Providing an Introduction to Domino’s
In order to attain potential growth and advantage competitive market, and business firms needs to adapt strategic tool of environment analysis. A firm to prepare a business strategy includes certain factors such as company’s internal analysis as well as external analysis. Hierarchy framework of the company is required to assess for designing the business strategy. In this assignment, Domino’s business practices and strategies will be evaluated by involving its size and scope as well as hierarchical structure. The impact of corporate social responsibility and environmental management for Domino’s and the framework required to address this sustainability will be demonstrated here. The key success factors that contribute Domino’s success competitive market will be analysed here. Finally, the challenges faced by Domino’s and the mitigation plan will be designed here.
Domino’s one of the largest brand of America which was established in the year 1960. Headquarter of Domino’s in America is Ann Arbor (Dominos.co.nz, 2017). This company has expanded its business major cities like UK, New Zealand and India. It has acquired the highly expanded business market by its business activities and other potentials. The nature of the business highlights that the business activities of Domino’s involves Gourmet Pizza and Traditional Pizza. Domino’s offerings also include extra value pizza with cold drinks and garlic beards. In its special offerings, it provides gluten-free pizza. It provides dine-it facility with pick up and home delivery policies (Dominos.co.nz, 2017).
The major focus of Domino’s is to get a competitive position in market. As it is one of the leading Pizza Brand, it required to expand its business in other potential BRICs countries. The customer focus of Domino’s is high and middle economic people especially the age group of 20-60 years (Dominos.co.nz, 2017).
It has extended scope in market as the high-level competitors in Pizza industry is less as there is only Pizza, which also has high brand position. Thus, it has market expansion and competitive advantage scope in New Zealand.
Figure 1: Corporate Hierarchy structure of Domino’s
Domino’s incorporates the hierarchical structure in its business activity to ensure the formal communication n and quick decision-making process in firm. Domino’s can use the corporate hierarchy by arranging the position of the staffs based on their status, power and job roles. Vitalis & Scott (2015) stated that on the other hand, in order to adapt with functional hierarchy, the management has to separate all the functional departments for their better performance. Finally, the business hierarchy focus on the importance level of the job role in firm. Domino’s being of the leading Pizza adapts to the corporate organisational structure where the president will at the top of the power and then the managers will be next. Bres (2015) observed that all the subordinates of the managers will be at the lower level of hierarchy who has less power and importance in decision making.
The framework of corporate hierarchy of Domino’s influences the business activities and contributes to potential growth of firm. Dey & Cheffi (2013) pointed out that the corporate hierarchy ensures one way communication and quick distribution of decision which helps the managers of Dominos to implement any strategy easily. On the other hand, employees can contribute in developing creativity by performing their job role within time.
Identifying and Distinguishing the Organisational Strategic Hierarchy of the Firms in Collaborating with Functional, Business, and Corporate Strategies
This particular hierarchical strategy contributes in the decision making as in this organisational structure lower employees are not involved in this decision-making process. Even, the senior managers assess the credibility of the employees before including them in the decision making process. O’Brien (2015) mentioned that any structural flaw like less cooperation and coordination can be addressed by the higher level managers in Domino’s by incorporating corporate hierarchical structure. One of the adverse impact of this hierarchical structure of Domino’s is that by preventing employees in the decision-making process, it affects the productivity and motivation level of the employees which can affects the performance of Dominos (Cooper, Boston & Bright, 2013).
PESTLE
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Factors |
Analysis |
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Political |
The Government of new Zealand has adopted a policy of tackling obesity by controlling the consumption of gluten in 2017. This Healthy Food Environment Policy Index with governmental obligations can adversely affect the performance of Domino’s. |
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Economic |
New Zealand has GDP of 185 billion USD (2016). This determines that people in New Zealand has purchasing power which acts beneficial to Dominos. 1.75% is the interest rate of New Zealand according to the new Zealand reserve bank (Treasury.govt.nz, 2016). This leads difficulties in operational cost of Dominos in the concerned country. |
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Social |
The total population of New Zealand is 4.8 million where 65% of total population are in between the age limit of 15-64. Vitalis & Scott (2015) stated that Domino’s targets this age group, which is highest demography. Thus, this will benefit the business profitability of Dominos. |
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Technological |
In Pizza Industry, New Zealand, advanced technologies are being used in ordering and delivery process as well as manufacturing. Domino’s offers ordering process through mobile app. Even, the delivery driver comes up with GPS trackers to find exact location of the customer. As an effect of globalisation, Domino’s offers a Gourmet range of Pizza especially for the customers of New Zealand. |
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Legal |
Food Act 2014 determines that food offered by Pizza companies needs to contain value-added nutrients. In Food Act 2014 section 292 mentions the safety requirements in the packaging of products (Legislation.govt.nz, 2014). As gluten creates obesity, these acts focus on obligations for pizza with an excess amount of gluten. |
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Environmental |
Environmental Act 1986 impact on the business operation Domino’s as the senior authority of Domino’s need to concentrate on eco-friendly packaging with the raw material collection (Legislation.govt.nz, 1986). |
Industry Life cycle
