GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue.

5 (OCTOBER 2022), 1-16

pISSN 1088-6931 / eISSN 2384-1648∣Https://doi.org/10.17549/gbfr.2022.27.5.1
ⓒ 2022 People and Global Business Association

GLOBAL BUSINESS & FINANCE REVIEW

www.gbfrjournal.org 1)

Integrating Digital Transformation and Servitization into Digital

Servitization: A Case Study on Domino’s
Marasini Durga Prasada, Seong No Yoonb, DonHee Leea†
a
Department of Business Administration, INHA University, 100 Inha-ro, Michhol-gu, Incheon, Republic of Korea
b
Department of Business, Edward Waters University, 1658 Kings Road, Jacksonville, FL 32209

ABSTRACT

Purpose: The purpose of this study is to suggest a digital servitization model which can be implemented by the
restaurant industry and to explore the opportunities and challenges of digital servitization.
Design/methodology/approach: The case study analysis method was applied for this research.
Findings: This study reveals that pizza firms can gain competitive advantages and create value by implementing
the digital servitization business model. In addition, firms can understand the opportunities and challenges of digital
servitization and prepare themselves before implementing the business model.
Research limitations/implications: Digital servitization model was proposed to analyze a single pizza company
but a comparative study with other firms can be conducted to identify differences and create a common strategy.
Originality/value: Firms commonly use an integrated digital transformation and servitization model to create cus-
tomer value, but few case studies on integrated case models are available. This study investigates this research
gap using a case study. The findings of this study have meaningful implications for restaurant managers to imple-
ment a digital servitization strategy.

Keywords: Digital Transformation, Servitization, Digitalization, Digital Servitization, Competitive Advantages

I. Introduction processes using DTs to maintain their competitive

advantages (Vial, 2021). Additionally, businesses have
changed their business models, updated their products
In recent years, the corporate environment has and services, improved their relationships with suppliers,
undergone dramatic changes as a result of the introduction and formed long-term alliances with customers (Ebert
of digital technologies (DTs) such as artificial intelligence and Duarte, 2016; Kraus et al., 2021). Service providers
(AI), cloud computing, big data, and the Internet of and manufacturers go through change and development
Things (IoT) (Hanelt et al., 2021). Numerous businesses with digital transformation as a result of technology,
have recently launched initiatives to research novel deregulation, globalization, and intense competitive
DTs and reap their benefits (Kraus et al., 2021). pressure. For instance, companies like Apple and Spotify
Organizations have modified their value creation have transformed the music industry by replacing
the actual items sold through intermediaries with music
Received: Jul. 4, 2022; Revised: Aug. 11, 2022; Accepted: Aug. 16, 2022 subscription services (Vial, 2021). Starbucks has also
† DonHee Lee expedited its digital transformation by offering consumers
E-mail: [email protected]

ⓒ Copyright: The Author(s). This is an Open Access journal distributed under the terms of the Creative Commons Attribution
Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution,
and reproduction in any medium, provided the original work is properly cited.
GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue. 5 (OCTOBER 2022), 1-16

various options and convenience through the Siren behavior, the retail internet sector has recently experienced
Order and involving customers in the service process, impressive growth (Lee and Lee, 2020). In the case
and generating value for them (Lee, 2020). Businesses of the restaurant industry, more than 50% of consumers
have undergone a digital transformation to increase do not plan to eat out anytime soon, and revenue
productivity and transparency, cut costs, increase for dine-in restaurants has decreased by more than
revenue, enhance customer experience, foster employee 80% since 2019 in the restaurant business (Jang, 2021).
engagement and culture, and gain a competitive The digital revolution has increased competitiveness
advantage (Kimberling, 2020). in the food and restaurant sector, and most recently,
Currently, most industrial sectors (such as the COVID pandemic has had a decisive impact (Alt,
manufacturing, healthcare, entertainment, education, 2021). In one of the most challenging business
and food) have implemented various initiatives to environments, restaurants have invested in digital
explore innovative DTs (Bogdandy et al., 2020). devices, such as point-of-sale (PoS) devices, e-commerce
However, incorporating DTs alone is not sufficient platforms, and online ordering systems. These resources
to gain a competitive advantage. The servitization aid eateries in communicating with customers and
concept and digital transformation should be included taking orders (Soto-Acosta, 2020). The patterns of
to survive in this competitive and disruptive business interaction between customers and restaurants are
environment. According to research, servitization and evolving because of the growing engagement of
digital transformation are mutually reinforcing and restaurant patrons in the digital world (Kim and Tang,
drive each other (Dombrowski and Fochler, 2018). 2020). Restaurants strive to adopt new digital technology
Digital servitization (DS) refers to the interaction that will enable them to improve customer expectations
between servitization and digital transformation and and increase operational performance. Digital transformation
its effects on the operational strategies, value chains, has a significant impact on how customers behave during
operations, and business models (Momeni et al., 2021). their purchasing processes (Martín-Martín et al., 2022).
Firms that provide products and services to customers Thus, as DTs advance, the restaurant sector is going
using a DS approach can increase customer satisfaction, through fundamental shifts that will alter what constitutes
meet their demands, improve operational efficiency, a restaurant in the future as technology and data are
and gain competitive advantages (Momeni et al., 2021; incorporated into marketing and management (Park
Sklyar et al., 2019). For instance, DS has created and Kim, 2020).
enormous growth potential for businesses by adding Digital disruption also occurs in the pizza industry,
value and enhancing their technological capacity part of the food and restaurant industry. According
(Kolagar et al., 2021). to 'Pizza Power Report 2020’ of PMQ pizza magazine,
Recent COVID-19 has not only affected people’s the United States (US) pizza industry has increased
health but has affected business worldwide. Small efficiency by introducing new technologies, effective
companies that depend on physical places, such as customer relationship management (CRM) operation,
wineries, bridal shops, hair salons, pet shops, and intact services, customized products, and services.
boutiques, were severely impacted by COVID. To get The COVID-19 pandemic made non-face-to-face
through this challenging phase, they quickly implemented services inevitable. The adoption and acceleration
DTs (such as e-commerce, conferencing tools, etc.) of ordering through digital devices, contactless product
(Mandviwalla and Flanagan, 2021). Retail stores can delivery, and takeout are increasing rapidly in the
anticipate various advantages from DT integration, pizza industry. Currently, the analysis that the US
including a potent marketing channel, broad mall reach, pizza industry is "taking advantage of digital disruption"
instant flash sale potential, customization of in-store is dominant (Park and Kim, 2020). This shows that
reward programs, and quick and accurate receivables the pizza industry is evolving by emphasizing the
(Varol and Özçelik, 2022). Due to contact-free purchase adoption of digital technology and guaranteeing effectiveness

