Business Model And Technology Disruption – Implications For Domino’s Pizza Australia

Overview of Business Model and Technology Disruption

Question:

Discuss about the Innovation and Enterprise for Dominos Pizza.

A business model is a plan for the company that helps them to generate revenues and make profits as well. The business model canvas explains that what type of product and services the business should manufacture, in what way and what expenses it should incur. Just like business model, innovation and technology are two major aspects that help a business to sustain the competitive edge in the target market (Joyce, & Paquin, 2016).

Further, the purpose of this essay is to provide a brief overview about the business model and disruption in technology. The paper also explains different opportunities and threats caused by the advance use of smart connected products in the company Domino’s Pizza Australia. The business model canvas used explained for the company address the two main aspects that are value proposition and resources and capabilities.

In the viewpoint of Teece (2010), a business model mirrors the hypothesis of what the customers want, how they want it and what amount they will pay for the products and services offered; and lastly, how an organization can organize their activities to best meet the needs of customer and get paid well as well. But it was stated clear that no single definition satisfied the actual meaning of business model (Coes, 2014). Further, a business model can be separated into four aspects that are strategic choice, capturing value, value network, and creating value. Further that a business model is a depiction of the organization’s underlying core reasons and planned options that are for the purpose of making and seizing value within a value network (de Oca, Snoeck, Reijers, & Rodríguez-Morffi, 2015).

Addition to this statement, Baden-Fuller & Morgan (2010), stated that with the help of this model an organization profitably distributes the value in different parts of the company. Supporting to it, Osterwalder (2005), explained in his extensive research that three are total nine building blocks that come together and create a business model for an organization. He explained a broader view of business model by stating that this model is a theoretical tool that includes a set of rudiments and their different relations. According to Osterwalder et al., (2005), the business model is a tool that contains a set of concepts, objects and their relation with the aim to show the business logic of an organization. These elements allow the logic to activities initiated in the business (Martins, Rindova, & Greenbaum, 2015). Further, this model is description of the values offered to different segments of customers, strategy of the firm, web of partners used to initiate activities in the market, marketing activities, relationship capital and process of delivering the value to generate optimum profits for the company. Adding to this statement Michel and Coles (2004) stated a set of questions that properly replies what is a business model.

Relating it to the disruption of technology, Zott et. al., (2011) says that business model shapes the potential of the company to capture opportunity with the use of disruption present in technology. Disruptive technology is now converted into disruptive innovation. Disruptive innovation refers to the innovation that transforms the complex, affluent products and services into stuffs that are so simple and reasonable to people. Robles (2015) stated that the characteristics of disruptive business is that they start with low gross profit and small target markets (Bocken, Short, Rana, & Evans, 2014). Also, they make simple products and services may not look attractive but provide output from the use. Further, innovation challenged the top-down view of innovation which was introduced by the Michael Porter in his theory Competitive Advantage (Osterwalder, & Pigneur, 2010). Further, it should be noted that digital disruption is a technology , tool, process, behavior or a business model that changes the clients according to their behavior and expectations with the values. This also helps them in serving in a better way, more cheaply and faster as well (Carayannis, Sindakis, & Walter, 2015).

The Business Model Canvas

Domino’s Australia was incorporated in the year 2002 as a pizza restaurant chain company. The company operates its business in business at almost 13,800 locations in over 85 markets all around the world. The basic menu of the company includes pizza products of different types (Domino’s , 2018). Relating the business model with the use of technology in their business, it should be noted that, disruptive innovation creates identification of the company in the target market. Under this process, smart connected tools are used that helps the business to grab opportunities and earn well (Christensen, Raynor, & McDonald, 2015). These tools are embedded in the processor or software and allow the interaction of data between the respected departments. With the help of this tool, the company efficiently records the inventory and serves its information to the manufacturing department. If there is decrease in the economic order quantity, then the warehouse informs it to the manufacturers with the use of such tools. Thus, it gives an opportunity to the company to never go out of stock. Further, this process also gives an opportunity to the Domino’s Pizza, Australia to succeed in their waste management activities (Osiyevskyy, & Dewald, 2015). As, with the help of such products the organization can record the waste disposed and forward its information to the respected departments, also they can form measures and collectively aim to approach it as well. Therefore, this tool helps in connecting the people and departments of the company that are beyond their geographical reach. Further, the biggest threat to Domino’s Australia with use of smart connected tools is that defect in this tool can stop many activities of the organization in between. In addition, if the management to different departments of Domino’s Australia circulates wrong information then they can face losses as well. The biggest threat is the mugging of information stored in the cloud with the use of such tools (Sok, Snell, Lee, & Sok, 2017).

