The financial statement of the company can be considered an important document that can be used to demonstrate the current state of the company, its results, and the effectiveness of the strategy that is employed at the moment. For this reason, its analysis can help to acquire an improved understanding of the firm’s functioning. For Domino’s Pizza case, the existing financial results will be evaluated to understand whether a strategy employed by the organization at the moment is sufficient or not. The provided financial highlights include relevant business data and also numbers related to previous years, which can help to compare performance and conclude about the ability of new measures to promote better outcomes.
Revenue
First of all, the existing financial report shows the high revenue generated by Domino’s Pizza in 2010. In accordance with the document, the total revenue estimates $1,570,9, with $173.3 from the domestic franchise and $176.4 from the international one. It means that the company can benefit from a stable financial position and consider its further evolution by investing in some other projects or new campaigns. At the same time, global retail sales are determined as $6,268.7 ($3,316.7 domestic and $2.952.0 international markets), which is also a positive outcome evidencing the success of the company and its ability to remain competitive regarding the complex external environment. Moreover, compared to previous years, Domino’s Pizza demonstrates some improvement that can be taken as the result of new regulations and measures offered by its management as a response to recent reductions.
Structure of Income
The report also demonstrates the structure of income and the major sources of revenue. Thus, in accordance with the document, Domino’s Pizza benefits from a balanced mix of international and domestic spheres. For instance, 54% of all retail sales ($3.317) come from the domestic market, which evidences its importance and contribution to the evolution of the brand. At the same time, the remaining 47% ($2.952) come from other areas and global operations that are performed by the company. The given distribution of income shows several advantages that help Domino’s Pizza to evolve. First of all, it contributes to the creation of a pool of resources that can be used if global or domestic operations fail. The almost equal balance between these spheres means that there is an alternative way to generate revenue and sponsor measures needed to avoid the further deterioration of the situation. At the same time, the numbers show that returns are healthy as the total debt is reduced while the cost of sales decreases by %3.25.
Net Income
As for the net income, it has also responded to the changes mentioned above. For instance, in 2008, or before the implementation of a new strategy, it comprised $54.0, while in 2010, $87.9 net income was reported. It means that 10% of growth can be associated with the creation and employment of a new strategy. The report also shows that in 2010, the net income increase slowed, which can be linked to the end of the change phase; however, a significant improvement in the domestic segment can be viewed, which is one of the basic achievements of the company in the new financial period. The positive change in the net income also evidences the gradual Domino’s recovery and its ability to compete with the closest rivals, which is important regarding the existing environment.
The data provided in the financial report also shows that the company manages to earn more retail sales per store in the domestic market compared with global sales. It means that a new strategy aimed at the improvement of the situation in the USA and the attraction of clients becomes successful and helps to restore the positive image of the firm. The information about the franchise and its financial showings show that Domino’s remains popular can count on stable growth in the level of income due to the utilization of the given approach. The average income per store constitutes $191,145, which is comparatively high and helps to create the basis for the further growth of the brand.
Competitors
The provided financial report can also be compared with the showings of the competitors as it is vital to understand the current situation in the market and conclude about Domino’s ability to preserve its leading positions. For instance, comparing income statements of the firm with Papa John’s, it is possible to emphasize the fact that the first one has a higher net income (5.6% vs. 4.6%). Additionally, Domino’s revenue is better than Papa John’s ($1,570.9 vs. $1.126, 4), which means that the company demonstrates stable performance and has opportunities for further growth. However, it should be said that both companies have good financial statements, which means that there is fierce competition between them and the need for a specific competitive advantage to attain a high level of clients’ devotion.
Moreover, considering the fact that Papa John’s already uses fresh ingredients and managed to introduce change earlier, its current showings can be taken as a positive result evidencing the success of the firm. Domino’s has to continue its transformation to achieve even better results and guarantee that it will be able to compete in the future.
Finally, the provided report also shows that the company’s current status can be determined as healthy. At the moment, the cost of sales decreases and comprises 3.25%, while the total debt is also reduced and constitutes 16%. It means that after the comparatively long recession and reduction in the level of income, Domino’s managed to enter a new phase characterized by the continuous and stable evolution and rise. Moreover, the other data presented in the report evidence the existence of a significant difference in data in the period before 2009 and after, which proves the success of the implemented change and the ability of the company to evaluate the external environment correctly and rethink its current strategy.
Conclusion
Altogether, the recent performance shows that the new approach selected by Domino’s Pizza has a beneficial impact on the functioning of the company. The ability to consider the current clients’ demands and introduce appropriate changes contributed to the revitalization of the brand and the appearance of new opportunities for future growth. The improvement in the domestic sector evidence that the situation is stabilized and customers reacquired a high level of interest and trust in the brand. For this reason, the new strategy can be considered an effective response to the environmental factors that affected Domino’s at that period and preconditioned the emergence of problematic issues.