gain of $1.0 million, or $0.04 per diluted share, from the finalization of certain income tax issues).


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