Telepizza

TP has grown from a single store in 1988 to the largest pizza chain in Spain. At the end of 1997 they had 399 stores and an estimated market share of 62% in Spain. But what made it so successful? There are several reasons for that in the TP concept:

• Management philosophy: TP only hires the best people and puts a lot of effort on development. This leads to an outstanding commitment and high flexibility. People who prove to be capable climb up or become even franchisees (Franchisees are therefore capable and skilled as well)

• Human resources: TP has a modern three step approach with recruiting, training and evaluating. They try to match the managers’ mentality to the TP strategy.

• Workforce Challenges: Unlike the competitors TP did not try to make pizza delivery as easy as possible. In order to cope with a high employee replacement, TP instead sought to upgrade both its entry-level employees and the responsibilities they handled. Together with performance measurement systems, employees could be evaluated.

• Growing sales through service: TP came up with new methods to satisfy customers. Furthermore, employees got trained on acting in customers favour.

• Brand building and quality: TP builds up a distinct identity in the customers’ mind by consistent clothes, mopeds and pizza names. Furthermore TP sells side dishes as well. TP offers promotions and a Kid’s Club. They are centrally producing their dough in Spain and buy the other ingredients from two or three manufacturers in order to ensure consistent quality and taste.

Apart from the new and appropriate management concept, market features were in favour of TP, because the pizza delivery market in Spain was fairly underdeveloped.

2. Assessment of growth options

Telepizza has an almost obsessive commitment to growth. At the moment, they have three possibilities, namely expansion within the domestic pizza market, international expansion or introducing new concepts as TeleGrill.

• Domestic Expansion: Growth has been at 20% p.a. during the last years and Telepizza is positive for an ongoing growth by comparisons to the US-market. TP knows on the other hand that market penetration is going to be a tough job since there is already a TP in every Spanish city with more than 20.000 inhabitants,. Hence, domestic growth can mainly be obtained by upsizing the