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Factors |
Analysis |
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Development |
In the stage of development, Domino’s has analysed the existing trends in Pizza that are prevailing in the market. Domino’s Pizza has identified that people are attracted towards gluten-free Pizza with traditional taste. Thus, it has differentiated its products according to the trends developed by existing competitors. |
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Growth |
In growth stage, it has attained less rivalry in the New Zealand market as major Pizza companies have not entered the New Zealand market (Scott, Cavana & Cameron, 2016). |
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Shack out |
In shake out stage, the competition becomes tough for Dominos as Pizza Hut makes its market entry. Vitalis & Scott (2015) stated that even, the industry drivers like, customer’s purchasing power and governmental policy became strong enough to resist the business activities of Dominos. |
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Maturity |
In maturity level, Dominos will attain highest profitability and growth as the purchasing g decision and power of the buyers will become strong. The moment profit increases and growth of the entire industry will follow the same (Nilakant et al. 2014). |
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Decline |
After maturity level, the industry will start to decline due to the presence of differentiation products in which customer will be more interested to spend. |
SWOT
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Strengths · high brand recall · It has expanded distribution channel · Quick delivery services with large variety of menu · The alternative product cost is low for Dominos · It provides gluten-free healthier alternatives for customers · It has extended and efficient value and supply chain. |
Weaknesses · In mature markets, the t sales of Domino’s decrease · The staff retention level is low for Dominos · Most of the outlets of Dominos have delivery outlets fewer eateries, which affects the customer satisfaction. |
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Opportunities · It has the large opportunity for market expansion and market penetration. · It has opportunity to target the health-conscious eater |
Threats · Indirect and direct competition with Pizza Hut · The ever-changing eating habits of customers with health awareness · The rise in vegetable cost and dairy products can be a potential threat for Dominos |
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Valuable Domino’s has more than 3000 employees who are skilled This helps the concerned organisation to get customer satisfaction through effective services. Thus, Human resources of Domino’s are valuable to gain competitive advantage. |
Rare The technological resources like GPS driver and mobile application for ordering are rare in market which leads to competitive parity for Dominos |
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Imitable Though other competitors can imitate the technological resources, however, they will not be able to imitate the financial resources as Domino’s has second highest revenue among Pizza companies in New Zealand. |
Organises Domino’s uses its financial resources to recruit skilled employees, train them so that they can operate advanced technologies, and ultimately create value in the firm. Thus, the resources of Dominos are organised. |
The key factors of Domino’s involve its recipe as it provides an extensive menu, it can lead to customer satisfaction and ultimately profitability. Domino’s offers gluten-free pizza for health concern customers; another key success factor is its promotional strategy as it delivers a range of offers with social media-based marketing strategy.
Figure 2: Success factors of dominos
(Source: Calvo-Mora, Navarro-García& Periañez-Cristobal, 2015, p.1640)
The cost of the prices offered by Dominos is affordable to its target market, thus, affordability of its products can provide success to the same. The competition between Pizza Hut and Domino’s is stiff, however; lack of other Pizza brands in the market can lead to the success of Dominos. Calvo-Mora, Navarro-García& Periañez-Cristobal (2015) asserted that the final success factor for Domino’s is it’s more than 3000 skilled and experienced employees. Their employees are highly motivated towards its brand’s objectives that can enhance the performance of Dominos.
The recipes of Dominos lies the success factor of the company as customers sometimes like thick pizza with less crust. Vitalis & Scott (2015) stated that even customers have mild sauce and salad with specific toppings. Thus, customer’s preferences need to be included in the menu and even gluten-free pizza is also available in New Zealand menu, which thoroughly contributes to customer satisfaction. The delivery process by using GPS values customer’s requirements that also concentrates on the success of Dominos. The prices of Pizza will help customers to have the taste of Domino’s pizza, which also provides competitive advantage to the same. Osei-Kyei & Chan (2015) mentioned that the less competition in the market provides fewer alternatives which can provide success to Domino’s. Finally, the employees with their skills and efficiency level can address the customer’s requirements, which can contribute Domino’s success and profitability.
The major sources of sustainable competitive advantage are extensive capabilities of research and development. On the other hand, other sources of sustainable competitive advantage are superior stakeholder support.
Figure 3: Sustainability and competitive advantage sources
(Source: O’Dwyer & Cormican, 2017, p.786)
These two sources are capable to attain the success factors of Dominos as if Domino’s acquires the ability of market research, it will be able to include existing trends of Pizza recipes in the menu. O’Dwyer & Cormican (2017) pointed out that even the promotional strategy can be improved by identifying existing trends. Source priority stakeholder acts as another source, which helps in enhancing the performance of the employees. If the stakeholder provides a positive contribution to the business performance, the concerned organisation will be able to attain the competitive success and sustainability in a competitive market.
Analysing Implication of Organisational Strategic Framework of Hierarchy
Two major challenges faced by Dominos that thoroughly impact on its business performance and customer satisfaction are the inclusion of traditional Maori foods in menu and customer’s irritation for getting spam emails from Dominos.