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 Marasini Durga Prasad, Seong No Yoon, DonHee Lee

and safety in the ordering and delivery process. (Park to DS to fill this knowledge gap. This study will
and Kim, 2020). provide insights for other firms on incorporating DS
In the US pizza industry, Domino’s, Pizza Hut, strategies. This paper is divided into six sections.
and Little Caesars Pizza are the three dominant firms Section 2 highlights the theoretical background of
in terms of sales (Park and Kim, 2020). Most pizza digital transformation and servitization. Section 3
companies and restaurants are already using or on presents the differences and similarities between
the verge of introducing DTs and a new service model Domino’s in three countries. Section 4 explains the
to gain competitive advantages. Among these businesses, servitization model and the digital transformation
Domino's was a pioneer in DT adoption. Since 2010, process implemented by Domino’s. Section 5 describes
Domino's Pizza has shifted its business strategy from the challenges and opportunities, and Section 6 provides
"Mobile First," which prioritized delivery speed, to the conclusions and limitations of the study.
"AI-First," which emphasizes digitalization-oriented
innovation such as the development and introduction
of AI technology and the maximizing of customer
lifetime value (CLV) (Park and Kim, 2020). With II. Theoretical background
a relatively short period of focus on technology
capabilities, Pizza Hut is currently working on robotics
and focusing on autonomous technology, standardization The unforeseen coronavirus (COVID)-19 pandemic
of services, and improvement of delivery. Little Caesars has accelerated the previously slow development and
Pizza is implementing a plan to expand its existing implementation of DTs and infrastructure in many
model and strengthen its mass service strategy by businesses and industries (Lee and Lee, 2021), such
adding technology-introduced mobile and autonomous as retail, restaurants, banking, hotels, and education
services. Technology now plays a significant role (Soto-Acosta, 2020). This pandemic has disrupted the
in operations management for restaurant businesses market and service ecosystem and caused sudden
due to the expansion of the telecommunications sector environmental changes that encourage firms to adopt
and the development of advanced technologies to digital technology on a broader scale and under time
support service delivery. For example, pizza firms constraints (Priyono et al., 2020).
are implementing business models that integrate DT DTs and transformation have evolved to regulate
and servitization approaches to operate efficiently the precarious equilibrium between lockdowns and
and gain a competitive advantage. socioeconomic continuity in such a crisis (Fitzpatrick
Digital transformation and servitization have been et al., 2020). The need for contactless services, remote
studied separately. To create customer value, businesses employment, online purchases, online health services,
frequently utilize an integrated digital transformation and customized deliveries could only be met by DTs
and servitization strategy. However, there aren't many and servitization concepts (Savić, 2020). Additionally,
case studies on these models. Therefore, research is DTs have improved our quality of life and allowed
required to determine how the integrated concept businesses to continue operating somewhat normally
of digital transformation and servitization influences during this pandemic. The pertinent literature review
the creation of business strategies that differentiate on digital servitization, servitization, and transformation
companies apart from their competitors. The purpose will be looked at in this part.
of this study is to suggest a digital servitization model
which can be implemented by the restaurant industry
and to explore the opportunities and challenges of A. Digital Transformation
digital servitization. This study uses a case analysis
of Domino's digitization and servitization approach Companies are switching from product-centric

