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Year 11 Business Studies Ella Thornton A
Year 11 Business Studies Ella Thornton A
Year 11 Business Studies Ella Thornton A
Mr Sassine
Week 9 of Term 1
Table of Contents:
1.0 Executive Summary: 2
6.0 Conclusion 10
References: 11
The following business report has been written to assess the progress of Domino’s Pizza Incorporated and
its Australian division, Domino’s Pizza Enterprises Limited. The purpose of this report is to recommend a
strategy for Domino’s to undertake to develop a sustainable competitive advantage. This sustainable
competitive advantage will serve to increase customer convenience, cause a growth in sales and maintain
the company’s substantial market share.
The report begins by summarising the history of Domino’s, outlining their key developments. It recounts
Domino’s founding, by the Monaghan brothers in the early 1960’s, and provides a brief timeline since
their establishment. Specific areas of growth, such as the company’s international expansion and
franchises, are discussed. The report also highlights some of Domino’s central innovations; which have
been crucial elements of the company’s exponential growth.
The next section in this report goes on to identify that Domino’s is currently in the post-maturity phase of
the business life cycle. This is justified through the analysis of Domino’s decline, renewal and current
post-renewal steady state. In 2008 and 2009, Domino’s revenue dropped suddenly as the result of
customer dissatisfaction with the poor quality of the product. The implementation of new management,
however, resulted in Domino’s turnaround in 2012. They are currently in the steady-state phase, with
relatively consistent earnings over the last two years. Moreover, Domino’s experience, time since
establishment, number of stores and brand awareness are all indicators of them being in the post-maturity
stage.
Section three of the report (4.0) goes on to identify the influence of Technology on the development of
Domino’s. This section explains how Domino’s has aligned their products and operations with the new
digital age. As technological developments have become available, Domino’s has restructured their
procedures to increase efficiency and customer convenience.
The fourth and final section suggests that Domino’s Pizza Enterprises Ltd should implement drive thru’s
in their larger stores. This will further increase Domino’s customer base and in turn result in a growth in
sales. Other franchised businesses, for example Boost Juice, have identified the demand for convenience
food and it recommended as Domino’s next step. As the leading pizza chain in Australia, they already
have loyal customers and existing strategies for growth; the way to further increase sales is through the
implementation of a drive thru. Domino’s has already begun research into decreasing the time it takes to
create a pizza from scratch, and their results support the viability of Domino’s drive thru stores. This
initiative is difficult to replicate by Domino’s major competitors and requires advanced technology to be
achievable; something Domino’s has already begun trialing and investing into.
2.32 Franchises
In 1967, Domino’s Pizza opened its first franchise location, and within a 10 year period the business had
expanded to 200 stores. Domino’s predominantly operates through master franchise agreements. The
largest master franchisee is Domino’s Pizza Enterprises Ltd, which owns franchising rights across
Australia, New Zealand, France, Belgium, The Netherlands and Japan. Domino’s Pizza Enterprises Ltd is
regarded as the Australian division of Domino’s Pizza and was publicly listed in 2005. It currently has
more than 2000 stores and owns the right to own, manage and franchise branches of the Domino’s chain
within the aforementioned countries (Domino’s Pizza Enterprises Ltd, 2015b).
2.33 Innovations
Domino’s is largely renowned for their innovative processes and technologically based operations.
Delivery services were always a key part of their business model, however the addition of the ‘Pizza
Tracker’ service in 2015 was hugely successful (Domino’s Pizza Enterprises, 2015c). Their ‘30 minutes
from ordering or free’ policy also had significant contributions to their rapid growth, however this
initiative was discontinued in 1993, as Domino’s became involved in a lot of legal problems that were
closely involved with the policy (David Mikkelson, 2014).
3.0 The Business Life Cycle:
Graph 1:
Graph 2:
1. Emoji Ordering: Allows customers to order their pizza by tweeting a pizza icon.
2. Amazon Echo application: Enables users to order their pizza through voice command.
3. No-Click Ordering: Consumers pre save info and preferred orders, so that food can be summoned
simply by opening the app. 10 seconds after opening the app the order has been placed.
The latest breakthrough for Domino’s however, comes in the form of DRU (Domino’s Robotic Unit).
DRU is the world’s first autonomous delivery vehicle, with no technology similar in the field of
commercial delivery. The robotic unit has an inbuilt navigation system and is able to sense any obstacles
in its path (Domino’s Pizza Enterprises Ltd, 2016). Though it has not been actively tested yet, it has been
said to be in service on Australian streets in 2018 (Angus Whitley, 2016). This machine is a significant
breakthrough for Domino’s and the future commercialisation of this technology (Jacinda Tutty, 2016).
Domino’s digital strategies are paying off, with their technological platforms (app and website) receiving
over $2 billion, which doubles their delivery revenue (Mark Wilson, 2016). Domino’s recently announced
that 40 new digital projects will be released in the next financial year (Tracy Stephenson, 2016).
4.3 Recommendation:
Through utilising technology, Domino’s has managed to decrease production time, which creates
opportunities for higher volume of production. In turn, this creates the potential for revenue growth as a
result of the time saved. Through the use of technology there is less scope for human error and greater
opportunity for efficiency, two aspects of business that have a direct impact on revenue and quality.