In New Zealand, customers are receiving spam emails from Dominos, which is affecting the brand image of the organisation. Customers are considering that Domino’s is not a reliable company to trust which can through the impact on the organisational productivity and growth performance. Cowley & Borys (2014) stated that on the other hand, Domino’s does not have included Maori traditional foods in their menu to attract these aboriginals of New Zealand. In Pizza toppings, Domino’s can include fresh mussels with the juice of puha, karaka berries pikopiko and toroi. However, these challenges can limit the growth opportunity of Dominos.
In order to address the identified challenges, Domino’s can use the strategic option of updating the menu by involving Maori traditional toppings. Vitalis & Scott (2015) state that as customers are fed up with spam emails from Domino’s, the management of the concerned organisation can undertake an initiative to monitor the operations in internet marketing process.
In case strategic fit for Dominos, the organisation can use all its allocated resources to implement monitoring and reviewing of the internet marketing technique. Kelsey (2015) said that in this strategic option the resources will be used overcome the organisational challenge and ultimately contributes to organisational growth. The strategic option of updating the menu, Dominos can replace certain menu for incorporating the Maori traditional pizza. This strategic option contributes in organisations trade-off where one resource is replaced with other for attaining potential growth.
The major recommendations for addressing the identified issues can be the inclusion of Maori traditional vegetable toppings on the pizza. Tench Sun & Jones (2014) mentioned that this will attract the other aboriginals present in New Zealand. This will work as the corporate responsibility of Dominos. On the other hand, it can recruit skilled supervisor who will monitor the Domino’s social media activities and internet market activities.
In order to implement the provided recommendations, at first issues have to be identified and then employees will be recruited for supervising internet market activities and another one to update menu (Cobb & Smith, 2015). The rest of the employee’s get training for preparing the updated menu. In this way, the recommendations can be implemented.
The performance measurement of this implementation strategy is that the senior manager of the concerned department will undertake a weekly review of these strategic options to understand its success and impact in business performance. Thompson et al. (2014), asserted that moreover, undertaking six sigma procedures for monitoring and evaluation would prove to be an upper hand for the food firm.
The environment management determines organisational process environmental protection programs, which is a comprehensive, planned, systematic, and documented process. Cooper, Boston & Bright (2013) mentioned that the political factors in environmental management in New Zealand, which need to be attained by Dominos, are Green IT packaging system. Tench Sun & Jones (2014) mentioned that this system can be aligned with the CSR strategy of the eco-friendly and biodegradable Packaging system of Dominos. The practical factor environmental management are CFC measures in carbon emission have to be regulated by Dominos. The ideological factor is that the governmental policies of New Zealand regarding environment will be involved fairly in the business operation of Dominos (Pang et al. 2014).
Using Analytical Tool of External Macro Environment Shows the Impact of these Factors on Business Operations
The five important business practices that Domino’s incorporate are cash management, developing organisational structure, marketing, production and customer engagement.
Figure 4: Five major practices of business
(Source: Dey & Cheffi, 2013, p.705)
Domino’s includes cash-management business practice in allocating financial resources in business operation. Pang et al. (2014) stated that it maintains a corporate hierarchical structure to deliver a formal ambience in the organisation. Domino’s makes business practices of marketing as well as production to ensure profitability. The final business practice that Domino’s is involved in customer engagement with determines customer preference and ultimately concentrates on business productivity.
As Dominos involves in business practice of promotion, marketing and customer engagement it can utilise these practices for corporate social responsibility and environmental sustainability strategy. Tench Sun & Jones (2014) mentioned that Domino’s can develop eco-friendly and biodegradable packaging. The concerned organisation can use social media and other internet sources for promoting their CSR strategy, which will engage a large number of customers. The customers will be able to know about the sustainability program done by Dominos, which enhance its corporate image (Cooper, Boston & Bright, 2013). Thus, Dominos, by designing this CSR and environmental sustainability strategy can improve its business performance and market growth.
Figure 5: ISO Standard
(Source: Tench, Sun & Jones, 2014, p.9)
In order to communicate with corporate social responsibility commitment of the organisation, Domino’s can incorporate ISO 14000 Series standard (Thompson et al. 2014). According to this standard, the business firm needs to minimise that production operation, which affect the environment negatively. Tench, Sun & Jones (2014) mentioned that the environmental law and regulations have to be complying with business operation. Finally, the environment management process has to be improved continuously according to ISO standard. Domino’s can implement its business CSR strategy and acquire desired objectives by complying with regulations of these ISO 14000 Series standard.
Conclusion
In this assignment, Domino’s business environment has evaluated by assessing both internal and external environment. The functional objectives and nature of its business have discussed. The scope of Domino’s ensures that it has extended opportunity to engulf international market with major profitability. Customers are receiving fake emails Dominos that can be addressed by recruiting a supervisor who will observe internet marketing activities. Finally, Domino’s can incorporate ISO 1400 Series standard while implementing CSR strategy of eco-friendly and biodegradable packaging.
References
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