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business models to digital service offerings that employ integration of value chains and the exploitation of new
digitalization to meet client expectations (Kolagar et al., markets, giving the industry a competitive advantage
2021). By reducing boundaries between people, firms, (Ebert and Duarte, 2018).
and things, a company's digital transformation disrupts DTs enable value creation, which increases the
businesses in practically every industry (Schwertner, provision of services to customers (Barrett et al., 2015).
2017). Verhoef et al. (2021, p.891 ) proposed the Although digital transformation is to improve the
three stages of digital transformation as "digitization, operational processes, develop products/services, and
digitalization, and transformation." "Digitization is the reduce waste time to enhance the entire process for
encoding of analog information into a digital format customers’ expectations, it is not an easy journey to
(i.e., into zeros and ones) such that computers can store, apply and succeed (Tomičić Furjan et al., 2020). In
process, and transmit such information." (Verhoef et this regard, Siemens is an industrial firm that uses a
al., 2021, p.891). Rha and Lee (2022, p.78) described digital transformation to create a more efficient and
digitalization as "the use of DTs and data to affect customer-focused organization. They have achieved
how work is done, transform how customers and this by implementing a new digital enterprise platform
businesses engage with and interact with each other, to connect better with their customers and partners
and establish new digital revenue streams." Vial (2021, (Lee and Lee, 2020).
p.9) defined digital transformation as "a process that
aims to improve an entity by triggering significant
changes to its properties through combinations of B. Servitization
information, computing, communication, and connectivity
technologies." Ebert and Duarte (2018) reported digital Although DTs are critical, achieving competitive
transformation drives to enhance value creation, advantages only by implementing DTs is challenging.
operational performance, and social welfare. It produces Servitization, an economic megatrend in modern society,
company-wide changes that affect the entire company is necessary to achieve this goal. "Servitization is the
and its business strategies, including agility and resilience innovation of an organization’s capabilities and processes
(Kretschmer and Khashabi, 2020). In addition, digital to better create mutual value through a shift from
transformation is tied to improvements in various selling product to selling Product-Service Systems"
aspects of an organization, including competitiveness, (Baines et al., 2009, p.4). In the previous study,
innovativeness, reputation, and operational performance. servitization has been defined as follows: The evolution
(Neumeier et al., 2017). of a service to an inseparable stage is completely
The IoT, big data, AI, and cloud computing are fused with a product (Robinson et al., 2015); a strategic
examples of DTs that are at the core of the digital change in which a manufacturing company becomes
transformation and are also seen as facilitators for service-oriented or develops better services to satisfy
a more sustainable and circular economy (Rusch, 2022). customers, gain a competitive advantage, and improve
Many firms have incorporated these technologies to corporate performance (Ren and Gregory, 2007); and
enhance their business and achieve revenue. Firms organizational capacity and process innovation to
have used DTs to improve the flexibility and reliability create better mutual value by shifting from product
of the process and product quality, which also allows for sales to product/service integrated system sales (Lightfoot
implementing new strategies along the entire value et al., 2013).
chain through manufacturing and sales to services (Branca The concept of servitization is generally recognized
et al., 2020). Supply chains, corporate operations, and as creating value by adding service concepts to products,
producing goods are all impacted by the incorporation and it grew as early manufacturing companies added
of DTs. (Matt et al., 2015). DTs will significantly impact services to their products (Hojnik, 2016). It means a
the business environment of the industry through better development approach to exceed customer satisfaction,

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 Marasini Durga Prasad, Seong No Yoon, DonHee Lee

achieve sustainable business and competitive advantages, strategies by embracing DTs (Pagoropoulos et al.,
and expand market share (Dahmani, 2020). Xerox 2017). Martn-Pea et al. (2018) stated that businesses
is an example of a firm that applies the servitization interested in servitization should first carry out digital
model. Initially, it was a product-based company that transformation. Business models severely affected
sold printers and photocopiers. Many manufacturers by DS include the musical industry, health sector,
(e.g., GE, IBM, Rolls Royce, etc.) have now transitioned education, e-commerce, and e-books (Marcon, 2019).
to a service-based business model, in which they With DTs, organizations can shift from selling physical
provide services to consumers (Kamal et al., 2020). items to providing services as part of their value
offer, as well as come up with new innovations that
meet customers' demands and collect customer data
C. Digital Servitization (Porter and Heppelmann, 2014; Wamba et al., 2017).
DTs can encourage innovation or result in innovation.
Digital servitization (DS) is defined as "the transition Offering new functionalities and value-added to existing
toward smart product-service-software systems that products or services is how digitalization is viewed
enable value creation and capture through monitoring, in the context of innovation outcomes (Nambisan, 2013).
control, optimization, and autonomous function" DTs can expedite the process of servitization by enabling
(Coreynen et al., 2020, p.267). Sjödin et al. (2020, them to offer sophisticated and cutting-edge services
p.479) defined DS as "the transformation in process, (Shen et al., 2021). Advanced technologies, innovation,
capabilities, and offerings within industrial organizations and digitalization have driven servitization (Kryvinska
and their associated ecosystem to progressively create, et al., 2020). Businesses can use DTs to benefit from
deliver, and capture increased service value arising and drive servitization, which can reduce challenges
from a broad range of enabling technologies." Sklyar and risks associated with it while maximizing its
(2021, p.12) defined DS "as the utilization of DTs benefits (Ardolino et al., 2018). Additionally, the
for transformational processes, whereby a company provision and development of digitally assisted services
shifts from a product-centric to a service-centric business allow enterprises to enhance their competitive advantage
model and logic." and performance (Shen et al., 2021). Consequently,
DTs have played a vital role in implementing DS this interaction between digitalization and servitization
strategies. Companies consider DTs to keep social yields a new concept known as DS.
distancing and adapt to the "new normal" (Soto-Acosta, Businesses that rely on DS frequently manage to
2020). As customers have focused on their core activities hold up a competitive advantage in the market. (Shen et
and outsourced peripheral ones, the demand for services al., 2021). With DS, organizations can sense and seize
has also increased (Gebauer and Fleisch, 2007). In order new opportunities for business growth by integrating
to maximize their service offerings, companies should new innovative service offerings with smart product-
make use of digitalization and technological advancements. service systems (Linde et al., 2021). DS also allows
Digital capabilities have enabled companies to provide small and medium-sized firms to transcend their
better, more accurate, and more reliable services by "local" liabilities and expand globally through the
identifying customers and products, geolocating, assessing use of advanced digital services and support tools
usage, monitoring several indicators, predicting problems, (Schroeder et al., 2020). Thus, firms are driven to
and remotely controlling the equipment (Ardolino et implement a DS strategy due to fierce competition
al., 2017; Kohtamäki et al., 2020). and technological advances (Coreynen et al., 2020).
According to research, servitization and digitalization Companies across a wide range of industries have
are closely related, and digital transformation technologies been confronted by the COVID-19 pandemic. Many
are key forces behind servitization (Dombrowski and of these businesses are under intense pressure to make
Fochler, 2018). Firms can improve their servitization their products available through digital channels and

