Risk Management Analysis: Domino's Pizza Drone Delivery System

This report presents a risk management analysis of Domino's Pizza's drone delivery system. It begins with an introduction to the company and its innovative drone delivery initiative, highlighting its potential to reduce delivery times and expand market reach. The core of the report involves a detailed risk assessment, categorizing identified risks into strategic, regulatory, business/financial, operational, technical, environmental, and organizational categories. Each risk category is thoroughly examined, and the risks are then ranked based on their potential impact. The report further outlines mitigation strategies for each type of risk, including better delivery strategies, adherence to regulations, robust system maintenance, employee training, and the use of encrypted data links. Alternative approaches like risk tolerance and risk transfer are also discussed. The report concludes by emphasizing the benefits of the drone delivery system while acknowledging the importance of proactive risk management for its future success, suggesting that adopting these mitigation strategies would lead to the successful integration of the drone delivery system.

Running head: RISK MANAGEMENT
Risk Management
[Name of the Student]
[Name of the University]
[Author note]

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Introduction
Dominos pizza is an American pizza restaurant chain that was founded in the year of
1960. The headquarter of corporation is located in the Domino’s Farms Office park in Ann
Arbor, Michigan. In the year of 2018 this corporation became the largest pizza seller
worldwide in terms of sales.
Dominos had been associated with unveiling a new drone delivery system trail for the
New Zealand based pizza customers. This is the new technological initiative that is expected
to have a dramatic slash upon the delivery time of Dominos. This is also expected to help in
achieving a greater market reach than the options which are existing. This report would be
discussing about the various kind of risks that are associated with the usage of the drone
technology (Clothier et al., 2015). After identification of the risks they would be ranked so as
to determine the risks of highest priority. Lastly the report would be discussing about the
techniques that can be adopted so as to eliminate the risks.
Risk analysis
The usage of the drones for delivery system has gave rise to new risks. It is expected
that when the law would get finalized more incidents are likely to occur. This type of
unexpected events might lead to multi-dollar claims against the business (Wolf, 2017). In the
section the different risks that are likely to be faced by the new drone technology have been
categorized and listed.
Identification of the risks.
The different risks have been listed below:

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Strategic: This is associated with considering those risks, which are likely to have an effect
upon the strategic direction along with the process of survival of the organization. Some of
the important factors that are responsible for playing a vital role in this category include the
macroeconomic risks (Ahmed, 2018). This are type of risks that are created by the different
fiscal policies of central as well as the federal governments, along with the impacts that
different disruptive technologies like the Internet is having. These type of risks are also
responsible for making the business decision-making process poor along with the direction
setting, and extend to such things as mergers and acquisitions.
Regulatory risks: There are no particular law and regulation regarding the flying of drones. It
is just possible for the organization to load the drones with an arbitrary amount of payload. In
order to fly the drones, it is essential that the organization gets approval from the authorities
of the country. The usage of the drones has grown at a rapid rate and for this reason the
regulators have not been capable of providing a strong oversight of this technology (Lodge et
al., 2016). The surveillance associated with the drones used for tracking the paths might lead
to breach of privacy which leads it against the law. For this reason, the organization face
certain cases when others launch complains against the delivery drones.
Business/financial: Financial or the business risks are the risks which generally covers the
various affects that the drone technology would be bringing upon the business operations of
the organization. This might be including the financial loss due to unexpected technical
failures of the drones and damage to the drones (Sandbrook, 2015). Unable to delivery
products to the desired customers due to technical errors might lead to huge financial loss to
the organization.
Operational: This is a wide-ranging category of risk that involves the state when any aspect
of the business fails. This type of failure includes the failure of management, failure of the

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system and the software, errors done by human, inefficiencies in the process and failures in
the different procedures (Brooks et al., 2017). However as the technology is new, for which it
is recognized as being an important part of an overall risk management framework.
Technical: This type of issues is associated with inclusion of the incomplete design of the
entire system, incomplete environmental analysis. Besides this, there also exists technical
issues like problems arising when the drones moves out of the receiver range and system
failure. Another major reason for this type of risk is the change requests due to errors, and
formation of inaccurate assumptions related to the delivery distance might also lead to
technical failures. Besides this drone are also vulnerable to cyber-attacks (Enemark, 2014).
As the drone that is used here is not serving for any kind of military purpose, so they rely
upon data links which are unencrypted. The drones for receiving commands, control and for
navigation use this unencrypted data links. For this reason, the hackers are associated with
jamming intercepting and manipulating the controls of the drones making this technology
have high risks.
Environmental risks: Environmental conditions like the heavy rain, storms and many more
might be associated with affecting the drone operations (McNeil, Frey & Embrechts, 2015).
Besides this they are also likely to pose a risk to the wildlife as well specially to the birds.
Organizational: this type of risk is associated which are to be faced while handling the new
technology by inexperienced staff, losing of the drones while delivering orders due to
mistakes of the employees. The risk also includes the delayed deliveries of the orders.
Besides this the functional units might also not be available or might be overloaded.
b. Ranking of the risks –
Type of risk Rank of the risk

