Importance of Business Models in Modern Business Scenario

Discuss about the Business Model of Domino’s Pizza.

The essay helps in analysing the literature that exists in identifying relevant business model and disruption used for modern business. The essay helps in identifying the importance of business model in the modern business scenario. The essay focuses on Domino’s Pizza and describes the influence of smart connected products with that of the business models. It analyses the business model framework and focuses on illustrating the findings of the study. The opportunities and threats received by Domino’s over the implementation of the business model. The future of Domino’s Pizza in Australia is highlighted with the help of the business model. Domino’s is the largest pizza chain in Australia in terms of a franchise, stock number and network sales. It has over 1900 stores and in May 2005, it became the first publicly listed pizza company in Australia (Dominos.com.au, 2018).

The business model is considered as a tool by which operations in business can be recognised along with the key internal and external capabilities. The resources that exist in a company are judged with the help of the business model. According to Dudin et al. (2015), the business model can help in analysing the revenue as well as the profit an organisation can earn. The business model helps in depicting the competitive positioning of an organisation and provides an assessment of the value of logistics. In the case of Domino’s, due to the impact of modern business requirements, the application of the business model has changed considerably. The company does not have any fixed business model and therefore it finds it difficult to operate in the competing market of Australia in a proper manner.

Hence, as stated by Hong and Fauvel (2013) the need for a disruptive business model is required to combat the high involvement of technology in the modern business world. Hence, to gain high revenue, Domino’s have changed their business model and have started to focus more on the needs of the customers. de Jong and van Dijk (2015) is of the opinion that disruption can be considered as a total displacement and destruction of a particular business or product. Thus, in the modern day, with the advancement of technology, companies face a high chance of adopting the disruptive strategy.

In the modern day, the stability of the business model is in doubt particularly after comparing it with the past. The internal and external environment in the business market needs to be considered as it has a great influence on the implementing changes in organisations. According to Johnson, Christensen and Kagermann (2008), different organisations have an influence on the changes of the existing business model. Similarly, the changes in Domino’s can also be influenced by the help of proper analysis. With the rapid development of technology, Domino’s have seen staggering effects in its business model. The connected products are considered as the physical devices that are interfaced with the software technologies.

With the help of the smart connected products, Domino’s can have a significant opportunity to ensure that the business model remains flexible and stable. This can help in maintaining the sustainability of the business. Domino’s can become streamlined and easily recognisable in the business industry so that it becomes more competing in the business market. Domino’s can also make the business model more advanced and innovative. Porter and Heppelmann (2015) are of the opinion that the application of the smart connected products in the existing business of Domino’s can help the company become more flexible and ensure that the external operations of the company are well maintained.

Impact of Smart Connected Products on Business Models

However, some threats may be seen due to the application of the model. Porter and Heppelmann (2014) were of the opinion that investment in maintaining the security of a company can be considered as a huge threat while applying this particular model. In the case of Domino’s the application understanding the operations of the employees can be a threat. The level of security that the company has can be compromised with the application of the business model process. At the same time, taking in resources for the development of the company can also be a threat to Domino’s as maintaining the resources require proper management of inventories.

Hence, the managers of the company need to be aware of the fact that if the application fails, then total disruption may be required for Domino’s. Hence, it can be said that the business model canvas developed by Osterwalder and Pigneur (2010) can be used to identify the effectiveness of the business models and its elements. Different strategies and operations are laid in a manner that helps in making proper decision to analyse the elements of business in a proper manner. Thus, Domino’s can illustrate the findings of the ideas presented with the help of the business canvas and try to develop a business model that can help in addressing the potential challenges it may face.

It has been seen that the existing business model of Domino’s in Australia creates a value proposition that can assist in the growth of the company and the satisfaction of the customers. Veit et al. (2014) stated that with the help of the business model, Domino’s have managed to generate high revenue by streamlining of operations and gain proper stability in its financial matters. The profitability of the company can be determined by the application of the business model. Thus, Domino’s can operate easily in the fast food industry of Australia. Hence, it can be said that the role of the customers in the business model is of vital importance.

The customers add value to the product and service by providing feedback about it whether it is old or new. Dominos’ have seen a massive improvement in the application of the smart connected products. The introduction of new products, innovative recipes and various other products has had a massive impact on the minds of the customers. The application of technology has also provided great value to the company. Domino’s in Australia are involved in the CSR activities by providing charitable services as well as free education to the students. The introduction of GPS tracker and pizza delivery within 30 minutes has benefited the company.

According to Zott, Amit and Massa (2011), Domino’s have talented and trained employees that can provide high-quality services to the customers. The stores of Domino’s are mainly located in the central regions that can help in the timely delivery of the products. This provides an opportunity to interact more with the customers and earn their trust and loyalty. Another important advantage of the company is that it has fewer inventories that help in reducing the overall cost of the company. Thus, Domino’s can extend its operations in the global context. The fact that the company can provide online services and home delivery makes it one of the biggest companies to order food from in the modern world. It also maintains selling of the products via the assembly line. Domino’s possess the capability of locating the customers easily with the help of GPS tracking device.

Need for Disruptive Business Models in Modern Business World

Chesbrough (2010) observed that the business model implemented in Domino’s is dedicated to achieving the goals and objectives of the company. Alignment of the process and activities must be done in a manner so that it can help in maintaining a proper system in the company. Hence, Domino’s need to maintain an existing business process framework, that can help to identify the systems so that it can improve in its overall goals. It needs to ensure that Domino’s have a more stable approach to the betterment of the company. Therefore, the development of a system process can help in identifying the business operation of the company in a proper manner.

At the same time, gaining profit is considered as another important factor for the company. The profit helps in identifying the usefulness of the stakeholders towards offering values to the customers. Joyce and Paquin (2016) opined that the application of the revenue model canvas could help in determining the ways to improve profitability. The importance of the application of this particular model consists of understanding the strategies adopted by the competitors. Domino’s can formulate the revenue model that defines the prices required for selling the products to the customers. This involves identifying the target market and identifying opportunities for a convenient pizza delivery route and time.

Conclusion

Hence, it can be said that business model plays an important role in influencing the operations and system processes of an organisation. The usefulness of the business model is that it can help a company, such as Domino’s to analyse the revenue it consists and the usefulness of the structure. It can be concluded that innovation in the business model can help Domino’s to maintain the loyalty of the customers. Therefore, the business model utilised by Domino’s provides stability and an innovative method to improve its profitability in the business. This can provide the company to remain as the leading pizza-serving restaurant in Australia.

References

Chesbrough, H. (2010). Business Model Innovation: Opportunities and Barriers. Long Range Planning, 43(2–3), 354-363.

de Jong, M., & van Dijk, M. (2015). Disrupting beliefs: A new approach to business-model innovation. McKinsey Quarterly.

Dominos.com.au (2018). Dominos.com.au. Retrieved 21 April 2018, from https://www.dominos.com.au/

Dudin, M., Kucuri, G., Fedorova, I., Dzusova, S., & Namitulina, A. (2015). The innovative business model canvas in the system of effective budgeting.

Hong, Y. C., & Fauvel, C. (2013). Criticisms, variations and experiences with business model canvas.

Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing your business model. Harvard Business Review, 86(12), 50. Scroll down to find the article.

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.

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

Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, 92(11), 64-88.

Porter, M. E., & Heppelmann, J. E. (2015). How smart, connected products are transforming companies. Harvard Business Review, 93(10), 96-16.

Veit, D., Clemons, E., Benlian, A., Buxmann, P., Hess, T., Kundisch, D., … & Spann, M. (2014). Business models. Business & Information Systems Engineering, 6(1), 45-53.

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