Growth is the buzz chased by politicians and businesses but when the market changes, agility is paramount.
Chasing growth was central to the story about Domino’s that did the media rounds last week. A darling of the fast food industry, Domino’s was lauded for its knockout growth, its vast technology investment to drive efficiency and its plans to take the $5.95 pizza revolution to the world. But in its latest profit results, the fast food company has failed to meet a number of targets, a point investors rammed home over the past week
Apart from the investment story, from a marketing and product strategy standpoint the spotlight on Domino’s highlights several key questions.
The case of Domino’s demonstrates that it’s not only important to know your market, you must also be able to change rapidly when conditions shift. Domino’s recorded huge growth because it offered online ordering. However, with the rise of online competitors such as Uber Eats, Foodora and Menulog, it has now never been easier to order food online. And with the variety of choice offered by the newer entrants, the Domino’s advantage has dissipated.
The ability to adapt to market change is a hugely valuable skill, and not only for fast food operators, especially when technological innovation can shift markets almost overnight. With the rise of robo-advice, for instance, financial planning isn’t immune to technological disruption.
Business agility involves planning ahead and understanding how market trends are likely to affect the products and services you deliver to your customers. From a strategy perspective, it’s near impossible to make exact predictions – which hasn’t stopped some businesses from trying. When it comes to change, the key is to adapt your offerings early and, hopefully, before your competition reacts.
Be clear on who you are and what you do
Domino’s attempt to reposition itself as a technology company was lost, to an extent, with the focus on the financials.
While the shift it was trying to make is understandable, it doesn’t appear to have worked. Ultimately it is a fast food company providing a cheap, low-margin product, which is easily substituted. This is central to its problem.
It also lost its identity a little by constantly promoting cheap gimmicks such as a delivery robot and an online artificial intelligence ordering system. While these ploys might make great PR pieces, I’m not sure they add customer value. If anything, it shows how important it is for businesses to be clear about what they communicate to their clients. You need to ensure they know exactly who you are and how you can add value to them. If you don’t get this message across, you run the risk of your brand being lost in a sea of competitors or, as in the case of Dominos, being badly hit by a shift in the market.