TelePizza had 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, and 68 stores internationally. The success of TelePizza was mostly driven by great HR management. TelePizza only hired the best people and put a lot of effort on development. This led to an outstanding commitment and high flexibility. People started their position as a delivery person became even franchisees, so franchisees had extensive knowledge in TelePizza business.
TelePizza had a modern three step approach with recruiting, training and evaluating. Also, the company sought to upgrade both its entry-level employees and the responsibilities they handled, to cope with higher-level of employees. To build the brand, TelePizza built up a distinct identity in the customers’ mind by consistent clothes, mopeds and pizza names. Also, the company offered promotions and a Kid’s Club. They were centrally producing their dough in Spain and bought the other ingredients from two or three manufacturers in order to ensure consistent quality and taste.
Apart from the new and appropriate management concept, the market situation in Spain was a big advantage to TelePizza’s growth, because the pizza delivery market in Spain was fairly underdeveloped. To have a further expansion, Telepizza observed three different growth drivers. For domestic expansion, it would be a tough job since there was already too many TelePizzas in Spain. Domestic growth could mainly be obtained by upsizing the volume per order.
For international Expansion, Telepizza seeked to acquire possible targets, otherwise to grow organically when no targets are available. Lastly, Telepizza wanted had recently opened TeleGrill which offered chicken and Rips. TP hoped to introduce a new concept each year. In my opinion, domestic growth should be pursued but not as a primary means of expansion. The Spanish market will be saturated at a certain point, as Spanish people still eats their traditional food mostly.
TelePizza already achieved the market penetration in Spain, and I do not think there would be additional rooms to grow within the country. Introducing a new concept would cause a cannibalization, due to the strong brand of TelePizza. Also, it could be a hard task to keep up with growing expectations by establishing new brands. International expansion seems to be the main reasonable source of growth. The expansion to other South American countries would be relatively easier, as there are many Spanish-speaking countries having similar cultures and tastes of foods.