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have been forced to establish new internal working incorporated DS and has transformed from a pizza
methods. The COVID-19 outbreak has prompted the company to a tech giant in the present world (NCR, 2021).
development of digital services and forced service Established in 1960 and franchised in 1967, Domino's
providers to focus their efforts on developing products Pizza chain has the most revenue globally, followed
using digital technologies (Rapaccini et al., 2020). by open stores (Park and Kim, 2020). Its business
Furthermore, the COVID-19 crisis presents manufacturers model is straightforward: "preparing and serving
with an unprecedented opportunity to update their quality food at a competitive price, with easy ordering
business models quickly and create specific products access and efficient service, aided by technological
and services that meet customer needs (Paiola and innovations" (Domino’s annual report 2021).
Gebauer, 2020; Zambetti et al., 2020), and redesign In 2008 and 2009, Domino’s experienced its worst
their offer delivery models (Tian et al., 2021). crisis and nearly bankrupted. The company lost its
DS is gaining momentum, and it will be an essential competitive edge, and its pizza ranked last in consumer
business model for firms to survive in this competitive taste surveys (Buvat et al., 2017). Domino's operates
business environment, gain competitive advantages, 18,800 shops in more than 90 countries with a daily
and create value for customers. Although several firms sales volume of 3 million pizzas and net revenue of
have incorporated either digitalization or servitization $4,12 billion in 2020 (Domino’s annual report 2021).
approaches to gain competitive advantages, an integrated Domino's stock price beat renowned tech behemoths,
DS model provides the advantages of both methods. including Amazon, Apple, Facebook, and Google,
Lockdowns and other preventative measures have from 2010 to March 2017 (Purdy, 2017). Even in
caused significant sales losses for restaurants all around this pandemic, where many firms have struggled,
the world (Kim & Lee, 2020). They have made significant the Domino business has flourished.
investments in digital resources, including PoS devices, Domino’s has heavily invested in digital capabilities,
online ordering systems, and e-commerce platforms, marketing, and software engineering staff to propel
in addition to developing new pickup and delivery the company forward (Domino’s 10-K Annual report,
procedures and low-contact client engagements in 2016). Innovations in ordering and delivery, such as
order to sustain their business (Alt, 2021). The pizza AnyWare applications to order from any device and
industry has also taken the path of digital transformation drones and automated cars for delivery, differentiated
and servitization. The future world for restaurants Domino from its competitors (Garf, 2020). The vision
is believed to be completely changed after the pandemic of Domino's to optimize delivery, locate outlets in
and will not be similar to the pre-pandemic period affordable and route-optimized retail sites, and create
(Milwood & Crick, 2021; Murphy, 2021). In this study, a successful digital brand and mobile application is
Domino’s DS approach is examined, and a model now paying off (Keesling, 2020). Domino’s successfully
that can be used by other firms is suggested. introduced DTs, which resulted in competitive advantages
over other brands, leading to a more significant market
takeover, increased turnover, customer satisfaction,
value creation, and loyalty (Pratap, 2021). Therefore,
III. Case Analysis Domino’s for our case study was selected to analyze
its digitalization and servitization approach and to
propose a DS model.
Several companies have embraced DTs and
servitization concepts in this challenging business
environment to gain a competitive advantage. However, A. Domino’s Characteristics Country-wise
Domino's, for our case analysis in this study, was
selected because it is a successful company that Three countries―the US, Australia, and Korea―

