Creating Value for Customers: Domino's Business Model and Competitive Advantage
Domino's Pizza was founded in 1960, and it is the pioneer of pizza delivery business. As a multinational company and one of the most recognized consumer brands in the world, Domino's competes in the large and highly dispersed global fast food service category. The digital subscription realized by the growth of internet technology and mobile usage has destroyed the company's traditional pizza delivery business model, from pizza production to pizza delivery. Technological changes have prompted pizza fast food to compete in new ways. Pizza Hut, another well-known large-scale global QSR company, Domino's competitor, is mainly based on the competition of speed and quality, technology and price of products and services.
In order to remain competitive, Domino's investment has established a digital function, mobile technology and data analysis platform to distinguish itself from competitors and meet the changing needs of customers.
Digital ordering platform
The convenience of digital ordering process is very important to the long-term success of Domino's customers and the company. According to statistics, in 20 15, about 50% of Domino's sales came from its digital orders, and this figure was higher in some international markets. In order to ensure the sustainability and continuous growth of digital orders, Domino's company made a strategic decision to invest in an internal e-commerce ordering platform. This innovative platform enables customers with online information to reorder their favorite meals within 30 seconds, which greatly shortens the ordering time and overall delivery time. The platform also supports order ETA tracking and delivery updates, thus providing greater transparency. After that, Domino's constantly improved the internal ordering platform to minimize the friction between users and the ordering system and reduce user losses.
Mobile application
Domino's delayed the launch of mobile applications based on smartphones and tablets to attract more and more mobile users to place orders on smartphones. In 20 14, the company launched the voice subscription application Dom, and in 20 15, it launched the SMS and Twitter subscription platform using Chinese characters. These new platforms enable Domino to take full advantage of the growing personalization of services and put users at the center of every digital experience. In April of 20 18, Domino's launched the mobile phone application of 10 second zero-click pizza reservation, which reduced the loss of users by reducing the collision between the system and users. By combining personalization with intelligence, making pizza ordering a social and convenient experience, Domino's has successfully captured young audiences and made its products more stereoscopic by creating network effects.
Integrated point-of-sale technology system and vertically integrated supply chain
Finally, Domino's invested a lot of money in optimizing operational efficiency to reduce costs and provide products with reasonable prices to end customers. The company launched the comprehensive POS system PULSE to improve the coordination between its franchisees and the company office, reduce the number of order errors and improve the training time. In addition, Domino's has a vertically integrated dough manufacturing and supply chain system, which can improve the quality and consistency of products, enable Domino's to take advantage of economies of scale, and enable store managers to better focus on store operations and customer service.
The Future of Domino's Digital Pizza Takeaway
In the past decade, the food industry has attracted a lot of venture capital, so Domino's now faces competition not only from other fast food service companies, but also from food distribution startups such as UberEATS. In order to maintain its competitive advantage, Domino's needs to ensure that it has the right talents to promote continuous innovation. Training and staff development will be the key of Domino's, especially in international expansion.
In addition, Domino's is also exploring alternative delivery methods to reduce costs, such as automatic delivery of vehicles. In this era of digital delivery, the partnership between Domino's and other delivery service providers may also provide opportunities to cut costs, which is very important to maintain profitability.
Finally, increasing the customer base of Domino's will be the key in the future, especially the millennial generation is the main consumer of Domino's. Domino's has a powerful online platform that enables the company to collect data on consumer preferences. The company is also exploring how to use these data to keep ahead of the trend of consumer preferences and innovate its menu products.
Constant technological innovation has transformed Domino's from a traditional fast food chain into a fast-growing technology delivery service company, and even called Domino's a technology company in the media. However, as the company continues to face greater competitive pressure and pressure from other competitors in the future, Domino's is also constantly investing in innovation and continuing to develop and launch an automatic drone delivery and fast booking platform.