The paper intends to discuss about business model and disruption. In order to understand the concept of disruption and business model, the essay begins with giving the overview of business model as well as disruption (Chesbrough, 2010). While business model alluded to the plan of action of an organization, disruption means innovation in the plan of action by smart-connected gadgets. In this easy, the business model of a famous fast food chain company Dominos has been discussed. The business model which has been discussed is disruptive. Additionally, the study sheds light on the two above mentioned perspectives in business. The main purpose of the essay is to understand the importance of disruptive business model in business.
Overview of ‘business model’
The term business model refers to the concept of plan of action that defines how he the company will generate more revenue from market and will pool profit accordingly. However, business models vary from one business to another (Caro & Mart?nez-de-Alb?niz, 2015). For instance, a business model for a automobile company completely differs from a business model of a restaurant. A business model explains what products will be manufactured, what services will be delivered and the procedure to execute the plan including the budget and so on. A business model mainly sheds light on the rationale of the organization while addressing the customer requirement (Clinton & Whisnant, 2018). Through a business model the organization gets a clear idea of other companies’ business strategy and the amount of revenue they generate from market. It also gives an insight as to what are the ideas they apply in their business to make it successful. As per the studies, different companies have different setting of business model with a same purpose. Therefore, it can be said that a business model helps an organization to navigate the path of success by mapping a plan of action. There are three different components of a successful business model that are value proposition key resources and processes and profit formula. These three elements are the essential part of a business model.
The term business disruption alludes to the innovation in the plan of action. Often those innovations are implemented through smart-connected devices. Disruptive business model rejects the traditional strategies while implementing possible changes in the business model (De & van, 2015). On one hand, traditional business model follows the old principles without any changes. On the other hand, disruptive business model seeks risks and takes experimental measures for the further growth of the company. Some instances of disruptive business models can be given which have been adopted by different well-known organizations.
The company Amazon has brought revolutionary changes by introducing Amazon Prime. In Amazon Prime application, famous blockbuster movies are streamed (Forbes, 2018). It has both free and paid version. Viewers can enjoy watching recent movies with the paid version of Amazon Prime. As Amazon has changed the scenario of movies and videos, it also brought changes in the sphere of shopping industry (Osterwalder & Pigneur, 2010). Being the leading online shopping station in the industry, the company has made available of all the leading brands over just one application. They have included smart-connected devices in their business and deliver their products to the customers at their choice of location. They have made possible all these through a single application. With the digitization, Amazon not only offers fast delivery to the customers but also it designed their application and website in such a manner through which the customers can keep a track of their orders. Demolishing the traditional principle of shopping, where customers had face lot of trouble while returning the orders, Amazon made the return procedure easy (Reinventing Your Business Model., 2018). The payment method of the company is based on the smart connected devices; through which customer make their payments without any hassle. The implementation of the smart connected devices means digitization of the company. The primary purpose of the digitization is to reach out to more customers making the extensive use of the technology. When a company adopts the strategy of digitization, it thinks beyond the traditional practices of business strategy. Organizations incorporate smart connected devices in terms digitization which has elevated the business innovation to a more integrated level.
The digitization strategy can be exemplified by Amazon again. The company Amazon not only has brought changes in the shopping industry, bust also changed the scenario of service industry. The customer service of the company is undoubtedly satisfied a large number of customers across the world. Over the online application n and website, the company allows its customers to give a direct feedback of their service (Zott, Amit & Massa, 2011). Meanwhile it provides possible assistance to the customers regarding product information, delivery services and many other aspects. Along with that the company also gives resolves the problems that the customers experience regarding the service. All of this is based on the technology that the company has adopted as part of its digitization strategy.
Dominos and its digitization strategy
The popular fast food chain Dominos has implemented innovation in it business model through which the company has changed the scenario of delivery by incorporating smart connected devices in their business. Through the internet based application, Dominos allows the customer to place orders without any difficulties. The main aspect of it business strategy is the delivery of the food that it offers (Porter & Heppelmann, 2014). Within a minimum time, it delivers pizza to its customers. The smart connected devices are able to take orders, monitoring of the process of the making pizza and customer services. Along with that, the company through the smart connected devices keeps track of the delivery persons so that the customers are satisfied. Beside their own application, Dominos is also available on other food delivery sites. T5he purpose behind this is to reach out to the maximum customer area (Porter & Heppelmann, 2014).
Its latest inclusion in terms of the digitization is its mobile application, which is easier for the customers to make an order from anywhere. The company Amazon not only has brought changes in the delivery game, but also changed the scenario of service industry (Zhu, & Furr, 2016). The customer service of the company is undoubtedly satisfied a large number of customers across the world. Over the online application n and website, the company allows its customers to give a direct feedback of their service. Meanwhile it provides possible assistance to the customers regarding product information, delivery services and many other aspects (Pine, B & Gilmore, 2016). Along with that the company also provides assistance to resolve the problems that the customers experience regarding the service. All of this is based on the technology that the company has adopted as part of its digitization strategy.
Opportunities and threats of the disruptive business model: Dominos
The disruptive business model has both opportunities and threats to the business. Undoubtedly, Dominos is one of those companies, whose demand in the market is increasing day by day. Most of the customers prefer placing order over mobile application and opt for the home delivery option. Presently, in some remote areas, the company charges extra for the delivery of its products. As a result, it has been seen that many of the customers withdraws their order for that extra charges. If the company appoints more employees in the delivery section and provide free delivery options to the customers, especially in the remote areas, it can gain more customers in order to further growth of its business (Zhu, & Furr, 2016).
On the other hand, the treat emerges from the implementing smart connected devices is that the some customers often face difficulties in understanding the concept of internet based applications and the websites (Kavadias, Ladas & Loch, 2016). As a result, they face negative experiences and create consequences, which in turn also create difficulties for the customer services departments to resolve the issues. It further damages the brand image of the company also.
To conclude, it can be said that disruptive business model is grossly adopting by the most of the established organizations across the world in order to increase revenue rate. The paper discusses about business model and disruption. In order to understand the concept of disruption and business model, the essay began with giving the overview of business model as well as disruption. In this easy, the business model of a famous fast food chain company Dominos has been discussed. The business model which has been discussed is disruptive. Additionally, the study shed light on the two above mentioned perspectives in business. The main purpose of the essay is to understand the importance of disruptive business model in business.
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