Discuss about the Domino’s Pizza Australi’s Business Model.
The organization utilizes a business model which guides its process in terms of the process of production as well as marketing of the product of the organization to ensure that the set objectives of the organization are reached at. It is due to this that has made Domino’s Pizza in Australia to have its own business model. The business model involves the plan for the business showing the operation of the organization with the target of generating profits. It explains the services and products to be offered to the market and the strategies involved for instance the costs to be incurred in the process (Zolnowski et.al. 2013). Additionally, the model outlines procedural plans for profitability to be realized by the business. The models vary from one business to another, for example, the model of online business is significantly different from that of the restaurant business. In making an effective business model, the value proposition of the organization is regarded. It helps the organization to outline ways of offering goods and services to its clients aesthetically in order to be outstanding in the market segment (Casadesus-Masanell, & Ricart, 2010). Crucial aspects such as the startup costs, the sources of financing, expenses, projections of revenues and the target strategies are considered. It should also be closely related to the existing business for easy adaptability. Disruption of the business, on the other hand, entails the state of the business to shift in profitability from the existing business model to the new one. During the shift, the businesses are advised to be careful in order to prevent loss of clients. Most of the organization is driven by the use of digital technologies to embrace change for the organization. Organizations need to focus on the right to win, embrace new logics and start immediately to move the organization (Thompson & MacMillan, 2010). The paper unfolds various aspects of the business model employed by the Domino’s Pizza in Australia.
The smart products for the company exposed the organization to new opportunities of revamping its market sphere through the strategic steps of the model. Customers in the regard were brought on the online platform, therefore, they had the capacity to see when the products of the company were ready. Such goods were immediately released giving room to produce more products, therefore, increasing the rate of selling the products (Teece, 2010). The company was exposed globally. The steps of the model further exposed the company on the opportunities of expanding the market of the organization, increased innovation of the products of the company and the urge of insisting clients to stabilize the market through online approaches. Through the online platform, the organization had the opportunity to listen to the views of its clients with the target of promoting the growth of the product. The organization had an opportunity of improving its recipe so as to promote the growth of the product. These led to revamped costs of the product due to increased quality that exposed the company to stiff competition by its rivals who offered their products at lower prices in order to stand in the market (Zott & Amit, 2010). In order for the company to survive in the market, it was forced to improve the quality of the product and avoided to raise the price of the product unreasonably which otherwise would have scared more clients away. Furthermore, the organization due to its new brand of the products had the opportunities of expanding internationally, saturating the market of the United States (Kowalkowski et. al, 2011). Despite the fact that the home market is stagnating, it is clear that the global market is growing rapidly. The Pizza market is growing internationally due to the quality of the products produced. The organization has a duty not only to expand its market but also check the technologies employed to conform to the current market. The company to combat competition, the opportunities of changing the rivalry with the competitors by clearly drawing a differentiation in its market through approaches like the rebranding of the product, price tagging that is convenient to the customers, improved quality as well as easy access of the product (Casadesus & Ricart, 2010).
Organization in making these new brands of products is exposed to various threats that range from production to the market spheres. It is a great challenge for the organization to maintain the design of the product (Perkmann, & Spicer, 2010). Also, due to the profound rivalry of the competitors offering stiff competition the organization is at risk of lowering the products’ price in order to remain firm in the marketing. These changes expose the organization to realize small profits thus slow rates of growth. The company incorporating the new systems of production is an expensive approach in terms of acquiring the products and training the personnel for operating such systems. The company has a threat for not only keeping the momentum of sales high but also expanding the company of which its competitors are working on the same approaches. The organization has not yet achieved the quality of the Pizza as per the standards required this is the reason as to why the local shops have offered stiff competition barricading the growth of the firm (Björkdahl, 2009).
