Domino’s Pizza is one of the fastest-growing fast-food franchises worldwide and an industry leader with a significant market share in the US and Canada. Since its inception, the organization has grown dramatically to provide high-quality fast food services in various continents worldwide. The organization’s success is based on its unique business model that leverages technology solutions to deliver more efficient services and its swift adoption of these solutions. As a result, Domino’s manages to have the upper hand over competitors like Pizza Hut, Papa John’s, and Little Caesar’s despite having to deal with turbulent business environments. The following passages expound on some of the strengths and weaknesses of Domino’s Pizza, its differences t Pizza Hut, and how its business model gives it a competitive advantage over similar service providers.
The Main Differences between Strengths of Domino’s Business Model and Pizza Hut
Domino’s and Pizza Hut are leading business organizations in the food and restaurant industry, specialized in offering delicious pizza delicacies. Although Pizza Hut is a close rival and a fierce competitor, Domino’s value proposition over the years has overshadowed its predecessor (Tumangkeng et al. 2019). Domino’s Pizza and Pizza Hut both have online delivery systems and resources to run their supply chains. However, Domino’s offers value to its customers by delivering fresh food and packages as fast as possible (Southam et al. 2021). On the other hand, consumers complain that Pizza Hut does not always offer fresh pizza. In addition, Domino’s has branches in various locations including remote areas in the US, while most Pizza Hut outlets are established in commercial centers (Nicholson 2021). Thus, they lose a substantial market share by not venturing in remote areas. Moreover, compared to Domino’s, who occasionally alter their pizza offerings, Pizza Hut sticks to its same flavour, which receives criticism from consumers (Tumangkeng et al. 2019). Thus, these qualities allow Domino’s to gain and retain more customers than Pizza Hut and other competitors.
Domino’s Pizza Business Model
Over the years, Dominos has garnered consumer appeal throughout the globe, which enables it to focus on service provision and enhance the quality of its products. However, it generally depends on young customers from 18 to 35 years, who bring in considerable revenue to the business (Handa 2021). In addition, the organization serves working professionals and families that prefer easily accessible food options (Stanković et al. 2020). Moreover, Dominos sells its pizzas to event organizers and individuals in the entertainment industry, weddings, and birthday parties (Pratap 2022). Consequently, the organization delivers effective marketing campaigns that target all groups in its consumer segments by offering discounts, organizing mega-events, and giving back to the community.
Value Proposition
Domino’s is an organization known to offer value to its consumers through its value proposition. One of the most effective strategies that the organization has adopted to ensure total consumer satisfaction is digital ordering (Trainer 2022). Domino’s allows its consumers to place orders online through a dedicated website and an application. Although other organizations like Pizza Hut also offer online ordering and delivery solutions, Domino’s is focused on minimizing the time taken to deliver pizza, allowing it to win the hearts of its consumers (Beamish 2021). In addition, users can pick up pizzas in Dominos food outlets after ordering online at their convenience, thus providing consumers with time management options and easy access (Idris et al. 2021). As a result, they manage to sustain a steady flow of loyal customers and continuous sales throughout.
Revenue Streams
Compared to other fast food organizations in the US with limited revenue resources, Dominos generates continuous revenue using various channels. Its primary revenue resource is the sale of pizzas (Parmar 2021). However, the organization also receives revenue from sponsorships and advertisements through its application, which constitutes the second largest revenue resource because the app receives millions of downloads (Wolfer 2022). Moreover, the organization also gets income from franchisee fees and loyalties, ensuring its continuous advancement and promising future. For example, in 2018, the organization received gross revenue of $3.34 billion from all its revenue sources which stood higher than the revenue generated in 2017 (McKinnon 2021). Even so, the organization is always working on its expansion strategy, meaning that it will generate more revenue as it takes in more franchisees.
Business Channels
Domino’s Pizza has a straightforward business model in that it either runs franchise stores for its customers or sells pizza directly online. Its business model facilitates its exponential growth as it allows revenue generation from loyalties and supply chain operations (Bakht 2021). Domino’s owns about 2% of stores under its brand, meaning that it limits its engagement with retail functions and processes. However, by focusing on its supply chain, the organization can ensure flexibility and process efficiency (Suganda et al. 2020). The organization facilitates a streamlined operation model for its franchisees and marketing campaigns and promises a return on investment in less than three years (Paul 2019). Thus, they depend on their franchisees and booming business to propel their development. However, its technological innovation strategies set it apart from its competitors as the implemented solutions allow it to offer value and advanced features like real-time ordering and tracking.
