Papa John's Case Study

1. How strong are the competitive forces confronting Papa John’s in the pizza segment of the quick service restaurant industry? Complete a five forces analysis to support your answer. ?

Papa John's has a tough competition in the industry, rival competition against the substitute products, bargaining power of buyers and the supplier bargaining power. Inspite of all these it ranked among the top three positions shows that its strategies worked well in the industry

--> Threat of Rivalry ( High ):

• A lot of different restaurants sell the same kind of pizza for the same margins ( its competitors Pizza Hut, Dominos )

• There are too many restaurants offering lot of varieties of food at their dinning places.

• As more than 50% of the industry is occupied by independent owned restaurants, they have their own pricing.

--> Threat of New Entrants ( High ):

• Entering into pizza industry is pretty easy, it is of less investment, also there are lot of opportunities for franchisees.

--> Threat of Substitutes ( High ):

• Too many alternate options for customers in buying a pizza, they can buy a frozen pizza for a very less price in big stores.

--> Buyers Bargaining Power ( High ):

• Customers always look for the best prices or deals while choosing pizza. If the prices are high customers choose alternate options.

--> Bargaining Power of Suppliers ( High):

• This industry has high bargaining power to buy their products and alternates too.

Papa John's Pizza is in the third position because it is differentiating itself with the quality and fresh ingredients for making a better pizza. They offer lot of promotions and coupons to attract customers continuously. They maintain the quality by buying all the ingredients from