POSTGRADUATE DIPLOMA IN BUSINESS

APMG 8119: DIGITAL ENTERPRISE

2014

Group: ISOTruong Dinh Thanh ThuValaphone SisouvongKounjairhtong Insiri

>>APMG 8119: DIGITAL ENTERPRISE

Business Model Analysis

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Presentation outline

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1. Business background

2. Revenue analysis

3. Cost analysis

4. Value creation

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Domino’s Pizza Business Model

1. Business Background

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• Was owned by Domino’s Pizza Enterprises Ltd in 1960 with the purpose is “Fast free delivery”

• In 2003, open more stores in New Zealand.• Becomes the second largest pizza chain in

New Zealand in both network stores number and network sale

• In 1996, Domino Pizza was launched the Domino website: http://www.dominos.com/ which allows customers to book product online.

Partnership

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• Domino Pizza has created good relationship with their suppliers which will

- provide high quality ingredients: optimization motivation- Lower price: economic motivationÞ Reduce risk for product quality and price fluctuation• Domino Pizza use eco-efficient package and paper which are

friendly with environment => achieves acquisition of particular resources and activity

Customer Targeting

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• Pizza can be consumed by many people from different ages, genders, incomes and generations.

ÞDomino Pizza aims to serve for the whole market. • Domino Pizza continues to improve their menus

which are suitable for people from different religions => Domino can be easy to attract and serve different type of customers.

Online Retail Activities

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Offered both online booking through Domino’s website and Mobile Apps: HTML5 ordering system, iPhone App, Android App, iPad App, Desktop Ordering Site and Facebook Ordering with clear interfaces which make it easier for customers to order anytime in anywhere

Online Retail Activities

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• Domino Pizza entered into social network such as Facebook, YouTube and reached over one million fans on Facebook

• With the Facebook App, customers can rate their feedback => understand customer’s need to give better service

2. Revenues analysis: Products selling

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- •Price sensitivity•rivals•quality•services

+ •strong value-supply chain•menu creation•offer more menus•goes to marketspace

2. Revenues analysis: Stock shares – licensing

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- •rapid and unpredictable in the market•unaffordable licensing

+ •external investment•consistency operation under one license

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List 2013 ($’000) 2012 ($’000)

Revenue 188,631 169,466

Other revenue 106,259 96,421

Other gains and losses 3,564 3,161

Food and paper expenses 85,150 78,679

Employee benefits expense 76,260 65,264

Plant and equipment cost 9,331 8,588

Depreciation and amortization expense 12,792 10,029

Occupancy expense 9,103 7,837

Finance costs 405 451

Marketing expenses 11,430 11,477

Store related expenses 7,182 5,887

Communication expenses 6,351 6,669

Other expenses 39,685 35,523

Profit before tax 40,765 37,664

Income tax expense 12,108 10,708

Profit for the year from continuing operation 28,657 26,936

3. Cost analysis

3. Cost analysis: Food and paper expenses

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-• raising price of paper• ingredients• no standard

+• strong value-supply

chain reduce risk of price fluctuations

• never in shortage

3. Cost analysis: Employee benefit

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-• in some countries,

laws are strict, labor cost is high -> burden to business

+• (+) in some countries,

laws are not strict, minimum wage is low-> higher profit to business

3. Cost analysis: Resources structures

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Tangible

• physical stores• plants• equipments• employees

• investment

Intangible

• brand loyalty• licensing

4. Value creation (Organization perspective)

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• Desktop online ordering

• iPhone & iPad application, Android application, HTML5 ordering system, Facebook ordering page

• New design stores• Chef’s Best menu

• vouchers & coupons

• Cheaper everyday - $4.95

• eClub

• Pizza customization• Chicken, breads,

dessert, drinks

• Online order - save time & enhance productivity

• IT outsource - scalability & cost efficiency

Novelty Lock-in

Complement

a-ritiesEfficiency

Value creation (Customer perspective)

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Brand recognition • 2nd largest pizza chain in NZ• The largest franchisee in the world

Convenience & Accessability• Ordering system in all platforms

Customization•Customizing Pizza: crust, sauce, topping

Risk reduction• Pizza tracker

Price•Value pizza - $4.95•Coupons

Value creation (Social perspective)

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Partners foundation

Doughraiser Fundraisers

Natural Disaster Food Relief

Local sponsorship

Environmental friendly

Customer relationship

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24/7 social media

availability

Well-trained social media team

Real-time feedback

App

Thanks

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Amit, R., & Zott, C. (2001). Value creation in e-business. Strategic Management Journal, 22(6/7), 493. doi: 10.1002/smj.187

Cravens, D. W., & Piercy, N. F. (2013). Strategic marketing (10th ed.). New York: NY: McGraw-Hill Companies, Inc.

