Domino's India- Operational Excellence Strategy

Executive Summary

Domino's Pizza entered India in 1996 through a master franchise agreement with Jubilant FoodWorks Limited (JFL), which operates the brand across India, Sri Lanka, Bangladesh, and Nepal. Over nearly three decades, JFL has transformed Domino's into India's largest and most profitable quick-service restaurant (QSR) chain by store count and revenue. The company's operational excellence strategy has been built on four pillars: aggressive store expansion with a focus on smaller format stores, localized menu innovation, supply chain vertical integration, and technology-driven delivery optimization. According to JFL's FY23 Annual Report, the company operated 1,838 Domino's stores across India as of March 31, 2023, with system sales of ₹5,391 crores. This case examines the publicly documented operational strategies that enabled this growth, while acknowledging significant gaps in publicly available information regarding internal processes, specific cost structures, and granular performance metrics.

Company Background and Market Entry

Franchise Structure

Jubilant FoodWorks Limited, a subsidiary of Jubilant Bhartia Group, secured the master franchise rights for Domino's Pizza in India in 1995 and opened its first store in New Delhi in January 1996, according to the company's corporate website. The franchise agreement gave JFL exclusive rights to develop and operate Domino's stores in India, Sri Lanka, Bangladesh, and Nepal. JFL went public in February 2010, listing on the Bombay Stock Exchange and National Stock Exchange of India. According to JFL's FY23 Annual Report, the company also operates Popeyes (since 2019), Dunkin' Donuts (closed most stores by 2022, though no verified public information confirms complete exit), Hong's Kitchen, and Ekdum (proprietary brands launched in 2021 and 2023 respectively). However, Domino's remains the primary revenue driver, contributing approximately 94% of total revenue in FY23 according to the same annual report.

Early Localization Strategy

In interviews with business media, JFL executives have consistently emphasized that localization was critical to Domino's India success from inception. According to a 2019 interview with Pratik Pota, then CEO of JFL, published in The Economic Times, "We were the first market globally to introduce a vegetarian pizza with paneer as a topping. That happened within the first year of operations." The company introduced products like the Peppy Paneer pizza and later innovations like the Cheezy Bread and Garlic Breadsticks specifically for Indian consumers.

Store Expansion Strategy

Growth Trajectory

JFL pursued an aggressive store expansion strategy, growing from 1 store in 1996 to 1,838 stores by March 2023 according to FY23 Annual Report data. The company's annual reports provide the following verified store count progression:

• FY19: 1,258 stores

• FY20: 1,311 stores

• FY21: 1,361 stores

• FY22: 1,595 stores

• FY23: 1,838 stores

This represents a compound annual growth rate (CAGR) of approximately 10% in store additions between FY19 and FY23, though growth was disrupted during FY21 due to COVID-19 related closures and restrictions.

Store Format Strategy

JFL's FY22 and FY23 Annual Reports and investor presentations indicate a strategic shift toward smaller format stores to increase penetration and reduce capital expenditure. In a Q4 FY22 earnings call, management revealed a focus on opening stores in the 800-1,200 square feet range, compared to traditional 1,500-2,000 square feet stores. The FY23 Annual Report states that about 65% of new stores in FY23 were compact. In the FY23 earnings call, management noted these smaller stores require capital expenditure of ₹35-40 lakhs, compared to ₹50-60 lakhs for traditional stores, though these figures are approximate.

Geographic Penetration

According to FY23 Annual Report, JFL operated stores across 350+ cities in India as of March 2023. The company's investor presentations indicate presence across all major metro cities, tier-2 cities, and increasing penetration in tier-3 towns. However, no verified information is publicly available on the specific number of stores per city, city-wise revenue contribution, or performance metrics by geographic region.

Supply Chain and Vertical Integration

Captive Supply Chain Infrastructure

JFL operates a vertically integrated supply chain model that distinguishes it from most QSR operators in India. According to the FY23 Annual Report, the company operates supply chain through its wholly-owned subsidiary, Jubilant FoodWorks Lanka (Pvt) Limited, and directly owned facilities in India. The FY23 Annual Report confirms the following supply chain infrastructure:

• Cheese Manufacturing: JFL operates a cheese manufacturing facility in Pune through a joint venture arrangement. According to a 2015 press release on the company website, JFL entered a joint venture with Kamdhenu Foods (India) to set up this facility with initial capacity of 7,000 tonnes per annum.

• Processing Centers: The FY22 Annual Report mentions that JFL operates food processing centers for preparation of pizza bases, sauces, and vegetable toppings. The report states the company operates multiple such facilities but does not specify exact locations or capacities.

• Distribution Network: According to the FY23 Annual Report, JFL operates a distribution network covering all store locations through regional distribution centers.