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 Marasini Durga Prasad, Seong No Yoon, DonHee Lee

were selected for our study. Although Domino’s has Patrick Doyle, the CEO of Domino, boldly pursued
stores in more than 90 countries, we chose these three a multi-pronged strategy with a focus on technological
countries because the US is where the company is and product innovation. It transformed Domino's into
headquartered and has a disproportionately high number an "e-commerce company that sells pizza" rather than
of locations. Australia is the largest master franchisee just a company that sells pizza online (Wong, 2018).
for Domino’s Pizza brand outside the US and has Numerous manufacturers have tried to differentiate
a crucial role in overseas sales and development. Korea their products through product services to increase
is one of the largest markets in Asia and has advanced sales because the quality gap between manufacturers
information technology (IT)/digital systems. has narrowed as a result of the standardization and
Table 1 (comparison of Domino’s by country) shows modularization of parts and global sourcing (Won,
that Domino’s has been a leading pizza company 2010). Due to the different promotion strategies, success
in all three countries in terms of sales. New technologies factors, and considerations that depend on the target
have been incorporated for swift delivery services (promotion of product sales or service revenue rise)
but not the same technology across these countries. and the type of service, combining products and
Domino’s Australia seems to be on the frontline in services (added or derivative type) requires a different
terms of advanced digital services in comparison to approach.
Dominos USA and Domino’s Korea. The number of In order to differentiate itself from its competitors,
Domino’s stores differs in these countries because Domino's has been offering digital services in the
of differences in geography, population, competitors, following areas: accounting and controlling, ordering,
etc. Domino's has been creating pizza in accordance payment and transaction, sourcing and supply, staffing
with local preferences. As a result, different pizza and employee education, comforting and entertaining,
menus exist based on the nation. To serve the market, delivery, digital signage, food preparation, hygiene,
it employs a differentiated targeting strategy based information and marketing, and staffing (Alt, 2021).
on taste and preferences.

C. Domino’s Digital Servitization Approach

B. Domino’s Digital Services
Domino's was a well-known brick-and-mortar
The brand directory lists Domino's as the fifth- pizza restaurant that advertised "30 minutes or less"
ranked restaurant for 2021 and the largest pizza for delivery. The firm's conventional pizza delivery
company in the world as of right now. However, method has been seriously threatened over the past
Domino's stock price fell to its lowest levels in 2008; 20 years by the expansion of the Internet and the
to rebound, Domino's developed a unique plan. J. use of mobile devices, which has compelled the

Table 1. Comparison of Dominos by country

Dominos (USA) Domino's Pizza Enterprises (Australia) Dominos (Korea)

• Established in 1983, the master
• Established in 1960, headquarter • Established in 1990, franchise.
franchise
• Has 6571 stores (2022) • Has 477 stores (2021.12)
• Has 717 stores (2022)
• Early-stage drone delivery test • Tested drone delivery service in 2021
• 1st pizza delivery by drone in 2016
• Robot car (Nuro) delivery service (Sejong district).
(Auckland)
(Houston) • Robot car delivery in progress
• Robot car delivery in progress
• Review for DOM pizza checker • Review for DOM pizza checker
• Introduction of DOM Pizza checker
• Philly Steak Pizza is the most popular • Domino New York's original pizza is
• Pepperoni is the most popular pizza
pizza the most popular.
• Highest sales pizza company in
• Highest sales pizza company in the US • Highest sales pizza company in Korea
Australia

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company to provide online ordering. These technological Examples of solutions under the performance-oriented
developments forced Domino's to create a new business model include sales operations and maintenance
business plan to compete. (Ottenbacher & Harrington, (O&M), consultancy, turn-key, integrated, and data
2009). To differentiate itself from its rivals and to analytics services. Servitized business models contain
meet changing customer demands, Domino's, a pioneer various components, including value propositions,
in the field of online delivery, has invested in digital markets, value chains, value networks, profit potential,
tools, mobile technology, and data analytics platforms and competitive strategies (Gunnarsson and Axelsson,
(Domino’s 10-K Annual report, 2016). Domino’s 2019; Saxena,2020). In order to carry out their strategy
describes itself as "a tech firm as much as a pizza and generate profit, businesses must recognize the
company" today (Taylor, 2016). necessary principles inside each element of a servitized
The success of the firm is mainly dependent on business model.
a seamless delivery experience. To improve the service, Dominos have identified those relevant concepts
Domino's has made considerable investments, installing and implemented them in its business model. In
GPS in half of its locations and creating an online Domino’s case, these service components can be
tracker that keeps track of the driver's journey. Due categorized as product innovation, technological
to crucial improvements, digital channels now account innovation, customization, and service commercialization.
for 4/5 of Domino's sales (Rogers, 2018). Domino's
aims to effectively use its data to evaluate and forecast 1. Product innovation
consumer behavior, personalize messaging, and do
market research. The company is also interested in Pizza, the only product sold in Domino’s, had
exploring the part voice, and chat will make the to be the best for people to buy and eat. The customers’
ordering experience easier and faster in the future. negative reviews of Domino’s pizza were a harsh
To improve the consumer experience, Domino's has truth; the company's strategy was to acknowledge
embraced technology in every way. The development the low quality of its pizza. The company discarded
of a digital platform with a customer-facing focus its 49 years old recipe and announced a new menu
was one of Domino's primary digital transformation and pizza, launching a campaign called "Oh yes, we
initiatives. Domino's facilitated customer ordering and did." At the time, Chris Brandon, Domino’s spokesperson,
significantly invested across multiple digital platforms said: "Our 'Oh Yes We Did’ campaign only shows
(Tiwari, 2020). consumers that we have indeed been hearing what
Huikkola and Kohtamäki (2018) have classified they have to say - but it also shows them how we have
servitization business models into four types: product done so." (Goel, 2020). They changed the ingredients
business model, service-agreement business model, used, and the chef team strived to develop a pizza
process-oriented business model, and performance- menu based on people’s tastes.
oriented business model. The production, sale, and Product innovation can also be found in Domino's
delivery of a product, as well as supplemental services, international markets, where head franchisees can
form the foundation of the product-business model. suggest products based on local consumer preferences.
Service-agreement business model focuses on service It also introduced side menus (chicken, pasta, sandwich,
agreements. The services offered under this business etc.) to its stores so customers could enjoy products
model primarily support the usage of tools, the other than pizza. During the pandemic, product
accessibility of products, and their dependability and innovation helped Domino’s recover its customers
functionality. Process-oriented business models provide and attract more people interested in a delicious pizza
several services such as sales outsourcing, operations at affordable prices and comfort. The company used
management, equipment maintenance, remote diagnostic an automated pizza-making robot and developed a
services, project management, and equipment leasing. unique packaging box to warm the pizza during

