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Be sure to save the Reference List and citation information from this SWOT that you will need in your paper. Based on your readings and your understanding of this SWOT analysis, explain the following:Checklist:How have declining trade and investment barriers likely impacted this business’ globalization?How has technological change likely impacted this business’ globalization?What impact does currency fluctuation have on product price across Papa John’s global operations?Respond in a minimum 350-word informative essay in APA format and citation style with a separate title and reference page and be properly cited. papajohnsswot.pdf u2_rubric.pdf Unformatted Attachment Preview A Progressive Digital Media business COMPANY PROFILE Papa Johns International Inc REFERENCE CODE: 0CF6FA79-7DAD-48ED-BFE4-C6C38AFDA5C9 PUBLICATION DATE: 25 Sep 2019 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED Papa Johns International Inc TABLE OF CONTENTS TABLE OF CONTENTS Company Overview ........................................................................................................3 Key Facts ......................................................................................................................... 3 SWOT Analysis ...............................................................................................................4 Papa Johns International Inc © MarketLine Page 2 Papa Johns International Inc Company Overview Company Overview COMPANY OVERVIEW Papa John’s International Inc (Papa John’s) is an international Pizza restaurant company. It operates company-owned and franchised pizza delivery and carryout restaurants. The company’s restaurants principally offer high quality and varied range of pizzas. In addition, it offers cheese sticks, bread sticks, wedges, wings, pastas, beverages, cakes, barbeque, desserts and dips. Papa John’s provides digital rewards and online ordering services. The company develops its restaurants in partnership with franchise developers and joint ventures. It provides all the support in restaurant operations, site selection, marketing, training, and restaurant design to the franchisees. Its operations are spread across North America, Latin America and the Caribbean, Europe, the Middle East and North Africa and Asian Markets. Papa John’s is headquartered in Louisville, Kentucky, the US. The company reported revenues of (US Dollars) US$1,573.3 million for the fiscal year ended December 2018 (FY2018), a decrease of 11.8\% over FY2017. In FY2018, the company’s operating margin was 1.9\%, compared to an operating margin of 8.5\% in FY2017. In FY2018, the company recorded a net margin of 0.1\%, compared to a net margin of 5.7\% in FY2017. The company reported revenues of US$398.4 million for the first quarter ended March 2019, an increase of 6.5\% over the previous quarter. Key Facts KEY FACTS Head Office Papa Johns International Inc 2002 Papa Johns Blvd LOUISVILLE Kentucky LOUISVILLE Kentucky USA Phone 1 502 2617272 Fax 1 502 2662925 Web Address www.papajohns.com/ Revenue / turnover (USD Mn) 1,573.3 Financial Year End December Employees 18,000 NASDAQ Ticker PZZA Papa Johns International Inc © MarketLine Page 3 Papa Johns International Inc SWOT Analysis SWOT Analysis SWOT ANALYSIS Papa Johns International Inc (Papa John’s) is a pizza delivery and carry out restaurant chain based in the US. Franchise-Led model, strong performance of International business, and market recognition are the company’s key strengths, even as its deteriorated cost efficiency remains a major area of concern. Business expansions, growing global travel and tourism industry and growing foodservice sector in the US and strategic initiatives are likely to provide ample growth opportunities to the company. However, increasing labor wages in the US, intense competition, and cost and availability of raw materials may affect the company’s operations and financial performance. Strength Weakness Market Recognition Revenue Growth: International Operations Franchise-Led Model Cost Efficiency Opportunity Threat Growing Foodservice Sector in US Growing Global Travel and Tourism Industry Expanding Restaurant Footprint Strategic Initiatives Unforeseen Circumstances Competition Increasing Labor Wages in US Strength Market Recognition The company’s strong market recognition enhances its brand image and enables it to serve more number of customers. The company operates and franchises pizza delivery and carryout restaurants in certain international markets, dine-in and delivery restaurants under the Papa John’s trademark. In FY2018, the company had 5,303 restaurants, which includes 645 Company-owned and 4,658 franchised restaurants in all 50 states of the US and in 46 countries and territories worldwide. Its company-owned restaurants comprise 183 restaurants operated under three joint venture arrangements. The company was recognized as “Best Pizza” in over 100 US markets during the last several