No verified information is publicly available on specific capacity utilization rates, cost savings from vertical integration, supplier arrangements, inventory turnover metrics, or procurement volumes.

Quality Control and Standardization

In a 2019 interview with Business Standard, Pratik Pota stated, "Our supply chain infrastructure ensures that the pizza you get in Guwahati tastes exactly the same as what you'd get in Mumbai." The FY23 Annual Report mentions that JFL maintains "stringent quality standards across all supply chain operations" but provides no specific details on quality control processes, rejection rates, or quality metrics.

Technology and Delivery Operations

Digital Ordering Infrastructure

JFL has publicly emphasized technology as a core operational pillar. According to the FY23 Annual Report, digital orders (through the Domino's app, website, and third-party aggregators) constituted approximately 80% of total orders in FY23. The FY22 Annual Report noted that digital orders were approximately 75% of total orders in FY22. According to multiple press releases on the JFL website, the company launched:

• Domino's mobile app in 2011

• Online ordering through website in 2009

• Integration with food aggregator platforms (Zomato, Swiggy) began around 2017-2018, though exact dates are not verified

In the FY23 earnings call, management stated that orders through the company's own channels (app + website) represent approximately 60% of total orders, with the remaining 40% coming through aggregator platforms and offline channels. However, these are approximate figures shared in analyst discussions rather than precisely disclosed metrics.

Delivery Network

According to JFL's FY23 Annual Report, the company operates its own delivery fleet for fulfillment. In the FY22 earnings call, management mentioned that JFL employs delivery personnel directly rather than outsourcing delivery operations, distinguishing it from some competitors who use third-party logistics. No verified information is publicly available on the number of delivery personnel, delivery time metrics, delivery radius per store, order fulfillment rates, or specific technological systems used for routing and optimization beyond general statements in annual reports about "technology-enabled delivery operations."

30-Minute Delivery Promise

Domino's India has historically marketed a 30-minute delivery promise, though this has been modified over time. According to a 2021 article in The Economic Times, JFL repositioned the promise from "30 minutes or free" to "30 minutes or ₹50 off" and subsequently to quality-focused messaging. A 2022 press release on the company website indicated the company emphasized "hot and fresh pizza" over strict time commitments following consumer feedback and operational considerations. No verified information is publicly available on actual average delivery times, percentage of orders delivered within 30 minutes, or specific operational protocols around the delivery promise.

Menu Innovation and Product Strategy

Localized Product Development

JFL has consistently highlighted menu localization as a competitive advantage in earnings calls and annual reports. The FY23 Annual Report states that Domino's India offers "the most extensive menu among all Domino's markets globally" with over 100 menu items.

Specific product innovations documented in company press releases and media interviews include:

• Early innovations (1996-2005): Peppy Paneer pizza, Indian-style chicken toppings, vegetarian menu expansion

• Mid-period innovations (2006-2015): Pizza Mania value platform launched in 2009 (mentioned in FY11 Annual Report), introduction of pasta and sides

• Recent innovations (2016-2023): Burger Pizza (2019), Cheese Volcano pizza (2021), Unbox Surprise deals platform (2020)

According to a 2019 interview in Business Today with Pratik Pota, "India has the highest proportion of vegetarian pizzas sold anywhere in the Domino's system globally, at around 50% of mix." However, no verified breakdown of vegetarian vs non-vegetarian sales mix is available in annual reports or official disclosures.

Pricing Strategy

JFL has pursued a value-pricing strategy anchored by the Pizza Mania platform. According to multiple annual reports, Pizza Mania offers pizzas starting at ₹49, with prices varying by city and store format. The FY23 Annual Report mentions that Pizza Mania is "one of our most popular product platforms" but provides no specific sales contribution or volume data.

No verified information is publicly available on average order values, price elasticity, pricing by region or format, or contribution margins by product category.

Store-Level Operations

Store Formats and Layout

According to investor presentations and annual reports, JFL operates stores in multiple formats:

1. Traditional Dine-in stores: Larger format with seating capacity

2. Delivery-focused stores: Smaller format with minimal or no seating

3. Express/Compact stores: Smallest format focused exclusively on delivery and takeaway

The FY23 Annual Report states that delivery and takeaway constitute over 90% of system sales, with dine-in contributing a small single-digit percentage. However, no precise breakdown is provided in official disclosures.

Staffing and Training

No verified information is publicly available on store-level staffing structures, employee count per store, training programs, staff turnover rates, or compensation structures beyond general statements in annual reports about "comprehensive training programs" and "employee development initiatives." The FY23 Annual Report mentions that JFL employed approximately 30,000 people as of March 2023 across all operations, but provides no breakdown by function or store vs. corporate personnel.

