Domino’s Pizza Inc. is one of the giants in the pizza chains sector. This industry has witnessed significant incorporation of technology to foster the realization of substantial market share. In this view, Domino’s expansion strategy has forced it to consider various aspects of the environment in which it operates. Effective strategic management requires organizations to deploy tools such as PESTEL and Porter’s Five Forces to analyze their business settings. In this respect, this paper identifies business environment aspects that stand out for the case of Dominoes.
One Segment of Domino’s General Environment
Political, economic, socio-cultural, technological, environmental, demographic, and legal aspects characterize the general business environment in which an organization operates (Grant, 2015). The technological segment stands out for the case of Domino’s broad business setting. This organization continually seeks to improve its competitiveness in the pizza industry by integrating automated methods into its operations. According to Aley (2017), the notable digital ordering avenues employed by Domino’s include the use of social media platforms such as Twitter, Facebook, and the zero-click app. This strategy aims at minimizing human contact in the ordering process to facilitate the realization of greater efficiency and, consequently, business profitability.
Porter’s Five Forces: Competition
According to Grant (2015), Porter’s Five-Force model of analysis facilitates the assessment of factors that account for the ability of industrial players to sustain different profitability levels. In Domino’s case, the level of competition in the industry stands out as one of the elements of Porter’s Five-Force framework. Patrick Doyle who manages Domino’s American-based businesses asserts, “We had somehow created a situation where people liked our pizza less if they knew it was from us…So yeah, that was a problem” (Aley, 2017, para. 1).
The perception created by customers implies that rivals, including Pizza Hut, had a better competitive edge compared to Domino’s. However, Aley (2017) reveals that the enhancement of Domino’s competitiveness through product development and the integration of technology to foster the ordering aspect have made Domino’s realize a remarkable 15% share of the pizza restaurant market in 2016 compared to the 9% allocation held in 2009. Therefore, market competitiveness influences Domino’s strategic approaches.
Innovation Enactment
The integration of the zero-click app is one of the ways that demonstrate the enactment of innovation at Dominoes. This technology fosters efficiency in the ordering process by allowing customers to use their phones to place an “Easy Order”. The automatic ordering feature of the application makes this app better because it helps to place orders on behalf of consumers after 10 seconds elapse (Aley, 2017). As such, this invention demonstrates the extent to which Domino’s deploys technology in its strategic business approaches.
Technology as Domino’s Cornerstone
The application of technology at Domino’s improved the quality of service delivery and, consequently, the size of this company’s client base. Hence, it has become the cornerstone of Domino’s strategy. As Aley (2017) indicates, the voice-activated tool and the zero-click app have streamlined the digital interaction of customers with Domino’s when placing orders. Consequently, the improved quality of service has attracted more customers for Dominoes to the extent of informing its decision to expand the number of pizza restaurants.
Conclusion
Domino’s is now one of the leading competitors in the pizza industry, thanks to the integration of technology into its strategic approaches. As such, Domino’s took account of the technological segment of the general business environment to ensure that it expands its market share. The most notable way in which the company enacted innovation is through the development of the zero-click application that enhances the convenience of placing orders. Domino’s ability to effectively analyze its operations environment has made it realize desirable profits.
References
Aley, J. (2017). Domino’s atoned for its crimes against pizza and built a $9 billion empire. Bloomberg. Web.
Grant, R. M. (2015). Contemporary strategy analysis: Text and cases edition (9th ed.). Hoboken, NJ: John Wiley & Sons.