It is important to note that Domino’s Pizza is a strong multinational company with a large customer base comprised of many demographics, accessed through its vast network of franchises. The current competitive advantage is the result of the efficiency of production and distribution networks, brand loyalty, network effect, and economies of scale. An in-depth analysis of Domino’s Pizza revealed that the company could utilize its internal strengths to tap into the shifting health preferences of the public, accompanied by the willingness to pay premium prices. The company can develop its market by providing investors with a lower royalty percentage of 3.5%, which means there will be an incentive. Such an approach enables a widespread opening of stores on an international scale in the following years. Backward integration can also become a critical strategic element of the company, where expensive pieces of equipment are purchased to improve revenue and profitability in the long term.
Moreover, Domino’s Pizza has the internal capabilities to properly respond to an increasingly health-conscious consumer base, which is a threat under the current conditions. The company should boost its product development to provide a diversified selection to its customers with trendy and healthy options included. It should also conduct a horizontal integration with other competitive and promising chains because it is a plausible way to boost its market share revenues and further capitalize on its economies of scale. Since Domino’s Pizza’s current weakness is its image as an unhealthy food provider, it needs to change the public perception by ensuring that some of its products contain healthy options. In addition, the company should improve its business analytics methods to properly allocate its massive resources among regions, which is hindered by its weak database system. In order to minimize the effects of Domino’s Pizza’s external threats and internal weaknesses, the company should improve its cleanliness training among its staff and not be scrutinized by the media and public. Due to its large size and limited responsiveness, the company should always be aware of expected and current consumer preferences to avoid responding too late.
Therefore, the incorporation of the identified strategies will require leadership skills and styles which need to promote innovation. A study suggests that “numerous ‘positive’ leader approaches correlated positively and ‘negative’ leader approaches correlated negatively with creativity and innovation” (Hughes et al., 2018, p. 565). Another source also states that “in order to actively develop the exploratory and transformational learning processes, firms need to foster the presence of transformational leaders and leadership styles” (Darwish et al., 2018, p. 96). Therefore, transformational leadership skills and styles can be of paramount relevance in order to promote creativity and innovativeness, which are necessary to implement the proposed changes.
In the case of specific decisions company leadership can make in order to capitalize on untapped business opportunities, two key recommendations emerge. Firstly, Domino’s Pizza should open 1000 more international stores in both European and Latin markets within the following three years with an allocation of $20 million for each period. Secondly, the company should raise an additional $50 million to facilitate and invest in novel forms of advertising, research, and development. Alsea, a company operating restaurants of Domino’s Pizza in Latin and European regions, received a B1 rating (Moody’s, 2021). It means that the recommendations are even more plausible due to the higher likelihood of refinancing existing debts. The sources used are listed on the reference page.
References
Darwish, T. K., Zeng, J., Rezaei Zadeh, M., & Haak-Saheem, W. (2018). Organizational learning of absorptive capacity and innovation: Does leadership matter? European Management Review, 17(1), 83-100.
Hughes, D. J., Lee, A., Tian, A. W., Newman, A., & Legood, A. (2018). Leadership, creativity, and innovation: A critical review and practical recommendations. The Leadership Quarterly, 29(5), 549-569.
Moody’s. (2021). Rating action: Moody’s assigns B1 ratings to Alsea and its proposed notes; stable outlook [PDF document]. Web.