Marketing and Brand Building

Advertising Strategy

JFL has maintained consistent brand visibility through traditional and digital marketing. According to annual reports, the company invests in:

• Television advertising during major sporting events (IPL, Cricket World Cup)

• Digital marketing across social media and online platforms

• Outdoor and print advertising in local markets

The FY23 Annual Report shows that advertising and sales promotion expenses were ₹341.3 crores in FY23, representing approximately 5.9% of revenue from operations. The FY22 Annual Report showed advertising expenses of ₹323.7 crores, representing approximately 6.7% of revenue in that year.

Brand Partnerships and Sponsorships

According to press releases on the company website, Domino's India has partnered with various entertainment properties and events, though specific partnership values and terms are not publicly disclosed. No verified information is publicly available on return on marketing investment, brand awareness metrics, or campaign-specific performance data beyond qualitative management commentary in earnings calls.

COVID-19 Response and Adaptation

Pandemic Impact

The COVID-19 pandemic significantly impacted JFL's operations in FY21 and FY22. According to the FY21 Annual Report:

• Revenue from operations declined by 13.5% year-over-year in FY21

• Like-for-like store growth (SSSG) was negative in FY21

• The company temporarily closed stores during lockdown periods

The FY21 Annual Report states that approximately 300+ stores were temporarily closed at the peak of lockdown restrictions in April-May 2020.

Operational Adaptations

According to FY21 and FY22 Annual Reports and press releases, JFL implemented several operational changes during the pandemic:

• Introduction of "Zero Contact Delivery" protocols (announced in March 2020 press release)

• Enhanced sanitization procedures at stores and in delivery

• Packaging modifications for contactless delivery

• Expansion of digital ordering infrastructure

The FY22 Annual Report notes that the company recovered strongly post-pandemic, with revenue growth of 42% year-over-year in FY22, though this was partially due to comparison with the pandemic-affected FY21 base.

Competition and Market Position

Competitive Landscape

Domino's competes in India's organized QSR market with both international and domestic chains. According to a RedSeer Consulting report referenced in JFL's FY23 investor presentation, the organized pizza market in India is estimated at approximately ₹8,000-9,000 crores, with Domino's holding an estimated 60%+ market share by value. However, the exact methodology and underlying data for this market share estimate are not detailed in publicly available sources. Major competitors referenced in annual reports and industry coverage include:

• Pizza Hut (operated by Sapphire Foods India Limited and other franchisees)

• McDonald's (operated by Westlife Foodworld in West and South India, Connaught Plaza Restaurants in North and East)

• KFC (operated by Sapphire Foods and Devyani International Limited)

• Burger King (operated by Restaurant Brands Asia)

• Regional pizza chains and cloud kitchens

No verified information is publicly available on competitor-specific performance metrics, customer overlap, or detailed competitive positioning data beyond general market commentary in annual reports.

Competitive Advantages (As Articulated by Management)

In earnings calls and investor presentations, JFL management has highlighted the following as competitive differentiators:

1. Largest store network providing convenience and accessibility

2. Vertically integrated supply chain enabling quality and cost control

3. Strong brand equity and recall

4. Technology infrastructure for seamless ordering and delivery

5. Localized menu catering to Indian preferences

However, no quantified data supporting the magnitude of these advantages is publicly available.

Limitations

Store-Level Operations:

• Precise staffing models, employee count per store format

• Store-level revenue, profitability, or breakeven timelines

• Detailed capital expenditure breakdown per store

• Specific inventory management practices or wastage rates

• Customer traffic patterns or peak hour operations

Supply Chain:

• Exact locations and capacities of all processing facilities

• Procurement volumes and supplier relationships

• Specific cost savings from vertical integration vs. market alternatives

• Inventory turnover ratios or working capital efficiency

• Quality control protocols and rejection rates

Technology and Operations:

• Specific software systems or platforms used

• Technology development costs and team structure

• Order management system architecture

• Delivery routing algorithms or optimization methods

• Actual average delivery times and on-time delivery percentages

Customer Metrics:

• Customer acquisition costs, lifetime value, or retention rates

• Order frequency, average order values, or customer segmentation

• Conversion rates from digital channels

• Customer satisfaction scores or NPS

• Repeat customer percentages

Financial Details:

• Store-level economics, contribution margins, or unit profitability

• Marketing ROI or channel-specific acquisition costs

• Detailed cost structure breakdown

• Working capital management specifics

• Franchisee economics (JFL operates company-owned stores in India, but economics are not disclosed)

Internal Processes:

• Decision-making structures or organizational design

• New store site selection methodology

• Menu development processes

• Performance management systems

• Incentive structures for store and corporate teams

Key Lessons and Strategic Insights

1. Localization as Competitive Moat

JFL's success highlights the importance of tailoring global brands to local tastes in emerging markets. The company's significant deviations from Domino's global menu, such as paneer toppings and Indian-style vegetarian options, were crucial for acceptance and growth. The FY23 Annual Report notes that India has "the most extensive menu among all Domino's markets globally," emphasizing this localization. This strategy differs from competitors who initially kept more standardized menus. However, there is no verified data available on competitor localization timelines or consumer preference studies to quantify this approach's impact.

