Answer

Economic Analysis on Domino’s Pizza 

Elasticity

            A product is perceived to be elastic when the quantity of the product demanded changes drastically upon an increase or decrease in its price. The price elasticity of demand for the pizza product provided by Domino’s pizza is elastic based on the fact that the recent sales recorded by the firm increased by approximately 50% in when the cost of the commodity dropped by 28% (Singh, 2019). This provides a depiction that a slight change in the prices of the pizza can result to a significant change in the demand of the commodity. Having this knowledge, Domino’s Pizza can increase its revenue by slightly decreasing its prices without recording any significant decrease in the sales levels (Singh, 2019). With an aim of making its commodities more inelastic, the company can rely on marketing its pizza to the consumers by depicting that it is a healthy food option and one with is also necessary despite it being a fast food. The business can also achieve inelasticity by introducing new product brands which are not offered by the competitors in the market. The outcome would be effective in making the company’s products more inelastic (Singh, 2019).

Impacts of an Event on the Company

            The Coronavirus (COVID-19) pandemic is one of the events that has significantly impacted the economic performance of companies with Domino’s Pizza Limited being one of them. The COVID-19 pandemic has affected the company in various ways. For instance, the event has affected jobs as noted with the increased layoffs being experienced by businesses in the sector as most are not able to meet the market demand, and thus not in a position to raise enough money for its wages. However, this is not the case for Domino’s Pizza. According to Reiley (2020), Domino’s pizza has a strategic plan of hiring approximately 10,000 more employees to meet its increased delivery demand amidst the outbreak. Notably, the coronavirus pandemic has resulted to increased online business which has intensified the rate at which Domino’s pizza delivers its products to the consumers in their homes.

            The COVID-19 event has not negatively affected the sales outcome for Domino’s Pizza. Coley (2020) supports this factor by depicting that the company’s sales have remained positive. During the first quarter of 2020, the domestic online sales of the company grew by 1.6%. The corporate stores sales rose by 3.9% and 1.5% rise was recorded at the franchises (Coley, 2020). In addition to the increase in local sales, it is evident that the international sales of the company have also risen amidst the closure of the pizza brand’s international markets in 23 destinations.  Coley (2020) further points out that the same-store sales increased by 1.5% during the first quarter.

            One of the factors which explains why the pizza segment has not experienced a drastic decline amidst the coronavirus pandemic, gauged on a per-person basis, is based on the fact that pizza is considered to be a product of a high value (Coley, 2020). Evidently, a single pizza can feed more than one person at a low cost. Therefore, the product has recorded a rise in the customer sales even as other food commodities have been recording a drop in sales due to the pandemic (Coley, 2020).