Disruptive Innovation And Business Model Framework For Domino’s

Business Model Framework for Dominoes

Discuss about the Business Model Framework For Dominoes.

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.

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.

Disruptive Innovation in Modern Business

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 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
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 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.

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.