Analyzing Domino's Business Model: Innovation & Sustainability

This essay explores Domino's business model, focusing on innovation and sustainable development, particularly the impact of smart connected products like drone delivery. It highlights the opportunities and threats presented by disruptive innovation and analyzes Domino's business model canvas, emphasizing key resources and value propositions. The essay concludes that embracing disruptive innovation is crucial for companies to maintain a competitive edge and that drones offer a significant opportunity for Domino's to enhance service and reduce operational costs. However, it also acknowledges potential challenges such as data piracy and security risks associated with drone technology.

INNOVATION
AND
SUSTAINABLE BUSINESS
DEVELOPMENT

1
Innovative business has become the need of the modern day business especially in
terms of technologies that company uses. Technological innovations are making impact on
the business of the firm irrespective of the industry they are in. In order to complete with the
global food quality needs it is essential for the company to take use of the innovative
technologies. This helps in adding the value to the products of the firm as well as achieving
higher consumer satisfaction. There is very wide range of domains in which the disruptive
innovation helps the firm. It gives an edge over most of their competitors which is necessary
for the growth in the competitive environment. Disruptive innovations have created so many
threats and opportunities for the firm. Every firm has its own business model canvas which
illustrates about different aspects of their business. Dominoes have been one of the leaders in
the fast food industry especially in Pizza industry (Domino’s Corporate, 2018). This report
highlights the Business model framework for Dominoes as well as the opportunities and
threats that are created by smart connected products in the firm.
In the views of Martins, Rindova & Greenbaum, (2015) Business model for a company
means the rationale of the way in which they generates and captures values and delivers in
terms of cultural, social, economic and other aspects of business. Business model preparation
creates a strategic part of the business. Model for business is understood as the wide range of
formal and informal details that elaborates the core aspects of their operations. It involves
operational processes and policies, sourcing, trading practices, offerings, target audiences etc.
There are three components that are generated by the firm’s business model namely value
creation, value capture and value delivery. All such factors creates financial model which
defines the techniques in which a firm captures economic values from their business
operations.
On the contrary (Christensen, Raynor & McDonald, 2015) states that disruptive innovation
has made their mark in the modern day business. This is due to the reason that they have the
capacity to replace the existing business, leading firm, alliances, established products which
is leading in the market. This type of innovation has the ability to create new market and
generate value network. This is eventually disrupting a value network. It describes related to
the values that any firm offers its potential target market. It increases the profit margin for the
organisation. Smart connected products have the potential of replacing all the products that
are existing in the market hence it is called disruptive innovation.

2
Smart connected products are able to get associated with other goods in a way that they can
send and receive signals from each other. These signals may contain data or some other
product in a way that they can sense the environment and take decisions according to it.
Many decisions are real time based and is taken by the experiences they have in the market.
Smart connected products can be called as disruptive since it has the capability to solve much
larger problems of the existing industries and individuals and hence can replace all the
existing products in the market. In a network smart connected products act as a node where
they are capable of making interaction by sending and receiving the data.
Dominoes is known for its timely delivery of Pizzas to the home but due to the increasing
traffic jams on roads it is becoming hard for the companies to deliver the products with
conventional vehicles. Dominoes are taking use of drones for dispatching the order to the
clients. This is the smart connected product that is highly efficient in solving the problems of
the company in the overly crowded cities (Dorling, Heinrichs, Messier & Magierowski,
2017). These drones are efficient as well as can take decisions regarding the route following
which they need to deliver the pizza. These are capable of taking decisions without human
interventions. This type of innovation is highly required in the fast food delivery services as it
empowers companies to deliver the products on time. This drone technology works on
various kinds of sensors that are connected in a network which helps the owners to control it
from very far distant places. A single controller can manage the delivery of multiple orders at
a single time as they do not have to give instructions to the company on everything.
Company has already started the trail of it in many places and has been successful in doing it.
It provides multiple solutions to the companies as they are not only delivering pizza on time
but also helps in delivering crossing the obstacle like the rivers (Park, Kim & Suh, 2018).
This development is understood as a disruption as it will eliminate large number of
employees that are working in cited firm.
There is a huge amount of opportunities available with the company in terms of this
technology use. This is not only innovative but also provides solutions to the problems that
are generally faced by the firm in providing best consumer satisfaction to the employees
(Murray & Chu, 2015). Dominoes with the use of this technology can deliver pizza to
faraway places from the single unit. This reduces the problem of the company to have a
nearby store for delivering pizza in the shorter duration of time. Apart from this there are
many threats that are also attached with the use of drone technology. The first and foremost