years, such as in Atlanta, Dallas, Los Angeles, Washington, D.C., Orlando, Indianapolis, Phoenix and Knoxville. In 2018, it was ranked no.1 in customer satisfaction among QSR-pizza brands American Customer Satisfaction Index (ACSI). Revenue Growth: International Operations The company’s International Operations segment reported increased revenues in FY2018. The segment contributed 8.3\% towards the company’s total revenue and reported year on year growth of 4\% from US$131.3 million in FY2018, to US$126.3 million in FY2017. Growth in revenues was due to the Papa Johns International Inc © MarketLine Page 4 Papa Johns International Inc SWOT Analysis favorable impact of foreign currency resulting from the increase in equivalent units. Franchise-Led Model Papa John’s operates most of its restaurants through franchisees. The franchise model enables the company to reach diversified geographic regions across the world with varied preferences. As of December, 2018, the company operated 5,303 Papa John’s restaurants, of which 645 were company owned restaurants and 4,658 were franchised restaurants. It operates restaurants in 46 countries and territories across North America, Latin America and the Caribbean, Europe, the Middle East and North Africa and Asia. More than 85\% of the restaurants are franchised, reducing costs and boosting margins. The company intends to increase its international presence by entering into development agreements with experienced restaurant operators. Strong focus on franchisee business enhances the company’s ability to reduce operating costs and expenses. Weakness Cost Efficiency Papa John’s reported decline in its cost efficiency, as reflected by its cost-to-income ratio, which decreased to 98.1\% in FY2018, from 91.5\% in FY2017. It was also higher than the Foodservice industry average operating costs to sales ratio of 67.76\% for the same year. This was due to 11.8\% decrease in revenue from US$1,783.4 million in FY2017 to US$1,573.3 million in FY2018. The decline in revenue was due to 15.2\% decline in domestic company-owned restaurant sales, 25.7\% decline in North America franchise royalties and fees, and 9.5\% decline in revenues of North America commissary. The fall in cost to sale ratio resulted in fall in operating margin. The operating margin decreased to 1.9\% in FY2018 from 8.5\% in FY2017. Operating margin of the company was lower than the Foodservice industry operating margin average of 5.71\% for the same year. The below average operating margin of the company can be attributed to higher operational expenses. Opportunity Growing Foodservice Sector in US The company could benefit from the growing foodservice sector in the US. According to in-house report, the US food service market is expected to reach US$758,832 million by the end of 2020. Growth is expected to be augmented by increasing transactions and growing consumer spending. The number of transactions in the market is expected to reach 78,308 million in 2020. The transactions will increase as consumers increasingly rely on eating out as a result of changing family dynamics and time scarcity. Consumer preference to increased snacking will also contribute to growth, as they are likely to eat less, but more frequently. The number of food service outlets in the US is expected to reach 1.1 million in 2020. Growing Global Travel and Tourism Industry Papa Johns International Inc © MarketLine Page 5 Papa Johns International Inc SWOT Analysis The company is likely to benefit from the positive outlook for global travel and tourism (T&T) industry. According to the World Travel & Tourism Council (WT&TC), the direct contribution of T&T industry to the world’s GDP is expected to increase 3.8\% per annum during the forecast period (2018-2028), to reach US$3,890 billion in 2028, in comparison with US$2,570 billion in 2017. Moreover, the industrys contribution to GDP may increase to US$12,450.1 billion in 2028. The increase in investments in the T&T industry to US$1,408.3 billion in 2028 is likely to aid the growth of the T&T industry. Expanding Restaurant Footprint Papa John’s continues to expand its business both domestic and internationally to label itself as a global brand. In this regard, in January 2019, the company opened first Papa John’s restaurant in Lahore, Pakistan and announced its plans to open second store in Lahore. This initiative helps the company to expand its presence and serve new customer in Pakistan. In August 2018, the company opened restaurant in Kazakhstan and announced its plans to open sixteen restaurants in the Kazakhstan market. This initiative helps the company expand its presence in Central Asia. The company also opened 50th Papa John’s restaurant in Turkey in May 2018. This initiative helps the company to expand its presence in the Middle East and Asia. In February 2018, it opened its first restaurant in Bishkek, Kyrgyzstan and plans to open six more restaurants in Kyrgyzstan to continue its expansion into Central