Project of Pizza Hut Term Paper

Pages: 11 (3449 words)  ·  Style: Harvard  ·  Bibliography Sources: 18  ·  File: .docx  ·  Topic: Business

Pizza Hut

Company Presentation

The fast food industry is very well represented by a few major companies, Pizza Hut being one of them the company was founded in 1958 in Wichita, Kansas, although its current headquarters is in Addison, Texas. The restaurant is generally specialized in American-style pizza, but the menu varies from one location to another, including buffalo wings, breadsticks, or garlic bread (Wikipedia, 2007).

The restaurant chain is present in approximately 100 countries, including: Andorra, Bangladesh, Bulgaria, China, Egypt, Germany, Greece, India, Israel, Japan, Luxembourg, Malaysia, Mexico, Netherlands, Pakistan, Philippines, Romania, Russia, Serbia, Singapore, Spain, Sri Lanka, UK and Ireland. This expanded geographical coverage led to the existence of no less than 34,000 restaurants, delivery-carry out units, and kiosks.

Pizza Hut was nationally acknowledged in 1970, when the company was listed on the New York Stock Exchange. In 1997, the company took a new direction, by being acquired by Pepsico, along with KFC and Taco Bell. In 2002, these three restaurants, along with Long John Silver's and a&W Restaurants have been taken under YUM!Brands.

Pizza Hut products

Pizza Hut understands that for gaining more and more customers and for keeping them, the company must address to all tastes, it must satisfy everyone. As a consequence, Pizza Hut is continuously improving its menu. One of the company's strengths is the variety of the menu and the ability to address all tastes. Generally, the company's products are:

Specialty pizza

Pizza toppings

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Appetizers

Sauces

Wingstreet wings

Wingstreet sides and dips

Desserts

Drinks

Bistro menu

Obviously, the company's core product is the specialty pizza that comes in various forms, namely:

Cheese lover's pizza - for those who prefer the two fresh toppings smothered in cheese in consistent amounts

Meat lover's pizza - consisting six kinds of meat: pepperoni, Italian sausage, ham, bacon, beef, and pork toppings

Term Paper on Project of Pizza Hut Assignment

Pepperoni lover's pizza - the double layers of pepperoni and cheese will please customers enjoying their pizza with both cheese and spicy ingredients

Veggie lover' pizza - consisted of fresh mushrooms, red onions, green peppers, tomatoes, and black olives, especially designed for vegetarian tastes

Supreme pizza - created after a Pizza Hut special recipe, mixing pepperoni, beef and pork toppings, green peppers, red onions, and mushrooms (Pizza Hut, 2007).

The crusts sector is also extremely various at Pizza Hut, for example:

Hand-tossed style pizza - this type of pizza is slightly different from the American-style pizza that Pizza Hut usually offers, and more similar to Italian-style pizza. This way, Pizza Hut succeeds at combining the original, traditional, Italian pizza with the modern, adapted, American one.

Pan pizza - it is considered to be customers' favorite type of pizza

Personal pan pizza - the same as the above, only in a smaller variant

Stuffed crust pizza - more unusual than other types of pizza due to its distinguished preparation manner

Thin 'n crispy pizza - for those who prefer crispier crust

The full-house XL pizza - a portion of golden brown perfection, as the company's chefs describe it

Pizza toppings match the diversity of the products mentioned above:

Meat - anchovies, bacon, beef topping, chicken, ham, Italian sausage, pepperoni, pork topping

Vegetables and fruit - banana peppers, black olives, green olives, green peppers, jalapenos, mushrooms, pineapple, red onion, tomatoes

Pizza Hut offers a few appetizers also, like: Quepapas Potato Bites, breadsticks, and cheese sticks.

Wingstreet Wings come in different forms, like: Buffalo Burnin' Hot, Buffalo Medium, Buffalo Mild, Honey BBQ, Garlic Parmesan, Spicy BBQ, Cajun, and Spicy Asian.

Wingstreet Sides and dips include: Taters, Fried Cheese Sticks, apple pies.

Pizza Hut's desserts menu does not match the diversity of the menus presented above, including only baked cinnamon sticks. Drinks at Pizza Hut include mostly sodas.

