Creating Value for the Customers: Domino’s Business Model and Competitive Differentiation
Domino’s Pizza was founded in 1960 and is a pioneer in the pizza delivery business.  As one of the most widely recognized consumer brands in the world, Domino’s competes in the large and highly fragmented global quick service restaurants (QSR) category. In the last two decades, internet technology and the growth of mobile usage have disrupted the company’s traditional pizza delivery business model by enabling digital ordering.  These technological changes have pushed the company to compete in new ways.  As the market leader in online delivery, Domino’s now competes with both local and large global QSR companies, such as Pizza Hut, primarily based on product, service speed and quality, technology, and price.  To stay competitive, Domino’s has invested in building digital capabilities, mobile technologies, and data analytics platforms to differentiate itself from competitors and to meet the evolving expectations of customers. 
Domino’s Operating Model: How does Domino’s deliver on its customer promise?
Domino’s technology choices have enhanced the value that customers derive from the company’s service offering.  There are several key operating model choices that have enabled Domino’s to deliver its customer promise of convenience, timely delivery, transparency and price. 
In-House Digital Ordering Platform
Convenience of the digital ordering process is critical to Domino’s customers and is essential for the long-term success of the company. In 2015, approximately 50% of Domino’s U.S. sales came from digital orders, with that number being higher in some international markets.  To ensure the sustainability and continued growth of digital orders, Domino’s made the strategic decision to invest in an in-house e-commerce ordering platform. The innovative platform enables customers with an online profile to re-order their favorite meals within 30 seconds, significantly improving order time and overall delivery time. The platform also enables order ETA tracking and delivery updates, which provides greater transparency.
Domino’s launched mobile applications for smartphones and tablets to capture the growing number of mobile users placing delivery orders on their smartphones.  In 2014, the company launched Dom, a voice ordering application, and in 2015 it launched text messaging and Twitter ordering platforms using emoji, which were a hit among millennials. These new platforms enabled Domino’s to capitalize on the growing personalization of services (“The Internet of Me”), which places users at the center of every digital experience.  By incorporating personalization and by making pizza ordering a social experience, Domino’s has been very successful in capturing a younger audience and making its product stickier by creating a network effect. 
Integrated Point-of-Sale Technology System and Vertically Integrated Supply Chain
Finally, Domino’s has invested significantly in optimizing operational efficiencies to reduce costs and to be able to offer an affordable product to its end customers. The company rolled out PULSE, an integrated POS system, to improve coordination between its franchisees and the corporate office and to reduce the number of order mistakes and improve training hours. Additionally, Domino’s has a vertically integrated dough manufacturing and supply chain systems, which enhances the quality and consistency of products, allows Domino’s to leverage economies of scale and enables store managers to better focus on store operations and customer service. 
The Future of Digital Pizza Delivery for Domino’s
The food industry has attracted a lot of venture capital investments in the last decade and thus Domino’s now faces increased competition not only from other QSRs but also from food delivery start-ups such as UberEATS. To maintain its competitive advantage, Domino’s needs to ensure that it has the right talent in place to drive continued innovation. Training and employee development will be key for Domino’s, especially with regards to international expansion.
Additionally, to continue to deliver on its customer promise, Domino’s should explore alternative delivery methods to reduce costs, such as autonomous delivery vehicles.  Partnerships with other delivery service providers may also provide opportunities for cost cutting, which will be very important for maintaining profitability, given the company’s lower margin.
Finally, growing Domino’s customer base will be key in the future, especially as millennials comprise a significant portion of consumers. Domino’s has a robust online platform that enables the company to collect data on consumer preferences and the company should use this data to stay ahead of trends in consumer preferences and to innovate its menu offering.
Continued technological innovation has transformed Domino’s from a traditional fast food restaurant chain to a fast-growing technology-enabled delivery services company. However, as the company continues to face more competitive pressures in the future, will Domino’s be able to continue to innovate and launch autonomous drone delivery and artificial intelligence ordering platforms  or is it doomed to go on a steady path of decline as millennials continue to become more and more health conscious?
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