3
challenge that it creates is regarding the data piracy. Each drone that company uses acts as a
node which can be used by the hackers for hacking the whole network. This may lead to enter
into the dominoes system and hence stealing business data. This can act a serious challenge
for the company of such larger scale. Along with this if the hacker can hack the drones then
they can steal the whole drone and can use it for some illegal activities.
Osterwalder and Pigneur’s business model canvas for dominoes is given below:
Key Partners Key activities Value
preposition
Customer
relationship
Customer
segmentation
Local and
national
companies
Manufacturers
International
partners
Franchise
Suppliers
Producing and
serving
delicious Pizza
Promotions,
advertisements
and marketing
Franchised
operations
Healthy food
and having
highest quality
Tasty and fresh
material
Friendly
environment
within the
restaurants
Attention
towards
preferences and
taste of
consumers
Free home
delivery service
Direct
attachment with
consumers
Original taste of
recipes
Service
provided with
the help of
mobile and
online services
Self and
consumer
friendly services
at the outlets
Direct selling
Youngsters
Children
Women
Families
Adults
Every income
level
Key resources Channels Cost structure Revenue streams

4
Restaurant staffs,
chefs, administrative
and sales executives
Restaurant
inventories
Online website
Advertisements
Referrals
Social media
marketing
E-mail marketing
Application designer
Logistics and supply
chain
Taxes
Wages of employees
Cost maintenance
Production and
manufacturing costs
Restaurant payment
Physical sales
Online sales
Franchise
Debit/Credit cards
From the large amount of above based business aspects, two aspects that company can take
use of is their resources and value preposition. The value preposition for the company helps
in explaining the competencies of the firm that helps in making products and services as per
the demand of the consumers. Value is for what customer pays so it helps the firm in
attracting larger number of people towards their business. All their value prepositions helps
them in providing most appropriate business for their consumers so that they can retain their
loyal consumers as well as attract the new potential consumers. Their value preposition also
assists them in expanding their business.
Another business aspect that can help them in their business is their resources and
capabilities. Their resources are of higher quality and the have the capability to extend their
business in different market. With their highly competent business model and their skilled
staffs will help them in achieving all the goals they have set for themselves. Their resources
will help them in implementing all the strategies they have made for themselves as well as
achieving them. Their effective media and promotional campaign helps them in launching
their new products in a better way. Adding of the drone like smart connected product in their
resource stack will help in making edge over the competitors (CNBC, 2016). These smart

5
connected products will enhance their area of service as well as reducing the cost of
operations.
Both of these business aspects will help firm in grabbing all the opportunities that are present
in the market. Their incorporation of smart connected product will help in expanding their
business in new horizons without increasing the investment cost.
In the concluding remark it can be said that there are larger numbers of innovations that are
going on in the market. It has become essential for the companies to have disruptive
innovation so as to replace all the competitors and make their own place in the market. It is
also necessary that a company defines its business model in a way that adds to their
competencies. Drones have been an excellent disruptive innovation in other fields like
security, monitoring etc. and hence have a higher potential to become profitable for the
delivery services for Dominoes. It is having the capacity to replace all the existing methods of
delivering the orders.
REFERENCES
Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). What is disruptive
innovation. Harvard Business Review, 93(12), 44-53.

6
CNBC, (2016). Retrieved from: https://www.cnbc.com/2016/11/16/dominos-has-delivered-
the-worlds-first-ever-pizza-by-drone-to-a-new-zealand-couple.html
Domino’s Corporate, (2018). Retrieved from:
https://www.dominos.com.au/inside-dominos/corporate
Dorling, K., Heinrichs, J., Messier, G. G., & Magierowski, S. (2017). Vehicle routing
problems for drone delivery. IEEE Transactions on Systems, Man, and Cybernetics:
Systems, 47(1), 70-85.
Martins, L. L., Rindova, V. P., & Greenbaum, B. E. (2015). Unlocking the hidden value of
concepts: a cognitive approach to business model innovation. Strategic
Entrepreneurship Journal, 9(1), 99-117.
Murray, C. C., & Chu, A. G. (2015). The flying sidekick traveling salesman problem:
Optimization of drone-assisted parcel delivery. Transportation Research Part C:
Emerging Technologies, 54, 86-109.
Park, J., Kim, S., & Suh, K. (2018). A Comparative Analysis of the Environmental Benefits
of Drone-Based Delivery Services in Urban and Rural Areas. Sustainability, 10(3),
888.