Topic > Case Study Telepizza - 1310

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 this in the TP concept: • Management philosophy: TP hires only the best people and puts a lot of effort into development. This requires exceptional commitment and high flexibility. People who prove capable advance in their careers or even become affiliates (affiliates are therefore also capable and competent) • Human Resources: TP has a modern three-step approach with recruitment, training and assessment. They try to match the mindset of managers to the TP strategy. • Workforce challenges: Unlike competitors, TP hasn't tried to make pizza delivery as easy as possible. To address high staff turnover, TP has instead sought to upskill both its entry-level employees and the responsibilities they handle. Together with performance measurement systems, it was possible to evaluate employees. • Increase sales through service: TP has devised new ways to satisfy customers. Additionally, employees were trained on how to act in favor of customers. • Brand Strength and Quality: TP builds a distinct identity in the minds of customers through consistent names of clothes, mopeds and pizzas. Furthermore, TP also sells side dishes. TP offers promotions and a kids club. They produce the dough centrally in Spain and purchase the other ingredients from two or three producers to ensure consistent quality and taste. Apart from the new and appropriate management concept, the market characteristics were in favor of TP, because the pizza delivery market in Spain was rather underdeveloped.2. Evaluating growth optionsTelepizza has an almost obsessive commitment to growth. They currently have three possibilities: expansion into the domestic pizza market, international expansion or the introduction of new concepts such as TeleGrill.• Internal expansion: growth has been 20% per year in recent years and Telepizza is positive for a continuous growth in comparisons with the US market. TP knows on the other hand that market penetration will be a difficult task since in every Spanish city with more than 20,000 inhabitants there is already a TP. Therefore, internal growth can be achieved mainly by increasing the volume per order. In my opinion, internal growth should be pursued but not as a primary means of expansion. Table 7 showing the average spending on pizza in Europe and the United States makes it clear that bringing the demand for Spanish pizza closer to that of the United States is not a valid method for estimating.