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Strategic risk 1
Technological risk 2
Financial risk 3
Regulatory risk 4
Organizational risk 5
Environmental risk 6
Operational risk 7
Mitigation
Type of risk Elimination of the risks
Strategic risk The strategic risks can be eliminated by
making use of the following techniques:
Better delivery strategies are to be adopted.
Following the various fiscal policies of
central and federal governments,
Strategies for elimination of the impacts of
other disruptive technologies (Hopkin,
2018).

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Use of better security of the drones so as to
help it have proper navigation and
delivering the products within time
Technological risk Some of the measures that can be used for
mitigating the various technical risks have
been listed below:
Measures for eliminating the external risks
include the following:
Managing the system properly so as to have
efficient and effective drone delivery system
Making sure that the system and the
software responsible for controlling the
drone’s delivery system is working properly
by regular maintenance (Sadgrove, 2016).
Elimination of human errors by providing
them with proper training so as to work
properly and manage the system efficiently.
Making proper designs for the entire
system.
Marking the range of the drones soas to
make sure that they do not go out of range
Use of proper security measures so as to

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protect the drones from external forces
Use of encrypted data links in order to make
sure that they are not hacked.
Proper estimation for the delivery address.
Financial risk Some measures for eliminating the financial
risks have been listed below:
Making proper risk management strategy
Keeping of backup plan so as to deliver
products even if the drone fails (Wolke,
2017)
Regulatory risk Measures for eliminating the regulatory risk
have been listed below:
Following the rules and regulations of the
country where the organization is operating.
Making sure that there is no breach of
privacy of the others while delivering
products.
Organizational risk Measures for eliminating the regulatory risk
have been listed below:
Providing proper training to the individuals
who would be using the technology

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Assigning of works to people who are
appropriate for doing a particular work.
Making sure that all the functional units are
operating properly (Bromiley et al., 2015)
Environmental risk Proper environmental analysis
Stopping drone delivery in case of bad
weather
Making sure no wildlife is being affected by
flying the drones at a certain level.
Alternatives:
Tolerate: Tolerate or the acceptance of the risk means that the company has taken no actions
to mitigate or reduce the risks. Dominos would be tolerating of only those risks which is not
cost effective and would not be having any kind of impact upon the operations of the
business. The environmental risk is the only risk that is to be tolerated by making use of the
alternative delivery system.
Transfer of risks: This is the type of risk which is associated with usage of different forms
of insurance or is associated with the sharing of the risks with some other third party. For
example, the technological risks that are faced by Dominos. To prevent the system from
getting hacked the organization might take help from third party entities so as to provide
cyber security.
Treat: treat or reduction of the risks mainly indicates the steps that are to be adopted by the
organization Dominos in order to eliminate the various kind of risks or to minimize the

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occurrence of risks. This paper has been associated with depicting certain steps that can be
adopted in order to eliminate or reduce the probability of occurrence of different kind of
risks. For example, usage of trained employees, usage of encrypted data links and many
more.
Terminate: Termination or elimination of the risks is the simplest way which can be adopted
by Dominos in order to fix the risks. But this is a process which has pre-request that is the
risk can only be removed only when the risk is affecting the organization materially.
Therefore, it is essential for the organization to add certain monitoring and controlling
techniques to check the system regularly.
Summary and conclusion
The drone delivery system is used by the organization Dominos would be bringing a
lot of benefits. However, along with the benefits there also exists various kind of risks which
are likely to be faced by the entire drone delivery system. Risks are of various type and this
includes the operational risks, strategic risks, operational risks, regulatory risks,
environmental risks and many more. In this report all the likely risks that are to be faced by
dominos have been discussed in brief in this report. The report also highlights the various
ways which can be adopted in order to mitigate the risks. All this risk mitigation strategies if
adopted would be leading to success of the drone delivery system in future. Drones can also
be used by the organization for other purposes as well besides the delivery system. Drone
delivery system would not only be benefiting the organization but is also a step ahead to the
adaptation of new innovative system.

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Phenomenology of" Living under Drones". Theory & Event, 21(2), 382-410
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introduction to privacy engineering and risk management in federal systems. US
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Affairs, 28(3), 365-381 [Retrieved from
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