Davis, R., Buchanan-Oliver, M., & Brodie, R. (1999). Relationship marketing in electronic commerce environments. Journal of Information Technology (Routledge, Ltd.), 14(4), 319-331. doi: 10.1080/026839699344449

Dess, G. G., Lumpkin, G. T., Eisner, A. B., & McNamara, G. (2012). Strategic management: Creating competitive advantages (7th ed.). New York: NY: McGraw-Hill Education.

Domino's Pizza. (2013a). 2013 Annual Report. Retrieved from http://www.dominospizza.co.nz/media/53065/dpe_2013_annual_report_web.pdf

Domino's Pizza. (2013b). 2013 Full-Year Market Presentation. Retrieved from http://www.dominospizza.co.nz/media/52430/2013_full_year_market_presentation.pdf

Domino's Pizza. (2013c). Domino's Pizza: The facts. Retrieved from http://www.dominospizza.co.nz/media/347568/the-facts-document_july-2014.pdf

Domino's Pizza. (2014). Domino Pizza. Retrieved from http://www.dominospizza.co.nz/

References

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Domino's Pizza. (n.d-a). About Domino's. Retrieved from http://www.dominospizza.co.nz/corporate/about-dominos

Domino Pizza. (2013). People passion pizza. Retrieved from http://investors.dominos.co.uk/system/files/uploads/financialdocs/dominos_ar13.pdf

Gemmell, R. M., Boland, R. J., & Kolb, D. A. (2011). The social-cognitive dynamics of entrepreneurial ideation. . Entrepreneurship Theory and Practice(September), 1-21. doi: 10.1111/j.1540-6520.2011.00486.x

Hoffman, D. L., & Novak, T. P. (1996). Marketing in hypermedia computer-mediated environments: Conceptual foundations. Journal of Marketing, 60(3), 50.

King, L. (2011). Domino's Pizza delivery of IT to outsourcers is 'crucial to resilience'. Retrieved from http://www.computerworld.co.nz/article/495879/domino_pizza_delivery_it_outsourcers_crucial_resilience/

Lee, S. M., Olson, D. L., & Trimi, S. (2012). Co-innovation: convergenomics, collaboration, and co-creation for organizational values. Management Decision, 50(5), 817-831. doi: 10.1108/00251741211227528

Magretta, J. (2002). Why business models matter. Harvard Business Review, 80(5), 86-92.

References

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Microsoft. (2013). Domino’s Pizza. Retrieved from http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=710000002307

Molenaar, C. (2012). E-Marketing: Applications of information technology and the internet within marketing. Great Britain: Routledge: Taylor & Francis Group.

NZBusiness. (2014). Dominos shares social media tips. Retrieved from http://nzbusiness.co.nz/news/dominos-shares-social-media-tips

Pizza, D. s. (n.d-b). Community initiatives. Retrieved from http://www.dominospizza.co.nz/corporate/communityRayport, J. F., & Sviokla, J. J. (1994). Managing in the marketspace. Harvard Business Review, 72(6), 141-150. Statistics New Zealand. (2013). QuickStats about New Zealand. Retrieved from

http://stats.govt.nz/Census/2006CensusHomePage/QuickStats/AboutAPlace/SnapShot.aspx?type=region&tab=PopulationDwellings&id=9999999

Stevens, G., & Burley, J. (1997). 3000 raw ideas equals 1 commercial success! Research Technology Management, 40(3), 16-27.

Touryalai, H. (2013). Technology, not pizza, helps Domino's crush competitors and grow faster than McDonald's overseas. Retrieved from http://www.forbes.com/sites/dalebuss/2013/05/01/with-dominos-live-test-pizza-chain-has-nothing-left-to-hide/

Turban, E., King, D., Lee, J., Liang, T. P., & Turban, D. (2011). Electronic commerce 2012 : a managerial and social networks perspective (7th ed.). Upper Saddle River, NJ: Pearson Prentice Hall

Zott, C., & Amit, R. (2010). Business model design: An activity system perspective. Long Range Planning, 43(2/3), 216-226. doi: 10.1016/j.lrp.2009.07.004

Zott, C., Amit, R., & Massa, L. (2010). The business model: Theoretical roots, recent developments, and future research. (September 30), 1-78.

Zott, C., Amit, R., & Massa, L. (2011). The business model: Recent developments and future research. Journal of Management, 37(4), 1019-1042. doi: 10.1177/0149206311406265

References