Customer Relationships
Domino’s relationship with its consumers is based on trust, and unmatched value as the organization strives to deliver on its promises. The principal organization’s focus is on providing high-quality food and unmatched services compared to its competitors (Kirkpatrick 2018). Apart from its thirty-minute food delivery guarantee, the company actively responds to its customer’s complaints and queries through the phone (Akhter 2019). Moreover, its representatives offer valuable advice on menus and updates on their prices using social media and other platforms (John 2021). The organization also rewards its loyal customers with coupons to encourage positive buyer-seller relationships. Thus, the occasional access to deals, special promotions, and discounts ensures customer loyalty and a continuous flow of consumers (White 2018). Nevertheless, the organization’s revolution was advanced by its adoption of technological solutions like app and site ordering, real-time tracking, and easy ordering using solutions like emojis.
Key Activities
Domino’s engaging in several other activities to run its business and deliver quality services to its consumers. Many business analysts mischaracterize Domino’s as a restaurant supply chain when it is more of an operator and marketing firm (Fang 2019). Domino’s has fast food outlets scattered all over the globe. However, each outlet works toward a common vision of offering exceptional quality pizza and the fastest delivery without interfering with the taste. On the other hand, the organization contributes to the efficient service delivery and success of its franchisees by carrying out promotion initiatives, order management, customer service, product innovation, and international expansion (Kumar 2021). Moreover, the organization is responsible for decision-making toward general consumer satisfaction, obligating it to perform consumer research, study market dynamics, and implement measures to improve performance and business sustainability.
Key Resources
Domino’s global expansion strategy has played a major role in its success and resource acquisition since it operates about 90 stores in the Middle East, Asia, America, Europe, and Africa. Currently, the organization has established about 18,800 locations around the globe (Dube 2020). However, over the past ten years, its international sales have been growing by 10%, accounting for more than 51% of its gross revenue (Hanny et al. 2020). Its main resources are its franchised outlets, its dough manufacturing plants, its supply chain infrastructure, a fleet of vehicles used for deliveries, kitchen equipment, its intellectual properties, its personnel, and its brand (Bridges 2021). Efficiently managing these resources allows them to receive a stable return on investment, thus boosting its business.
Key Partners
Domino’s key partners include its franchisees, vendors, marketing organizations, and business strategy partners. These shareholders perform different roles according to pre-designed requirements and a fixed routine, thus allowing for better organization of processes and efficiency (Wenji 2019). However, the organization works with marketing partners and popular brands like Kagome, Primo, and Visy, located in other parts of the globe, allowing them to take advantage of the huge consumer following in these regions (O’Rourke 2019). Therefore, it aligns its business and marketing strategy with the needs of consumers in different regions according to the consumer landscape and other factors, including social, economic, and cultural variables, which are essential for people’s diverse needs.
Cost Structure
Domino’s incurs a significant cost in essential services like procuring ingredients, delivery operations, operating its manufacturing plants, and operating its physical properties worldwide. Moreover, it spends revenue on advertising and marketing, paying salaries, and employee benefits (Binford 2019). However, the organization generated more than $14.3 billion from its retail outlets in 2019, out of which $7 billion was from the US and $7.3 from its international market. Thus, its business strategy and model have been successful in steering the organization to greater heights.
Dominos Weaknesses and Potential Challenges
Although Domino’s is performing well in its industry, it faces significant threats, especially from established organizations like Pizza Hut, Little Caesar’s, and Papa John’s Pizza as they are steadily gaining ground in the market. Over the years, these organizations have adopted cutting-edge solutions to deliver more efficient services and match the industry giant (Sun et al. 2021). For example, Pizza Hut also offers online ordering and home deliveries at a reasonable price. Thus, they have acquired a notable market share which means limited customers and business for Domino’s Pizza (Andri and Zulfebriges 2019). Similarly, Dominos is at risk of changing consumer dynamics as more people are moving toward health-conscious eating by limiting high-calorie foods (Gogoi 2020). In addition, the organization only offers pizza, while other restaurants have differentiated menu items, including food that suits vegans. Thus, these factors limit the organization’s growth potential.
Conclusion
Domino’s Pizza is a successful organization that manages to sell an average of three million Pizzas daily. As a result, the business generates a continuous revenue flow that allows it to focus on expansion strategies and maximize its business efficiency. In particular, Domino’s experienced a solid transformation and exponential growth in sales during the pandemic as it was quick to respond and adjust. Domino’s Pizza is a leading fast-food chain organization in the US and other parts of the globe because of its extensive consumer base and diverse consumer segment. Nevertheless, its innovative strategies for consumer satisfaction, high quality, and global power give it an upper hand over its competitors. Nevertheless, it is still at risk of stiff competition as organizations like Pizza Hut also have advanced models to engage their consumers. Moreover, it offers limited products, which limits its business growth. Therefore, the organization should improve on its diversity and adopt more diverse food options to ensure continuous expansion.
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