Business lessons for entrepreneurs as Domino’s Pizza now sells jollof rice
The harsh socio-economic climate in Nigeria has forced business owners in the country to put on their thinking caps. It has become a case of you either innovate or dissolve.
The latest brand to make an unexpected pivot is leading pizzaiolo in Nigeria, Domino’s Pizza. After 10 years of doing business in Nigeria and concentrating on its signature product, Pizza, the company has announced that it is introducing jollof rice and roasted chicken as part of its menu for the Nigerian market.
The company made the disclosure through its Instagram handle on Tuesday. According the announcement, each pack of jollof rice would come with a roasted chicken. And the starting price shall be 1,200 naira.
But what are the lessons for entrepreneurs to derive from this unexpected pivot by Domino’s Pizza?
Join me as I share:
Why is it a News That Domino’s Pizza Now Sells Jollof Rice?
For starters, what is the brand name? Domino’s Pizza. That alone gives a clue as to what service the brand is out to offer. They brand themself as the king of Pizza and the whole concept was to offer Pizza alone and make it the best in the market. Of course, that is not a bad strategy at all. After all, Business coaches have always advised us to focus on one thing and be the best in it. And that is basically what Domino’s Pizza decided to do.
And fortunately it has worked perfectly over the years. Even in Nigeria you will notice how successful it has been in the last ten years of operation. In fact, just recently, at the occasion to celebrate the company’s 10 years anniversary in Nigeria, the CEO said that the company’s investment size in Nigeria over the last ten years has climbed to over N26 billion worth of financial asset value. A testimony to the fact that they are making some good progress.
So whether it is in Nigeria or anywhere else in the world, the model of focusing on just pizza has been largely successful. And that is why it generated noises here and there when Domino’s pizza suddenly announced the addition of jollof rice to it’s products offering.
Why is Domino Adding Jollof Rice to its Menu?
So here is where the real question lies. Why exactly did Domino’s Pizza suddenly decide to go into the jollof rice market? Well, Domino didn’t give us any hint via the public announcement. But all those who are familiar with business related news in Nigeria probably knows already.
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1. There is Poverty in the land
First and foremost, in line with Abraham Maslow’s 5-tier hierarchy of needs man’s most basic need is that of physical survival. And it is this need for survival that primarily motivates one’s behaviour. And what are the things listed at the base of that pyramid that constitute our need for survival (otherwise known as physiological needs)? They include air, food, drink, shelter, clothing, warmth, sex and sleep.
Unfortunately, more than 50% of Nigeria population are currently living at the basement of that pyramid – struggling for survival. In fact, a recent report by the Nigeria Bureau of Statistics has it that over 133 million Nigeria are living in poverty. Even though one might want to classify pizza as food, but it is obviously not food for people seeking survival. Poor people in Nigeria look for rice, garri and yam to eat and be full. In fact, at best Pizza will find a place in the 4th level of that pyramid – need for self esteem.
2. The Cost of Running Business is Becoming Higher
The second possible reason Domino’s Pizza has gone from just pizza to selling jollof rice is because the cost of running business in Nigeria has gone much higher.
A liter of fuel now sells for ₦250 – ₦400 depending on which city you are. Diesel is almost ₦1,000. Insecurity is high. Price of flour has more than doubled in the last 12 months. Wheat is even a no go area. All of these have contributed to make pizza hardly affordable for a good percentage of the few Nigerians that could afford it before now. A look at Domino’s Pizza price list for November 2022, shows that the cheapest pizza one can get there is ₦3,200.
The result of all these is that patronage has dropped seriously, yet operating cost still remains the same or even more. A visit to any Domino’s Pizza outlet recently shows the whole place looking like a shadow of it’s old self.
3. Some of Their Customers are Leaving Nigeria
Traditionally, pizza is not a Nigerian food. Only few actually what it is before you talk of patronizing it. Someone rightly said, ‘I take pizza twice in a year, but I eat jollof rice almost every other day’. So majority of the customer that buy pizza from Domino are actually foreigners. But what happens? With the rate of insecurity in Nigeria, most of them are leaving the country. And this is further reducing their market.
So Domino’s decision to pivot and add jollof rice to its menu is actually a survival strategy on its own. But many people are questioning if this is a good move by Domino. Some are arguing that this is now a diversion from its original and core business which has served it over the years.
But let’s look at it again…
Is Domino’s Pizza Decision to Sell Pizza a Good Move?
For me, it is a classic move and not just for survival sake but for expansion and growth. A few people might want to argue that they are diverting from their core business. But it is actually wisdom in business to know when to pivot. As we shall see shortly, entrepreneurs got to be flexible. As a matter of fact, flexibility is one of the core characteristics of all successful entrepreneurs.
In fact, there are many things already going for Domino’s Pizza that will ensure they succeed in that new line of product offering. And I won’t be surprised if in the next 5 years they have made more money from selling jollof rice than from selling pizza.
Already they have started with a competitive price (₦1,200 for a pack of rice and chicken). And those who have tasted it already confess that it tastes nice.
And here are some strategic advantage in other areas that will immediately aid the growth and success.
- They have a fantastic brand equity that is loved by many and can easily leverage on this to attract more customers.
- Their channel of distribution is already superior to most other competitors.
- With 190 outlets across different states in Nigeria they have the geographical spread to immediately stamp their authority.
- With an investment of over 26 billion naira in Nigeria they are not afraid to spend big in terms of marketing to make it popular.
- They’ve got the second mover advantage – should therefore be able to quickly improve on what others have not gotten right in terms of operation.
Business Lessons For Entrepreneurs as Domino’s Pizza Now Sells Jollof Rice
So what are the business lessons entrepreneurs can pick up from Domino’s Pizza decision to start selling jollof rice?
- Don’t ever get stuck as an entrepreneur, be flexible
- Entrepreneurs must know when to pivot
- Every business owner must learn to listen to the market
- Diversification is a strategy when the economy gets as tough as it is today
- Anything that keeps you in business is welcomed
- When you succeed in building a strong brand, leverage it to scale
- Don’t let ego or passion rub you of new opportunities
It is true that over the years Domino’s Pizza has been known for their pizza and ice cream, but right now it is no longer sustainable to continue to deal on that alone. So I see their decision to add jollof rice to their menu as a welcome development. And I think it is a decision they will look back on 5 years from today and be happy they made.
It is as simple as changing the brand name from Domino’s Pizza to Domino’s Foods and every other thing will be fine.
But as an entrepreneur, this should teach you a lesson that passion without customers can lead to frustration. To your passion, add a product that customers are willing to pay for.
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