Domino’s is encouraged to maintain their current approach to technology and continue to develop current
digital projects. For further growth in the field of technology, it is recommended that Domino’s continue
to build and implement the DRU self-driving delivery vehicle. They should also seek to further personal
customisation for the ‘no-click ordering’ initiative, as this will be attractive to customers and maintain a
similar if not greater level of convenience for consumers (Mark Wilson, 2016).
Image 1:
Existing Drive Thru at Domino’s Pizza Outlet
The international company, Boost Juice, recently announced the implementation of drive thru stores.
Their customer base was increasing exponentially, and founder Janine Allis believed that the only step
forward was a drive thru (Jake Rosengarten, 2017). This new initiative highlights that other franchised
businesses have noticed the demand for convenience food, and responded through the form of drive
thru’s. As this is a new development for Boost Juice, there is little evidence to prove its success. This
being said, drive thrus have historically been a successful addition to fast food restaurants, for example
McDonald's.
DPE is encouraged to implement this strategy in their larger stores to further revenue growth. This
strategy is not easy for competitors to replicate and these barriers to entry will solidify the competitive
advantage for Domino’s. Though it is a costly initiative, Domino’s has the financial reserves to introduce
drive thru’s and will be entering a new market of customer convenience which will result in an increase of
sales (Domino’s Pizza Enterprises Ltd, 2016).
6.0 Conclusion
Domino’s already have significant market dominance and online presence and should therefore work to
improve on a combination of established and new initiatives, as stated in 4.3 and 5.3. Online ordering for
Domino’s has already proven to be very successful, specifically in international markets. Their thriving
digital platforms exemplify their definitive advantage over their competitors. Customisation of their
existing technology and development of their DRU machine will further increase sales. As they are
currently in the post-maturity stage, Domino’s will best be able to avoid heading into decline through the
introduction of drive thru stores. By developing and implementing new technological equipment, the
company will have a new platform to build off of over the next few as the demand for convenience food
grows.
References:
- Dominos.com.au. (2017). Domino’s First Quarter Results Top Management Expectations. [online]
Available at: https://www.dominos.com.au/inside-dominos/media/nov-2015-domino-s-first-quarter-
results-top-management-expectations [Accessed 25 Mar. 2017].
- Dominos.com.au. (2017). GPS Driver Tracker Technology Launch - Domino's Pizza. [online] Available
at: https://www.dominos.com.au/inside-dominos/media/may-15-safety-fuels-dominos-gps-driver-tracker-
technology [Accessed 19 Mar. 2017].
- Dominos.com.au. (2017). GPS Driver Tracker Technology Launch - Domino's Pizza. [online] Available
at: https://www.dominos.com.au/inside-dominos/media/may-15-safety-fuels-dominos-gps-driver-tracker-
technology [Accessed 27 Mar. 2017].
- Dominos.com.au. (2017). Inside Domino's - Discover the story behind the brand. [online] Available at:
https://www.dominos.com.au/inside-dominos [Accessed 18 Mar. 2017].
- Higgins, C. (2017). 11 Facts About Domino's Pizza Founder Tom Monaghan (in 30 Minutes or Less).
[online] Mentalfloss.com. Available at: http://mentalfloss.com/article/65604/11-facts-about-dominos-
pizza-founder-tom-monaghan-30-minutes-or-less [Accessed 18 Mar. 2017].
- Jager, C. (2017). Domino's Is Launching A Self-Driving Pizza Delivery Robot. No Really. [online]
Lifehacker.com.au. Available at: https://www.lifehacker.com.au/2016/03/dominos-is-launching-an-
autonomous-pizza-delivery-robot/ [Accessed 25 Mar. 2017].
- Pizza, D. (2017). Domino's® Opens 1,000th Store in India. [online] Prnewswire.com. Available at:
http://www.prnewswire.com/news-releases/dominos-opens-1000th-store-in-india-300216406.html
[Accessed 24 Mar. 2017].
- Rosengarten, J. (2017). Boost Juice announces drive-thru stores so you can satisfy your cravings 24/7 -
Techly. [online] Techly. Available at: https://www.techly.com.au/2017/03/21/boost-juice-drive-thru-
cravings-247/ [Accessed 26 Mar. 2017].
- Snopes.com. (2017). End of Domino's Pizza Delivery Guarantee. [online] Available at:
http://www.snopes.com/business/consumer/dominos.asp [Accessed 19 Mar. 2017].
- Theaustralian.com.au. (2017). Dominos goes after drive-thru giants. [online] Available at:
http://www.theaustralian.com.au/news/latest-news/dominos-goes-after-drive-thru-giants/news-
story/3f505b71fe569036e581a9fb1094e131 [Accessed 25 Mar. 2017].
- Tutty, J. (2017). Pizza robots - sharing a bike path near you. [online] Couriermail.com.au. Available at:
http://www.couriermail.com.au/news/queensland/dominos-pizza-has-launched-worldfirst-technology-to-
shake-up-the-delivery-game/news-story/328564ab45975a11f8ccc2c89f2f5701 [Accessed 25 Mar. 2017].
- Whitley, A. (2017). Domino's Pizza Enterprises is set on a 3-minute pizza and 2000 new stores. [online]
The Sydney Morning Herald. Available at: http://www.smh.com.au/business/retail/dominos-pizza-
enterprise-is-set-on-a-3minute-pizza-and-2000-new-stores-20160404-gnye7k.html [Accessed 24 Mar.
2017].