Domino's takes 5.5% of sales from each franchised site and bills 5% of revenues for a national advertising fund (it also makes a margin on the foodstuffs it sells franchisees). In the pizza business, this works for Dominos and the franchisee. Domino's head office is constantly innovating because its target audience is constantly changing the way it buys food-to-go. For example, moving from phoning up to ordering on-line, which today accounts for 16% of sales and is growing fast. In the US, Dominos was initially successful because it worked out it was in the logistics business and what mattered was delivering pizzas precisely when you said you would. Today, it has to do more to stay ahead in food-to-go.
“Twenty years ago I was driving boxes to the post office in my Chevy Blazer and dreaming of a forklift,” says Jeff Bezos in his most recent letter to shareholders. A blink later and he points out that the company has grown from 30,000 employees in 2010 to 230,000 now. But his ambition is the same. “We want to be a large company that’s also an invention machine. We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness and risk-acceptance mentality that is normally associated with entrepreneurial start-ups.” Amazon is great at disruption because of its customers focus and the fact that the internet means it needs none (or very few) people between its warehouses and the shopper. The threat of Prime, its membership service, is the biggest challenge facing the UK retail market and the wholesale market by extension. It is both a direct threat and an indirect threat in that is inspiring countless numbers of othe...
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