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 Marasini Durga Prasad, Seong No Yoon, DonHee Lee

delivery. Technology helped Domino’s develop existing 3. Customization

products and create new products effectively.
Domino’s utilizes customer involvement for customization
2. Technological Innovation to fulfill customers’ needs and satisfaction. Customers
are at the core of any business, and their participation
Customers want to order food quickly and easily. is essential. Domino’s has been working toward
Thus, Domino’s has implemented DTs to improve customer comfort and satisfaction. Domino's dedication
its ordering and delivery systems, heavily investing to digital technology has improved value for customers
in digital capabilities. Domino's initially created by lowering the hurdles to ordering and delivering
strong IT skills, allowing the business to develop their pizza. Customers can easily select the pizza
these new digital advances internally before putting type, ingredients, and collection using digital devices.
these digital innovations into practice. Domino's Customer feedback has been seriously considered,
brand perception has radically altered as a result of which has helped Domino’s rank higher in customer
the digital transformation from a pizza delivery service satisfaction. Various discount events and promotions
to a technology corporation. Domino's became a also attract more customers. Domino’s has actively
technology firm thanks to its desire to concentrate provided value to its customers to satisfy them and
on operations and customer experience, as well as its become a trustworthy brand.
dedication to creating and uniting behind a compelling
vision. Every advancement in Domino's digital 4. Service commercialization
technology has been used with the goal of creating a
seamless consumer experience (Roepke, 2019). Domino’s Domino’s is a worldwide brand with over 18,000
digital journey can be summarized as presented in franchise units in the US and across six continents
Table 2 (Domino’s digital journey). in 90 international markets. Necessary guidelines and
training are provided to franchisees to open a new

Table 2. Domino’s digital journey

Date Activity Implication

1984 Pizza delivery within 30 minutes For customers who ordered pizza by Phone call
Helped to make customers' experience convenient as pizza could be ordered
2007 Introduced online and mobile ordering
easily.
Using cutting-edge technology, customers can track the status of their online
launched "pizza tracker technology" orders as they leave the oven and are ready for pickup or delivery. Allowed
2008
and pizza builder consumers to customize their pizza with their preferred crust and toppings
and watch it come to life on the computer.
2009 Initiated "Oh yes we did campaign" Change of pizza recipe, the addition of new menus to improve product quality.
2011 Launched iPhone app- order on the go Helped iPhone users with a seamless ordering process
2012 Opened "Pizza theater" Brought the fun and art of pizza-making to the forefront.
Launched cutting-edge artificial-
2014 AI helped in easy ordering.
intelligence ordering bot, Dom
Allows customers to order from several devices in many ways, anywhere,
2015 Launched Anyware app
at any time.
2016- First-ever delivery by drone Delivered pizza by drone in New Zealand for the first time, a self-driving
2017 launched Dominos Robotic Unit (DRU) vehicle that delivered pizza and reacted to customer
2018 Domino’s hotspot feature delivery to locations without actual addresses like parks, riverside, etc.
2019 DOM pizza tracker-(Australia) tests the quality of pizza, and if it doesn’t pass the test, it's remade.
2020 Domino’s Carside delivery service Pizza can be ordered contactlessly and delivered right to the customer's vehicle.