The bistro menu I quite diversified also, including:

Broccoli Cheddar Soup

Bistro Chicken Alfredo Bake

Spaghetti Meat Sauce

Steak and Cheese Hoagie

Roasted Turkey and Provolone Sandwich

Black Forest Ham and Cheese Sandwich

As mentioned above, customers' favorite Pizza Hut product is the Pan Pizza, especially the small sized one. The variety of toppings and the crust thicker than in other types of pizza have determined customers to choose this type of pizza. After the Pan Pizza, customers' favorite products are: Stuffed Crust Pizza, Hand-Tossed Pizza, Thin 'n Crispy Pizza, or Bigfoot Pizza.

Pizza Hut is continuously expanding its product range, creating completely new products are importing Italian recipes and adapting them to local preferences. However, not all of Pizza Hut's experiments have been a success. Some of them turned into complete failures, like: Chicago Dish Pizza, Sicilian Pizza, P'zone, or Cheesy Bites.

As mentioned above, the Pizza Hut menu is very complex and diversified. The Pizza Hut product strategy is based entirely on diversification, in order to satisfy as many customer tastes as possible. Also, the company's product range is not stagnating. Pizza Hut is continuously expanding its product range, by experiencing all sorts of new dishes. There are two directions that Pizza Hut specialists follow when developing new products:

One variant consists in developing American products, based on what customers have been used to so far

The other variant consists in importing Italian-based products and adapting them to the American way, combining the two gastronomic cultures

Also, Pizza Hut is not focusing its menu on pizza related products, but offers a series of salads and other bistro menus. However, the menu varies from one country to another. The American menu is the most diversified and complex one. Other countries focus only on pizzas and a few types of salads, depending on each country's specifics.

Pizza Hut value drivers

One of the main factors that confer competitive advantage to Pizza Hut is the diversity of the company's products. The wide range of products presented above and the continuous product development at Pizza Hut come to support this statement. Pizza Hut restaurants probably have the most diversified menus in the world. The company is trying to cover all of customers' tastes and preferences.

Another factor that grants competitive advantage to Pizza Hut is integrity, which is considered to be the company's core value, as "one of the most important values within the Pizza Hut culture is integrity. Our people are committed to providing uncompromised quality and to providing service that is personal. In fact, our people strive each day to provide what we call customer mania. We want to give the kind of service that will make our customers tell stories to their family and friends about Pizza Hut" (Pizza Hut, 2007).

Another strong point of Pizza Hut deriving from its integrity is quality of products. The company's tradition, development, and integrity have led to a genuinely acknowledged quality of products that the company proves in everything it provides. The company's success worldwide proves this.

Pizza Hut business model analysis

The Pizza Hut business model cannot be defined as a single, distinguished model, as it seems to be a combination of several models. Basically, "a business model is a conceptual tool that contains a big set of elements and their relationships and allows expressing the business logic of a specific firm. It is a description of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams" (Osterwalder, Pigneur, & Tucci, 2005).

Before analyzing the company's business model, I is recommended to perform a SWOT analysis. The SWOT analysis for Pizza Hut is presented bellow:

Strengths:

Respected tradition

Long history on the market

Wide range of products

Continuous product development

Good geographical coverage

Strong position on the market

Integrity

Quality of products

The company offers an equitable price-product balance

Worldwide presence

Weaknesses:

Some of the company's employees are not qualified enough

Defective human resources strategies, because of high turnover

Opportunities:

New markets expanding worldwide

Increasing number of franchisees

Threats:

Competition: Pizza Hut is facing strong competitors on the fast food market, like Domino's

Increased employee turnover: for hourly employees: 160% per year, for assistant managers: 40%, for unit managers: 19% (Middaugh & Saladin)

When analyzing a company's business model, one must address the following factors: value propositions, target customer segments, distribution channels, customer relationships, core capabilities, partner network, cost structure, and revenue model. These issues are discussed bellow.

Value propositions:

As discussed above, Pizza Hut's core value is integrity. The company cares a great deal about this issue, as it has proven, and customers seem to appreciate it. Another value, which derives from integrity, is the quality of Pizza Hut products. The long experience in the fast food industry has taught Pizza Hut managers that without quality products, a company cannot survive on the market for a long-term. As a consequence, the company is treating its existing and potential customers with respect, by providing good quality products and an equitable price-product balance. Customers have proven to appreciate this strategy, since Pizza Hut has the longest restaurants chain worldwide.

Target customer segments:

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