Introduction
Domino’s Pizza has become a notable case study in the fast-food industry due to its strategic transformation steered by innovation, differentiation, and adaptation. The company operates franchise stores in over seventy countries (Ruma, 2023). However, this poses some challenges in the core capabilities, including people, processes, and systems (technologies). Dominos was founded under the promise of doing pizza deliveries within half an hour; otherwise, the customer gets a free pizza. Dominos changed the conventional delivery model through this differentiation, thereby pioneering the industry. As consumer preferences shift, businesses face new challenges in product offerings and human resources (Peccei, R., & Van De (Voorde, 2019). This analytical essay examines Domino’s strategic transition by examining how the firm differentiates from competitors, the challenges faced, and whether it has found a fit between its strategy and human resource practices.
Summary
The case study describes the evolution of Domino’s strategy, including its delivery time differentiation, transformative approaches, and challenges. Domino has for decades stood out in the fast-food industry because of its promise of delivering Pizza within half an hour of receiving an order. It prioritized efficiency by streamlining assembly line processes and standardizing its operations. It was the first company to introduce the conveyor belt technology in pizza making, facilitating temperature regulation and fast pizza preparation. However, it faced new challenges as consumer preferences changed towards high-quality Pizza. As a result, it encountered criticism and lower customer satisfaction. Dominos reacted in 2009 by launching the “pizza turnaround,” improving recipes, expanding the menu, and utilizing fresher ingredients. The strategic change also focused on enhancing human resources to reduce turnover rates. The company also introduced programs such as the “Fastest Pizza Maker” and changed the HR department to increase focus on employee value. Although these efforts significantly reduced turnover rates and enhanced customer satisfaction, labor disputes and negative publicity have persisted, mainly due to employee salaries.
How Domino’s differentiated itself from competitors
According to Belcourt et al. (2022, p.56), the key to a company’s success is establishing core competencies around systems (technologies), people, and processes. After its founding in the 1960s, Domino’s differentiated itself through fast pizza delivery to many competitors at the time. This helped the company to improve customer satisfaction by eliminating one of the notable customer complaints. At the operational level, the company introduced an assembly-line system such as the conveyor belt technology to reduce baking time and ensure uniformity of oven temperatures; unlike most competitors who emphasized in-store dining and pizza customization, Domino’s strategically made pizzas in advance and avoided in-store dining to diminish operational complexity and concentrate on fast delivery. On the HR front, the firm focused on retaining experienced and skilled store managers and used the “People First” approach to motivate employees and reduce employee turnover. Employees are a vital resource that underlines a firm’s core capabilities (Collins, 2021). Their abilities, knowledge, and skills are critical for executing the business plan to generate optimum customer value (Belcourt et al., 2022, p.50). Because of this differentiation in HR practices, employees can choose to work at Domino’s instead of their competitors, reducing the turnover rate. Domino’s also demonstrated an innovative approach through investment in mobile ordering applications that enabled customers to track their orders. The company also gamified pizza-making processes through the Pizza Hero games, where the fastest pizza maker would win an award and an advantage in getting a job.
Whether the company has achieved a long-term strategic shift in its HR practices and strategy
The company has implemented various strategic moves to align with the critical components of its business model, including timely delivery and HR practices. The initial strategic focus was on efficiency and fast delivery. With time, consumers were tired of just speed, and their satisfaction score diminished. Domino’s recognized the importance of strategic adaptation, and in 2009, it reacted by launching the “pizza turnaround,” improving recipes, expanding the menu, and utilizing fresher ingredients. Domino’s strategic alignment with HR practices is evident in its technological approach. Technological investments such as mobile and online ordering software have improved operational efficiency and stayed in line with the overall company strategy of remaining ahead in technological developments in the industry.
Domino’s has also committed to aligning its long-term strategy with HR practices. Implementing People First and focusing on training store managers to become more efficient has helped the company reduce high turnover rates. This demonstrates a dedication to keeping and valuing employees. The “World’s Fastest Pizza Maker” event reinforces this commitment by creating an engaging environment. HR processes outline a combination of inputs needed in the strategic formulation to determine whether a company has the numbers and qualifications required to pursue its strategy (Belcourt et al., 2022, p.56). In the case of Domino’s, the company has to decide whether it has adequate resources to increase employee remuneration and, if so, how it would approach its implementation in the franchises. This is a significant challenge facing Domino’s, especially in Europe, where the company must meet the minimum wage demands (Vrontis et al., 2022). Besides, events such as labor disputes and negative publicity suggest ongoing struggles to ensure a balance between long-term strategic shifts and HR practices. Notably, the 2011 saga in which employees posted a video on YouTube in which they inappropriately handled and contaminated Pizza indicated gaps in employee training and supervision.
Conclusion
The case study demonstrates that balancing long-term strategic shifts and HR practices is challenging. In the fast-food industry, where the competitive landscape is complex and consumer preferences keep changing, Domino’s will need to increase efforts to achieve a perfect fit. Domino’s has successfully adapted to improve pizza quality and reduce employee turnover but continues to face labor disputes and minimum wage requirements. In the next chapter of its strategic shift, Domino’s will need to determine how to improve and standardize employee wages within its franchises, but it should determine who should bear the additional costs, whether it is Domino’s themselves, its franchises or customers. Additionally, the company should hire employees whose values align with its corporate culture through value-based hiring.
References
Belcourt, M., Singh, P., Snell, S., & Morris, S. (2022). Managing Human Resources 10CE. Cengage Canada. Pp. 39-79.
Collins, C. J. (2021). Expanding the resource-based view model of strategic human resource management. The International Journal of Human Resource Management, 32(2), 331-358.
Peccei, R., & Van De Voorde, K. (2019). Human resource management–well‐being–performance research revisited: Past, present, and future. Human resource management journal, 29(4), 539-563.
Ruma, Z. (2023). International Marketing and Implementation in Business: Case Study in Domino’s Pizza. International Journal of Humanity Advance, Business & Sciences, 1(1), 1-8.
Vrontis, D., Christofi, M., Pereira, V., Tarba, S., Makrides, A., & Trichina, E. (2022). Artificial intelligence, robotics, advanced technologies, and human resource management: a systematic review. The International Journal of Human Resource Management, 33(6), 1237-1266.
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