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GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue. 5 (OCTOBER 2022), 1-16

Table 3. Digital servitization matrix of Domino’s

Product innovation Technological innovation

- Introduction of new menu - Introduction of IT applications (Digital transformation) for
- Change of ingredients Swift ordering and delivery system
Customization (customers’ involvement) Service commercialization
- Choice of own ingredients - Establishment of master franchise
- Customer feedback - Strong supply chain
- Discount system - Training Facility

Domino’s store. Domino’s receives royalties through customized and effective services (Paiola and Gebaur,
domestic and international franchising, supply chain 2020). Big data, the cloud, the Internet of Things, and
revenue, and retail sales at its own stores. Additionally, other cyber-physical technologies have all had a
the business makes money from running a large number significant impact on how people conduct business,
of restaurants, as well as by selling food, supplies, including how they communicate and think about it.
and equipment to franchisees, primarily in the US This wave of digital technology has also changed how
and Canada. Domino’s franchisees are privileged as equipment is created and maintained (Tronvoll et al.,
they can use the technology and innovative ideas 2020). In several industries, the growth of digital
brought up by the Domino headquarters (Buvat et infrastructure has been expedited by factors including
al., 2017). The PULSE PoS solution from Domino's is natural disasters, pandemics, and consumer purchasing
intended to boost franchisee and corporate management patterns (Lee and Lee, 2020). As a result, companies have
operational effectiveness. Domino’s markets are also adopted a DS approach to grow their businesses.
annually increasing, and it is expected to open stores Domino’s differentiates itself from other pizza firms
in more countries, leading to more global expansion. by using digital technologies and servitization. The
In summary, Dominos have created value for customers’ overall experience is vital for a comfortable
customers by implementing DS, which focuses on sustaining business in this competitive market. Domino’s
product, technology, service, and customization (see has used DTs to make customers’ journeys seamless
Table 3). DS can act as organizational resilience and and meet the demands for easy ordering and a swift
allow the organization to change its management delivery system. The introduction of DTs has changed
structure, procedures, and practices ensuring long-term consumer behavior and lifestyles. Domino’s has an
corporate survival while dealing with crises and excellent infrastructure for ordering food quickly from
disasters (Hamsal et al., 2022). any channel, delivering a seamless experience across
Based on Domino’s case study and its proposed devices. In addition, it has a fast, convenient, and
DS approach, we briefly examine the opportunities accessible delivery system. To help other small businesses
and challenges of DS in the next section. prosper, Domino's may offer them access to its digital
infrastructure, create a separate joint venture company
to participate, and reach arrangements with payment
companies (Denning, 2021). This strategy can help
IV. Opportunities and Challenges of the company grow. Other pizza firms have followed
Digital Servitization Domino’s path and invested in digital technology.
Domino’s has accumulated a large amount of
consumer data that can be used for cloud-based
One of the significant shifts in business nowadays customer relation management. Consumer data is an
is DS (digitalization of goods and services). This excellent asset for any business to flourish. Firms can
transformation is being driven by technological study consumers’ consumption patterns and preferences
advancements that allow organizations to offer and then launch specific programs to engage them.

10
 Marasini Durga Prasad, Seong No Yoon, DonHee Lee

Innovations in ordering and delivery will create loyal B. Value Creation

customers and attract new customers. Domino’s
seamless delivery systems particularly helped them Consumer behavior is continuously changing due
attract new customers during the pandemic. The to new DTs. Customers are shifting to online purchases
restaurant industry can use digital technology-driven and contactless services and increasingly rely on digital
services to gain a competitive advantage. Firms across touchpoints. Customers can contribute to value creation
several industries can achieve the following opportunities by creating new products, updating existing ones,
through DS. providing last-mile delivery, and assisting other
customers by posting digital product reviews. New
DTs have the potential to become new standards
A. Organizational Transformation for defying old corporate rules.
DS allows businesses to adapt to these changes,
DS usually entails complex organizational transformation draw in clients, automate cost-saving tasks, and enhance
(Tronvoll et al., 2020). DS allows firms to enhance customer satisfaction to boost revenues. The DS
operational efficiency, reduce operating costs, increase process requires digital resources, capabilities, and
resource allocation, generate additional revenue, assess skills related to digital agility and networking, as
the risks of current product or service provision, and well as a flexible organizational structure (Verhoef
provide transparency in support of better decision- et al., 2021).
making (Suppatvech et al., 2019). It also facilitates Therefore, DS firms can apply new services and
new customer interaction and closer integration, technologies quickly and flexibly, increase workflow
maintains long-term business relationships with customers, efficiency, minimize technical errors, improve work
and provides opportunities to develop customized quality and performance, increase beneficiary satisfaction,
value propositions (Tronvoll et al., 2020). The increased and increase re-investment ability (Hai et al., 2021).
data availability helps firms improve their operations However, opportunities and challenges are prevalent
and generate new outcome streams. in adopting a DS model for firms.
DTs might potentially lower a firm's costs when
they replace more expensive humans with robots or
virtual agents, streamline logistics streams, and lower C. A Barrier to Business Model Adoption
supply chain expenses through AI and blockchain
(Verhoef et al., 2021). Digital firms have dominated Digital services frequently replace (or cannibalize)
numerous industries and ranked high among the most traditional products, making business model adoption
valuable (Apple, Microsoft, Amazon, Facebook, etc.). difficult. When digital services are established, the
Manufacturers can improve their understanding of marginal cost of producing new products is almost
their customers through the application of IoT nil, which reduces users' views of the value of the
technology by increasing the visibility of their activities offering (Vendrell-Herrero et al., 2017). The old
in customer-specific settings. All manufacturers who industrial, cultural paradigm is being tested by DS,
are having trouble growing their service businesses which impacts how value is shared, generated, and
due to the difficulties in tracking product usage retained (Coreynen et al., 2017; Ehret and Wirtz, 2017).
conditions and associated data can benefit from the
IoT (Paiola and Gebauer, 2020). It is crucial in
enabling service-oriented business models. D. Difficulty in Coordination

