Innovation and Business Model: A Case Study of Dominos Australia

Assignment 1: Innovation

1. Business Model and Disruption
Lindgardt et al., (2009) has opined that a business organization without a disruptive focus are
building their business model on a “me too” platform of mediocrity. A disruptive business
model tend to focus on semi-intermediating, reengineering, refining or optimizing its product
or service, role or function or practice, category, market, sector of industry. In this context,
Massa & Tucci, (2013) advocated that a most successful organization incorporate disruptive
thinking into all its business and management practices to achieve distinctive competitive
value proposition. Thus, it raises a question, why some well established and well managed
companies struggle with disruptive innovation? Answering the above question, Markides,
(2013) proposed that it is mainly because companies are involved in doing the same thing in
the same ways for the same reason for such a long time that they struggle with the concept of
change. So, it becomes important that the organizations should not adopt an attitude of
complacency since it kills companies. In this context, an example of Folgers can be stated
that failed in recognizing the retail consumer demand for coffee and thus failed in developing
a Starbucks type business model (Lambert & Davidson, 2013). The main reason for failure of
Folgers can be linked to the fact that Folgers focused more on making incremental gains
through process improvement and was satisfied with its business models and thus failed in
visualizing the innovator coming until it was too late. Their focus was shifted from managing
the opportunities to managing risk and this in turn resulted in brand decline.
Thus, it can be said that with continued rapid technological developments taking the concept
of globalization is making the businesses of all size face the emerging need for adopting a
disruptive business model. So, the executives and entrepreneurs should examine their current
business models from a disruptive perspective. For example, Dominos Pizza experienced an
all time low in its share price and was ranked last in 2009 survey of consumer tastes and
preferences (Mcorpcx, 2018). Just after a few years later, it recaptured its customers’ hearts
and its investors and at present is the second largest pizza chain in the world (Mcorpcx,
2018). This was possible because it embraced the disruptive technological innovations for
optimizing every aspect of its business, especially online ordering and delivery transactions
that can be referred to as its lifeblood.
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2. Analyzing the Opportunities and Threats caused by Advances in Smart-
Connected-Products to the Existing Business Model for Dominos Australia
Smart-Connected-Products offer exponentially expanding opportunities for business
organizations like Dominos Pizza for new functionality, greater reliability, and higher
product utilization and develop capabilities that cut across and go beyond the traditional
product boundaries (Porter & Heppelmann, 2014). However, the changing nature of the
products disrupts the value chains thereby force business organizations to rethink and retool
everything that they do internally to adopt the change.
Smart-Connected-Products also later the industry structure together with the nature of
competition that exposes the business organizations like Dominos Pizza to new competitive
opportunities and threats (Porter & Heppelmann, 2015).
Smart-Connected-Products gives rise to a new set of strategic choices that are related to how
value is created and captured, how the prodigious amount of new and sensitive data that is
generated can be managed and utilized and how businesses can maintain their relationship
with traditional business partners since the channels are redefined (Heppelmann & Porter,
2015).
Thus, the opportunities and threats posed by Smart-Connected-Products for business
organizations like Dominos can be listed as follows:
Opportunities
 Gain competitive advantage through product differentiation.
 Enhance customer satisfaction.
 Achieve operational efficiency.
 By gaining knowledge of how customers actually use the products can enhance the
ability to segment customers.
 Set effective prices to better capture value
 Extend value added services
 Tailor product offerings to specific market segments.
Threats
 Complete business reengineering.
 Huge investments.
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 Inability to maintain relationship with traditional business partners since the channels
are redefined.
 Demand for highly skilled and experienced tech professionals.
 Confusion related to what data to capture, secure and analyze for maximizing the
value of offerings.
3. Application of Business Model Framework by osterwalder and Pigneur
(2010)
According to Business Model Framework by osterwalder and Pigneur (2010), there are nine
elements of the business model canvas framework that belong to four pillars like product,
infrastructure management, customer interface and financial aspects (Luoma, 2014). This can
be illustrated with the help of the following figure:
Table 1: [Source: Al-Debei & Avison, 2010]
Pillar Business Model
Elements
Description
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