Papa John's Case Study

In: Business and Management

Submitted By jkalavapudi
Words 1573
Pages 7
Introduction
The Papa John’s case provides a classic example of a company that entered a highly saturated and mature market and was able to enjoy immense growth and success due to its creative product differentiation strategy. The company’s motto has been consistent from the day the first restaurant was opened: Superior ingredients and a superior product from its competitors. John Schnatter took the basic concept of product differentiation and positioning to new heights as he created a strong global brand, which had an unprecedented track record of success and customer loyalty over its competitor’s pizza products.

This case analysis will examine the company’s initial meteoric growth, leveling performance in recent years while attempting to foreground the challenges faced by Papa John’s and evaluate the strategic options and possible responses to pressures through an evolved product differentiation and growth strategy.

Internal/External Environment & Pressures

Internally, the company had enjoyed astronomic growth since its inception in the mid 1980s, but began to see the impact of a slowing U.S. and world economy in 2008 that began to put pressures on the company’s year-over-year growth and profitability. The time period referenced in the case indicated that Papa John’s in 2007 had 14.8% market share of the $13.5 billion pizza food service market. Despite showing profits each year on its income statement, the year-over-year growth numbers were nowhere near what they were during two decades of operation.

A highly competitive, mature, and saturated pizza market sums up the nature of the external landscape. Given this highly competitive market for pizza service, Papa John’s faced several threats including the following:

New Entrants: Given the low fixed cost of entry, it was relatively easy for small, mom-and-pop pizza shops to open up and…...

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