The model has led to the effective operation of the business, for example, the increased market segment, high profits realized as well as advanced in the IT infrastructures are attributed to the new business model for the company. The company due to the new model, it was the appropriate move for the organization. The model has led to increased sales of the product by 14.3%increase in the year 2010 (Palo & Tähtinen, 2011). Additionally, the stock of the company had an increment of 130% from December 2009. In November 2011, the organization was able to hit a high share price of $ 32.50 per share. The domestic store of the company advanced to realizing an increase of 6.3% in the last quarter of 2010. Additionally, the positive consumers’ response, as well as increased store traffic, proved that the model was indeed the best. With the new model, the company was able to post a total of revenue of $ 1.6 billion from $ 1.4 billion realizing an increment of 11.9% (Doz & Kosonen, 2010). The increased market segment led to increasing in the sales of the products resulting in high profits. The dominance in the market was achieved due to the incorporation of online sector making the organization to be accessed online by clients ordering the required products promoting the sales. These new changes in the organization were achieved within the shortest period of time despite its initial position which was high, realizing these changes got many experts out of surprise. The technology of the company was revamped and the production of durable goods was achieved. However, the company needs to fight in order to maintain the growth of the market as well as expand its hopes of development. Additionally, based on the performance of the organization positive financial sustainability has been realized by the company. The model achieved impressive approaches not only on the way the organization approached the clients but also on the way it embraced change in the organizational structure, organizational culture and the technology approaches that encouraged service delivery to the clients (McGrath, 2010). The model ensured that the organization rebranded itself in the minds of the public attracting new clients as well as maintaining the existing ones of the organization. The model targeted at the innovative approaches of the company and the creativity aspect in order to ensure that the organization stands out aesthetically leaving its competitors far away (Thompson& MacMillan, 2010).
Basing on the analysis, the organization works smart in the utilization of the resources available with the aim of ensuring that the costs of the resources used at low. In order for the organization to realize high profits working on the reduction of input is the main drive which ensures that for profits to be made the price should not be increased profoundly. In the process of production, resources are key to success making the Domino’s Pizza use effective technologies and branding approaches in order to get the best end product (Gebauer & Kowalkowski 2012). Additionally, the organization focuses on the value generations in order to enhance best returns. The business is forced to an extent its resources basing on the specificity and perspective of the clients in order to ensure favorable competition by the company. The clear distinction image of the organization is clearly created by the company facilitating the firm to stand differently on the market sphere. The organization in this regard strives to have a competitive advantage over its competitors. Some of the approaches being embraced by the organization entail adaptive capabilities, innovative capabilities, networking capabilities and dynamic capabilities enhancing the growth of the organization (Demil & Lecocq, 2010).
Following the approach, the business works hard to ensure that value is provided to the customers as it makes money for its growth. In the model, the business establishes the number of clients it will have and the units per customers per transactions to be made. The approach is based on revenue model aspect (Bock, et.al. 2010). In the model, both the fixed costs as well as the variable costs are well analyzed by the business venture. The aspect of the target unit margin is regarded too. In this aspect, the organization has been able to align transactions that yield in order to cover the overhead costs with the view of establishing profits. The company has been able to rework in its assumptions in order to achieve the set goals. Resources velocity is also regarded in this aspect such that the organization designs the speed of using resources with the target of making profits speedily (Chesbrough, 201).
To sum up, the organization through utilization of the new model has experienced milestones in development resulting to the expansion of the organization internationally. The advancement in the technology, as well as improved infrastructures, are the key drives of the model, the organization has achieved these and it is still looking at the approaches to improve on them. The adoption of the model has led to change in pricing approaches such that the organization has worked on how to improve the quality of production of the product while working on the price to ensure that it fits the current market. Additionally, it is evidenced that the organization has been able to employ new strategies of branding to initiate a difference in the market which has been realized internationally. The market has also been reached via the online platform, which is giving the company the best results. When these approaches being embraced by the company are worked upon on how to improve them the way the company is doing currently, the local market will be enhanced as well as the international markets. Therefore the future of the organization is great.
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