2. Store Network Density as Service Advantage

JFL's expansion to 1,838 stores in over 350 cities offers a convenience edge that's hard for competitors to match without substantial investment. By adopting smaller, lower-capex store formats, JFL rapidly increased market density, as noted in FY22 and FY23 earnings calls. This density potentially allows for quicker delivery and improved service, though specific metrics aren't publicly available. The compact store format's capital efficiency (₹35-40 lakhs compared to ₹50-60 lakhs for traditional formats) facilitated swift expansion while managing capital, though payback periods and ROI for these formats haven't been disclosed.

3. Vertical Integration for Quality and Supply Security

JFL's investment in captive supply chain infrastructure, including cheese manufacturing, processing centers, and a distribution network, is a strategic choice prioritizing control over flexibility. This infrastructure ensures consistent product quality and taste across all stores and provides supply security during disruptions, as noted in the FY21 Annual Report. However, the trade-offs, such as capital intensity, operational complexity, and opportunity cost compared to third-party suppliers, are not publicly documented. Additionally, comparative cost structures with competitors using outsourced supply chains are undisclosed.

4. Technology as Enabler of Scale

The increase in digital orders from about 75% in FY22 to 80% in FY23 suggests successful technology adoption that reduces ordering friction and potentially lowers transaction costs. The company's proprietary ordering platforms (app and website) account for 60% of orders, providing control over customer relationships and data, unlike third-party aggregators. However, there is no available information on technology development costs, team composition, system capabilities, or quantified benefits from these investments. The impact of digital channels on operational efficiency, labor costs, or order accuracy is not publicly documented.

5. Value Pricing as Market Expansion Tool

The Pizza Mania platform, starting at ₹49, expands the market in a price-sensitive country. It is described as "popular" and vital to the product mix, although exact sales contributions are undisclosed. This value tier may drive trial, frequency, and market penetration in tier-2 and tier-3 cities where affordability is a barrier. However, its profitability, impact on higher-priced products, and contribution to customer acquisition and lifetime value are not publicly documented.

Conclusion

The operational success of Domino's India is defined by a strategic synergy between global brand standards and deep local market integration. By focusing on the four pillars of smaller-format store expansion, localized menu innovation, supply chain vertical integration, and technology-driven delivery optimization, Jubilant FoodWorks Limited (JFL) has transformed the brand into India’s largest QSR chain. As evidenced by their FY23 performance—operating 1,838 stores with system sales of ₹5,391 crores—their ability to scale efficiently while maintaining service speed and cost-effectiveness remains their primary competitive advantage. Ultimately, the company’s evolution from a single store in 1996 to a multi-national franchise powerhouse demonstrates that operational excellence is achieved through a consistent focus on infrastructure, technological adoption, and a granular understanding of regional consumer needs.

Discussion Questions

1. Build vs. Buy in Supply Chain: JFL chose to vertically integrate its supply chain with captive cheese manufacturing and processing facilities, while many competitors outsource these functions. Analyze the strategic rationale for this choice considering: (a) capital requirements and balance sheet implications, (b) operational complexity and core competency considerations, (c) cost structure and margin impact, (d) quality control and brand consistency benefits, and (e) flexibility to respond to demand changes. Given the limited public information on actual cost savings and capital efficiency, what additional data would you need to fully evaluate this decision? What framework would you use to determine the optimal degree of vertical integration for a QSR business in an emerging market?

2. Store Format Strategy and Market Penetration: JFL's shift toward compact, low-capex stores (₹35-40 lakhs vs. ₹50-60 lakhs for traditional format) enabled faster store expansion while managing capital deployment. Evaluate this strategy considering: (a) the trade-off between store count and store capability (limited seating, focus on delivery/takeaway), (b) implications for brand positioning and customer experience, (c) saturation risks and optimal store density, (d) competitive responses and sustainability of first-mover advantage in small format deployment. If you were a competitor (Pizza Hut, regional chain, or new entrant), how would you respond to JFL's store network density? Would you match their format strategy or differentiate?

3. Localization vs. Standardization: Domino's India operates "the most extensive menu among all Domino's markets globally" according to the FY23 Annual Report, with significant localization including vegetarian options, paneer toppings, and India-specific products. Analyze the operational implications of extreme menu localization: (a) supply chain complexity and inventory management challenges, (b) training requirements and execution consistency across 1,800+ stores, (c) innovation processes and time-to-market for new products, (d) cost structure implications versus standardized global menus. How would you balance the customer preference benefits of localization against operational complexity costs? What decision framework would guide which products to localize versus standardize?