Asia. Strategic Initiatives Strategic initiatives may continue to enhance the business and operations of the company. For instance, in March 2019, the company entered into a national partnership with DoorDash, a destination for door-todoor delivery through over 1,400 restaurants. This initiative helps the company serve new customer segments and enhances its off-premise offerings through delivery and takeout. In Jaunury 2019, the company announced its plans to launch a vegan menu featuring cheesy pizzas and marmite scrolls to its over 350 outlets in the UK. This new menu features three deliciously cheesy vegan pizzas and marmite and cheese scrolls. In December 2018, the company introduced a new Papa Rewards program, CrustoCurrency. This new program provides rewards points five times faster than before and earned points turn into the gold standard of pizza rewards currency Papa Dough, which can be redeemed from the company’s menu such as pizzas, sides, deserts, limited time offers and deals and others (excluding alcohol). In May 2018, the company entered into an agreement with Wounded Warrior Project (WWP), a restaurant chain. This agreement was formed to add new WWP combo deal to support Wounded Warrior Project (WWP). This combo includes two large one-topping pizzas, cheese sticks and a 2l beverage available for a US$25. Threat Unforeseen Circumstances The company’s operations could be affected by unfavorable events. The occurrence of Ebola virus, swine flu, SARS, mad cow disease and bird flu resulted in a decline in tourist arrivals in the affected countries. Precautionary measures such as flight suspensions affected the leisure market. Natural disasters such as storms in California, the US in February 2019, flooding in South Korea and India in August 2018, and snowstorms in the UK in March 2018, reduced the revenue of industry operators. Similar incidents may Papa Johns International Inc © MarketLine Page 6 Papa Johns International Inc SWOT Analysis also lead to people reducing the frequency of their travel to certain countries. Terrorist attack in Jammu and Kashmir in February 2019, in Spain in August 2017 and in the UK in June 2017 and the rise of new terrorist groups such as Islamic State of Iraq and Syria (ISIS) raised security concerns worldwide. Competition The company’s profitability could be affected due to intense competition from major foodservice operators across the world. It principally competes with international, national and regional restaurant chain operators and local independent pizza operators. It competes based on various factors, including food quality, price, service, advertising, brand identification, variety and location. Papa John’s major competitors include Pizza Hut, Inc, Dominos Pizza, Inc., and Little Caesar Enterprises Inc. It also faces competition from delivery aggregators and other food delivery concepts. Competitive pressure in the industry could force the company to undertake strong marketing initiatives or expansion strategies to retain its market share. Increasing Labor Wages in US Increasing manpower costs could increase the company’s operating costs and hamper its profits. The tight labor markets, government mandated increases in minimum wages and a higher proportion of fulltime employees are resulting in an increase in labor costs. Effective January 2019, 18 states in the US increased their minimum wages. Arizona, Oregon and Washington increased their minimum wage by US$0.5 per hour to US$11, US$10.75 and US$12, respectively; and Alaska increased its hourly minimum wage by US$0.05 to US$9.89. Colorado, Florida, Massachusetts, Maine and Rhode Island increased their hourly minimum wages to US$11.1, US$8.46, US$12, US$11, and US$10.5, respectively. Other states such as New Jersey, Ohio and South Dakota also increased their hourly minimum wages to US$8.85, US$8.55 and US$9.1, respectively. Papa Johns International Inc © MarketLine Page 7 Copyright of Papa Johns International, Inc. SWOTS Analysis is the property of MarketLine, a Progressive Digital Media business and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holders express written permission. However, users may print, download, or email articles for individual use. Unit 2 Assignment Grading Rubric Unit 2 Assignment Response to the scenario provides complete information demonstrating analysis and critical thinking: Percent possible 100\% Points possible 40 80\% Based on the designated SWOT and reading: ● Explains how declining trade and investment barriers likely impacted the business’ globalization. ● Explains how technological change likely impacted this business’ globalization. 10 10 ● Explains what impact currency fluctuation has on product price across the business’ global operations. Subtotal: 12 32 Spelling, grammar, APA citation style in a 350-word informative essay with additional title and reference pages. 20\% 8 Total Assignment Score: 100\% Total possible: 40 Points Earned Comments ... Purchase answer to see full attachment