{"id":5191,"date":"2015-12-09T17:40:01","date_gmt":"2015-12-09T22:40:01","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/dominos-pizza-bites-through-bytes\/"},"modified":"2015-12-09T21:06:06","modified_gmt":"2015-12-10T02:06:06","slug":"dominos-pizza-bites-through-bytes","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/dominos-pizza-bites-through-bytes\/","title":{"rendered":"Domino\u2019s Pizza: Bites through Bytes"},"content":{"rendered":"<p><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Dominos-HQ1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-5075\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Dominos-HQ1-300x300.png\" alt=\"Dominos HQ\" width=\"300\" height=\"300\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Dominos-HQ1-300x300.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Dominos-HQ1-150x150.png 150w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Dominos-HQ1.png 429w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<blockquote>\n<p style=\"text-align: center\"><em>Peering out of the window of his uber at 1:30 AM EST, he pondered what his next move would be. The thought of pizza suddenly rushed into his mind causing him to grab for his phone. Approximately 90 seconds later, his order was\u00a0placed: two golden medium pies of pizza and a side of stuffed cheesy bread. Suddenly, he found himself in an unexpected race against time: the Domino\u2019s Tracker<sup>\u00ae <\/sup>tool estimated exactly where along the production process his order stood. Everything seemed so transparent and the order was being processed lighting\u00a0fast. Mr. Randomcaseprotagonist found himself pondering, \u201cWill I get home in time to enjoy my pizza \u2013 pizza that was cooked by Ecem, my favorite Domino&#8217;s pizza chef?\u201d<\/em><\/p>\n<\/blockquote>\n<p style=\"text-align: left\"><span style=\"text-decoration: underline\"><strong>Business Model<\/strong><\/span><\/p>\n<p style=\"text-align: left\">Domino\u2019s ability to create value for its customers, capture value for its shareholders, and share value with its ecosystem centers around its ability to deliver customers delicious pizza in a convenient and consistent way. Since its founding in 1960, Domino\u2019s has maintained pizza delivery as core to executing against this business model and has maintained its leadership position in the space by continuously investing in, adapting, and improving it\u2019s operating model. [1]<\/p>\n<p>However, in the &#8220;pizza&#8221;\u00a0business, there are limitations to the operational levers that can be pulled in order to maintain a competitive edge. For example, the\u00a0traditional benefit of sourcing leverage that operational scale provides has a limited benefit for Domino&#8217;s in that a 20% saving in raw material purchase price only reduces the price of pizza by ~$1-$2\/pie, which is\u00a0not nearly enough to attract\/retain\u00a0most customers. In a higher price per purchase industry such as automobiles, however,\u00a0a 20% difference in the price dramatically alter the purchasing decision process.<\/p>\n<p>Recognizing this, Domino\u2019s has invested significant time, effort, and capital towards continously improving its operating\u00a0model to build a differentiated customer experience that serves as a\u00a0\u201cmoat\u201d against competition.<\/p>\n<figure id=\"attachment_5050\" aria-describedby=\"caption-attachment-5050\" style=\"width: 300px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosOld.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-5050\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosOld-300x209.png\" alt=\"Early Domino's advertisement highlights fast free delivery\" width=\"300\" height=\"209\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosOld-300x209.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosOld-600x418.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosOld.png 625w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-5050\" class=\"wp-caption-text\"><em>Early Domino&#8217;s advertisement highlighting fast free delivery<\/em><\/figcaption><\/figure>\n<p><strong><u>Operating Model<\/u><\/strong><\/p>\n<p>Domino\u2019s is the leading pizza delivery company in the world, operating approximately 12,000 stores in 80 countries around the world, delivering more than 1,000,000 pizzas a day. [1] One would not think of Domino\u2019s as a \u201ctech\u201d company, but it actually invests more in its\u00a0Information Technology department than any other department in the company. This is because Domino\u2019s operating model heavily relies on the\u00a0use of digital technology to maintain its\u00a0edge in pizza delivery. In fact, today, Domino\u2019s is consistently one of the top five companies in terms of online transactions (behind\u00a0the likes of Amazon and Apple), about 50% of Domino&#8217;s sales in the U.S. comes through its\u00a0digital ordering channels, and 95% are done through their apps. [2]<\/p>\n<p><strong>Technological Innovations in Delivery:<\/strong>\u00a0In recent years, Domino\u2019s has made major advancements in online and mobile pizza ordering, allowing it to competitively differentiate itself from traditional pizza rivals such as Papa John\u2019s and Pizza hut as well as smaller mom and pop shops. One of the most visible consumer facing innovations is the Domino\u2019s Tracker<sup>\u00ae\u00a0<\/sup>(referenced above), which is a visual progress bar that provides customers\u00a0with real-time updates on their delivery as it makes its way through Domino\u2019s supply chain.<\/p>\n<figure id=\"attachment_5049\" aria-describedby=\"caption-attachment-5049\" style=\"width: 169px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosApp.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-5049\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosApp-169x300.png\" alt=\"Domino's Tracker via iOS\" width=\"169\" height=\"300\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosApp-169x300.png 169w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosApp.png 295w\" sizes=\"auto, (max-width: 169px) 100vw, 169px\" \/><\/a><figcaption id=\"caption-attachment-5049\" class=\"wp-caption-text\"><em>Domino&#8217;s Tracker via iOS<\/em><\/figcaption><\/figure>\n<figure id=\"attachment_5048\" aria-describedby=\"caption-attachment-5048\" style=\"width: 447px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosDone.