Today’s business world is filled with buzzwords like “Blockchain” and “AI” and we encounter the existence of new innovative technologies on a daily basis. But do you as a business always need an amazing new technology in order to maintain growth? I don’t think so. Companies are able to extract successes by improving their business models and thereby the way they make money.
Of course, comping up with an groundbreaking new technology might enable for a big boost in the growth of the company without a doubt. Nevertheless, if we dive deep into the truly embedded roots of the company, looking at the true engine mostly gets down to its business model. This is the foundation and the fuel of the company. Especially transforming the traditional business model into a digital one, is a promising transformation a business can take on.
For instance, let’s look at Domino’s. We all know them from their American pizza’s with thick crusts and their delicious cinnamon rolls. However, what you might not expect is that Domino’s was on the brink of bankruptcy in 2008.
Now, more than 10 years later, Domino’s shares are worth 80 times (!) more than back in the day in 2008. How come? It all started with their new digital business model: e-commerce. Domino’s digitized its business model by enabling customers to order their pizza’s via digital platforms instead of only through the phone or in the store. Furthermore, going online enabled the company to add multiple features in the platform such as a personal profile and loyalty programs.
This in turn, led to more transactions and improved the whole customer experience by making ordering pizza an enjoyable experience.
The take-away is that this whole new business model enabled Domino’s to create a new brand image and improved their customer value propositions by turning their old and conservative business model into a digital one, just in time to not go bankrupt.
References
https://hbr.org/2018/12/digital-growth-depends-more-on-business-models-than-technology
https://hbr.org/2008/12/reinventing-your-business-model
https://www.entrepreneur.com/slideshow/333374
Dear Mane,
Thank you for your contribution!
Do you know what their next step will be? As of now, most pizza places have a delivery service. What should their next digital strategic decision be? Or, which technology should they implement as a tool?
Hi Mane,
Thanks for sharing this interesting blog post. I agree that the growth of Domino’s over the past years is astonishing. According to LHBSC (2017), Domino’s stock has outperformed Amazon, Apple and Google for the past 10 consecutive years and has increased in similar manners as Netflix. What is especially fascinating to me is the fact that Domino’s has understood the holistic customer journeys and is adjusted business processes accordingly. For instance, Domino’s allows customers to track every step of their order preparation thanks to smart sensors installed in every store. Customers are alerted to every step of their order and can conveniently track the process, allowing for transparency and reliability. Additionally, U.S. customers can even place an order by tweeting a pizza emoji to Domino’s Twitter account on the social media platform. Moreover, the Domino’s app allows customers to place an order solely by talking to the app, making ordering extremely smooth and interactive. Domino’s also offers an “easy to order button” (which is comparable to the amazon dash button), which will immediately place a predefined order. Domino’s “zero-click app” is working in similar ways and immediately places a predefined order upon opening the app. Moreover, there are applications available on the Xbox and for Ford cars which allow customers to use different channels to place an order. LHBC (2017). From a commercial perspective, it is very impressive that a food company was able to build such strong technological capabilities within a considerably small timeframe. However, my personal opinion is that Domino’s should start to focus on improving the quality of their pizzas more.
https://de.slideshare.net/LHBSC/dominos-strategy-from-pizza-to-tech-giant-customer-value-series