As coordination is a process that links various

activities within an organization as well as among

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GLOBAL BUSINESS & FINANCE REVIEW, Volume. 27 Issue. 5 (OCTOBER 2022), 1-16

stakeholders, it can be difficult to coordinate with V. Conclusion and limitations

each other. However, a well-designed DS requires
close collaboration with different stakeholders, new
approaches to customer interaction, high investments The introduction of new technologies causes changes
in technology, data management skills, and innovative in products, processes, and organizational factors.
offerings aligned with customer needs (Pialo and They influence businesses’ operations, open new
Gebaur, 2020). business prospects, and collaborate across industries
(Feroz et al., 2021). A sector with considerable
potential for advancement in digital technologies is
E. High Investment hospitality and restaurant services, which is varied,
fiercely competitive, and one of the fastest-growing
Organizations may need to invest a lot of money service industries (Verevka, 2019). Firms must take
in technology to implement DS, which is not feasible initiatives such as changes in employee structure,
for all businesses. Firms must consider cultural engagement of internal and external stakeholders,
changes as employees and organizational leaders cultivation of agile methods of working, the establishment
adjust to adopt and rely on new technologies. Leaders of digital service centers, focus on customer value,
must change their minds and perceptions about the and development of new business models to incorporate
importance of DTs and actively strive to incorporate DS (Tronvoll et al., 2020).
these technologies into their business. Businesses Different businesses have different DS processes,
need to hire workers more receptive to new technology, some moving through these several stages gradually
such as statisticians and business analysts who can while others do so in steps. In the case of Domino's,
function in a digital setting. establishing a sizable, powerful IT division that works
in tandem with marketing counterparts to draw in both
potential and current customers was essential to the
F. Security and Privacy company's digital transformation and servitization.
Product innovation, technological innovation, customization,
Concern about data security and privacy is a and commercialization were the four strategies adopted
significant challenge that firms must overcome to by Domino’s to expand its business. Domino’s has
operate their business in this competitive market. provided quality customer service and created value
Hackers target firms that collect a large amount of through these strategies. Other firms can use such
personal information. As personal data is important, strategies to reform their business models, reach more
firms must create secure systems to ensure the safety customers, and make value and profit. DS aims to
of customer information. Effective DS strategies will provide a service-oriented business structure that
help firms gain competitive advantages and propel offers new services to address companies' challenges,
themselves in this harsh business environment. help deliver financial benefits, and improve future
However, they must also prepare for these challenges. digitalization activities. Businesses are poised to
Leaders must have a specific plan and recruit a skilled prosper by providing services focused on optimizing
workforce to adapt to the digital working environment. the customer experience, but they must be ready to
face the challenges encountered when adopting a
DS model.
This study proposed a DS model based on a case
study. This study provided insights into how an integrated
version of DS helps firms operate successfully. Thus,
the results of the case study provide the following

12
 Marasini Durga Prasad, Seong No Yoon, DonHee Lee

academic values and practical implications. For of Manufacturing Technology Management, 20(5), 547-
567.
academic implications, first, the academic scope was
Barrett, M., Davidson, E., Prabhu, J., & Vargo, S. L. (2015).
expanded by presenting digital servitization by the
Service innovation in the digital age: Key contributions
existing cases of DT and DS. Second, the opportunity and future directions. MIS Quarterly, 39(1), 135-154.
factors (Organizational transformation, Value creation) Bogdandy, B., Tamas, J., & Toth, Z. (2020). Digital transformation
proposed through DS in this study can be used for in education during COVID-19: A case study. 11th IEEE
International Conference on Cognitive Infocommunications
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challenges (A barrier to business model adoption, Branca, T. A., Fornai, B., Colla, V., Murri, M. M., Streppa,
Difficulty in coordination, High investment, and Security E., & Schröder, A. J. (2020). The challenge of digitalization
in the steel sector. Metals, 10(2), 288-311.
and privacy) for DS model implementation will help
Buvat, J., Kvj, S., & Sumit, C. (2017). Domino’s pizza:
firms to be prepared beforehand. For practical values, Writing the recipe for digital mastery. Cap Gemini
first, the results of this study can help firms develop Consulting Digital Master Series, Paris.
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dynamic resource configurations for manufacturers.
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firms can formulate their strategies depending on Coreynen, W., Matthyssens, P., Vanderstraeten, J., & van
the service type and purpose. Witteloostuijn, A. (2020). Unravelling the internal and
external drivers of digital servitization: A dynamic
This case study has several limitations. We selected
capabilities and contingency perspective on firm strategy.
Domino’s operation in the three countries to study Industrial Marketing Management, 89, 265-277.
its characteristics. Additional characteristics would Dahmani, S., Boucher, X., Gourc, D., Peillon, S., & Marmier,
have emerged if other countries had been chosen. F. (2020). Integrated approach for risk management in
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