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5048\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosDone-300x90.png\" alt=\"Domino's Tracker via web browser\" width=\"447\" height=\"134\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosDone-300x90.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosDone-600x180.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosDone.png 702w\" sizes=\"auto, (max-width: 447px) 100vw, 447px\" \/><\/a><figcaption id=\"caption-attachment-5048\" class=\"wp-caption-text\"><em>Domino&#8217;s Tracker via web browser<\/em><\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>While not particularly complex on the surface, this innovation was tremendously expensive and complex for Domino\u2019s to implement because it required the company to digitally link each step of their production and delivery process in a way that it could be visually\u00a0displayed to customers on a real-time basis. However, the value this technological capability provides Domino\u2019s and its customers is equally significant. From the customer\u2019s perspective, the transparency this tracker created eliminated many of the \u201cunknowns\u201d as it relates to pizza delivery (no more guessing and\/or calling the store multiple times to ask where the pizza is!), and as a result, \u00a0significantly improved levels of customer satisfaction. For Domino\u2019s, tremendous value has been created because the improved customer satisfaction leads to a higher likelihood of a repeat and\/or word of mouth purchase.<\/p>\n<p><strong>Intentional Innovation Process: <\/strong>This is just\u00a0one example of an innovation Domino\u2019s has implemented in it\u2019s operating model to maintain its edge in executing its business model. In order to generate such innovations, Domino\u2019s utilizes the \u201cfast-fail\u201d managerial approach that is most famously applied in Silicon Valley firms (such as Facebook) to ensure they are providing innovative products for ever changing consumer demands. This approach\/mantra is an organizational ethos that stems from a debacle\/recovery it experienced when it publicly acknowledged\u00a0in the late 2000&#8217;s\u00a0that its pizza tasted terribly and that it was doing everything it could to listen to customers and\u00a0fix\u00a0its pizza. The organizational learning from this experience was that failing often leads to product\/process improvements (see results below) and, therefore, that risks should be embraced. [3]<\/p>\n<p>This approach\u00a0led the company to embrace innovations such as the Domino\u2019s Tracker, investments in iOS and Android Apps, partnerships with Ford (to order pizza directly from the in-car control panel), and Siri\/voice based ordering. By continuously investing in operating model innovations, Domino\u2019s is doing its best to ensure that they maintain a leadership position in delivering customers superior total value which will result in continued shareholder value creation.<\/p>\n<figure id=\"attachment_5047\" aria-describedby=\"caption-attachment-5047\" style=\"width: 300px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosImprovement.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-5047\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosImprovement-300x200.png\" alt=\"From worst-in-class to best-in-class\" width=\"300\" height=\"200\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosImprovement-300x200.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosImprovement.png 539w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-5047\" class=\"wp-caption-text\">From worst-in-class to best-in-class<\/figcaption><\/figure>\n<p><strong>Risks: <\/strong>By leveraging technology and data, Domino\u2019s is able to remove much of the friction that previously existed in the pizza delivery process. However, as they continue to push further into the digital technology\/connectivity, Domino&#8217;s management team\u00a0remains conscious of cyber security risks\u00a0and how sensitive their\u00a0good\/service (highly discretionary) is\u00a0to a change in perception about personal information security. [4]<\/p>\n<figure id=\"attachment_5046\" aria-describedby=\"caption-attachment-5046\" style=\"width: 300px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosEthos.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-5046\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosEthos-300x116.png\" alt=\"Clear company values\" width=\"300\" height=\"116\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosEthos-300x116.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosEthos-600x232.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/DominosEthos.png 946w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-5046\" class=\"wp-caption-text\"><em>Clear company values<\/em><\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<p>[1]\u00a0https:\/\/biz.dominos.com\/web\/about-dominos-pizza\/<\/p>\n<p>[2]\u00a0http:\/\/www.npr.org\/sections\/alltechconsidered\/2014\/11\/04\/359829824\/dominos-becomes-a-tech-company-that-happens-to-make-pizza<\/p>\n<p>[3]\u00a0<a href=\"http:\/\/pizzaturnaround.com\/\">http:\/\/pizzaturnaround.com\/<\/a><\/p>\n<p>[4]\u00a0<a href=\"http:\/\/www.pwc.com\/us\/en\/ceo-survey\/ceo-interviews\/patrick-doyle-dominos-pizza.html\">http:\/\/www.pwc.com\/us\/en\/ceo-survey\/ceo-interviews\/patrick-doyle-dominos-pizza.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Domino&#039;s delivers millions of pizza bites each day by relying heavily on millions of terabytes of data.<\/p>\n","protected":false},"author":1193,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[852,194,818,55],"class_list":["post-5191","hck-submission","type-hck-submission","status-publish","hentry","category-dominos","category-operational-innovation","category-pizza","category-technology"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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