Papa Johns's Business Model

Pizza is the number-one meal choice for Americans. That is why 94% of Americans eat it daily and roughly 3 billion pizzas are made a year (Visually). One of the most known pizza franchises is Papa Johns, which was created by John H. Schnatter in 1986. Many know Schnatter from his countless commercials or his sponsorship with the NFL. I am going to analyze Paper Johns’ business model using the Five Forces Model, Political Economic Social Technology Environment and Legal (PESTEL) analysis. Also, the Return on Sales (ROS) will compare them to their competitors such as Pizza Hut, Little Caesars, and Domino’s. The Five Forces Model is consists of Threat of Rivalry, Threat of New Entrants Level, Threat of Substitution Level, Power of Buyer Bargaining

The most important one would be the Threat of Rivalry. There is a lot of competition between pizza franchises and local restaurants. Many of these franchises and restaurants sell similar products for near the same price and size, which makes the switching costs low. They use advertising and promotion to gain more customers. For example, Pizza Hut offers a dining area for their customer as well as a lunch buffet with healthy alternatives. Also, by always telling people about their array of variety of items to order. One way, Papa Johns competes with this tactic is by using professional athletes in their commercials such as Peyton Manning (Denver Broncos quarterback/future Hall of Famer) and talking about their quality of pizza rather than quantity. “Papa John's had consistently achieved the highest customer satisfaction ratings among pizza chains, and its frequent advertising during NFL games made it the most identified NFL sponsor in 2013”

Based off the above results, Pizza Hut and Domino’s are clearly ahead of Papa Johns, which means they are receiving more revenue based off the calculations and a competitive advantage. This is a good thing for a company. To the contrary, Pizza Hut is on the decline and this means people are going to other pizza franchises like Papa Johns. If this decline continues, Papa Johns could capitalize and make moves to expand their business by investing more in advertising to produce more revenue.

Papa Johns has been meeting the 3 financial goals of managers, which is profitability, growth, and shareholder value. Profitability can be based off the ROS above, Papa Johns has a positive return and it is on a steady track. As for growth, they have continued to open more units and locations around the world (McGraw). Lastly, their shareholder value increased a fair amount over the past few years, but they are on a decline to start off this