Value proposition aspect in the business model canvas explains the competence of the company to tackle challenges and create compelling product and services that the customers wish to buy. After designing the business model, the management of Domino’s Australia need to understand the requirements of customers and value proposition that they are willing to buy. Further talking about the value proposition of Domino’s, it should be noted that the aim of the company is to tasty and rich quality food to the customers present in the market (Marler & Fisher, 2016). Looking at the market segment of Australia, it was evaluated that the customers will buy the products of the company only when they are eye teasing and mouth-watering. So, the value proposition which they include in their model aligns to the expectation of the customers. Further, the value increases when the company provides a soothing experience to the customer at the outlet. This will help in making repeated sales as well. Free home delivery and good taste acts as benefit for the company to attract customer attention (Maritan, & Lee, 2017).

Disruptive Technology and Innovation

Next is the resource and capabilities aspect of the business model canvas, it should be noted that the company has qualified resources and capabilities present with them due to which they are running properly in diverse parts of the world. The work force of the company is the most important resource of the company that helps them in growing. The partners also help in increasing the sales by offering different values to different customers present in the market. They also promote the products in the different markets as well (Covin, Garrett, Kuratko, & Shepherd, 2015). Good media and promotional strategy act as a capability of the company Domino’s Australia to earn well in the target market. These activities attract the customers and help them in knowing about the specifications of the product that influence the customers to initiate sales for the company. Resulting to which revenue is subsequently increased (Zott, Amit, & Massa, 2011).

Thus, in the limelight of above-mentioned events, it should be noted that the business model is an important tool that helps any business to grow in the external market. It helps the business in identifying its resources and capabilities with the help of which they can excel in the target market. Further, the business model canvas also helps in attaining information about the value proposition that should be introduced in the product to provide better level of satisfaction to the customers. Lastly, from the above findings it was analysed that this model will help the company to sustain their growth in future. It will also help them to analyse the challenges and risks in advance and learn techniques to properly face them.

References

Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of cleaner production, 65, 42-56.

Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business model innovation as lever of organizational sustainability. The Journal of Technology Transfer, 40(1), 85-104.

Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). What is disruptive innovation. Harvard Business Review, 93(12), 44-53.

Coes, D.H., 2014. Critically assessing the strengths and limitations of the Business Model Canvas (Master’s thesis, University of Twente).

Covin, J. G., Garrett, R. P., Kuratko, D. F., & Shepherd, D. A. (2015). Value proposition evolution and the performance of internal corporate ventures. Journal of Business Venturing, 30(5), 749-774.

de Oca, I. M. M., Snoeck, M., Reijers, H. A., & Rodríguez-Morffi, A. (2015). A systematic literature review of studies on business process modeling quality. Information and Software Technology, 58, 187-205.

Joyce, A., & Paquin, R. L. (2016). The triple layered business model canvas: A tool to design more sustainable business models. Journal of Cleaner Production, 135, 1474-1486.

Maritan, C. A., & Lee, G. K. (2017). Bringing a resource and capability lens to resource allocation. Journal of Management, 43(8), 2609-2619.

Marler, J. H., & Fisher, S. L. (2016). The eHRM Value Proposition: Introduction to the Special Section. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l’Administration, 33(2), 91-94.

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.

Osiyevskyy, O., & Dewald, J. (2015). Explorative versus exploitative business model change: the cognitive antecedents of firm?level responses to disruptive innovation. Strategic Entrepreneurship Journal, 9(1), 58-78.

Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation. New Jersey: Wiley (the unit textbook). The textbook is available from the CQUniversity library for free.

Sok, P., Snell, L., Lee, W. J., & Sok, K. M. (2017). Linking entrepreneurial orientation and small service firm performance through marketing resources and marketing capability: A moderated mediation model. Journal of Service Theory and Practice, 27(1), 231-249.

Zott, C., Amit, R., & Massa, L. (2011). The business model: Recent developments and future research. Journal of Management : JOM, 37(4), 1019-1042.

Domino’s , (2018). Inside Domino’s. Retrieved on 19 April 2018 from https://www.dominos.com.au/inside-dominos

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