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Counter-intuitively, Domino's deliberately opens new stores close to existing ones. While this risks cannibalization, the primary goal is to shorten delivery distances. This improves the customer experience with hotter, faster pizzas, which is a key competitive advantage in the delivery market.
Deliverect expanded globally at a breakneck pace, opening 10 offices in one quarter. This "land grab" strategy ensured they competed for early adopters everywhere at once, preventing local competitors from establishing a stronghold before they arrived.
Despite paying fees to delivery aggregators, Domino's EBITDA margins have climbed. This is primarily due to a strategic shift away from lower-margin corporate-owned stores toward the higher-margin franchise royalty model, alongside benefits from supply chain scale and operating leverage.
While competitors burned cash fighting over major hubs, delivery startup Fancy focused on Tier 2 cities. This strategy gave them a local monopoly, leading to far better unit economics and retention. This strong performance was a key factor in their acquisition by GoPuff.
Domino's leverages delivery aggregators like Uber Eats as a marketing channel to acquire customers. However, it fulfills these orders using its own drivers. This hybrid model captures the apps' network effects while maintaining full control over the crucial customer experience and delivery quality.
While competitors focused on dense urban centers, DoorDash built its foundation by defying industry wisdom and serving the suburbs. This contrarian strategy proved suburban delivery was a massive, untapped market, allowing DoorDash to build scale before entering highly contested cities.
Instead of opening franchises in distant locations, a new franchisor should first build 5-10 locations within a few hours' drive. This strategy, used by successful franchises like Orangetheory, allows for better oversight, support, and testing of the model before a national rollout.
Instead of costly real estate analysis, piggyback on the research of market leaders. Companies like Burger King leverage the extensive work of competitors like McDonald's by opening locations nearby, effectively outsourcing site selection for free.
Pizza chains historically dominated food delivery because they had their own drivers. The rise of apps like DoorDash and Uber Eats has given every restaurant access to a delivery fleet, eroding pizza's core moat and contributing to its decline from its peak popularity.
When a Home Depot store became too successful and couldn't handle more volume, the company's solution was to open another one nearby. This self-cannibalization strategy allowed them to capture total market share, ensuring customers bought from a Home Depot, even if it meant stealing from an existing location.
To avoid cannibalizing their core subscription business, Crunch Labs intentionally designed its retail product line to be different and complementary. The in-store products act as an entry point for new customers or an 'additive element' for existing subscribers, ensuring the new channel strengthens the overall ecosystem.