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SWOT analysis Essay Pizza Hut, the most popular and prominent brand in the fast food industry is the largest chain food shop in the world. Starting from 1958, it has emerged as the market leader of the industry. The franchise has its own Strengths, weaknesses, opportunities and threats but it is clearly enjoying competitive advantages over its competitors. The franchise has a strong marketing tool, large market share and a group of loyal customers. Based on these, if the company goes for a better and stronger marketing approach in the future, they will keep enjoying the edge over its competitors in the future as well. Marketing Plan for Pizza Hut (Part 1). Pizza Hut is the world’s biggest restaurant company and international franchise which has the origin in Texas, America. It has almost 34,000 restaurants across the world and is currently operating in 100 countries. Pizza Hut offers different types of pizza along with some other dishes like pasta, buffalo wings, breadsticks, and garlic bread. It has started its journey back in 1958 by brothers Dan and Frank Carney in their hometown, Kansas. Since then it has emerged as one of the most popular restaurants not only in America but also in the entire world. (Pizza Hut Corporation, 2012) Internal Environment. The mission statement of Pizza Hut is: â€Å"We take pride in making a perfect pizza and providing courteous and helpful service on time all the time. Every customer says, Ill be back! We are the employer of choice offering team members opportunities for growth, advancement, and rewarding careers in a fun, safe working environment. We are accountable for profitability in everything we do, providing our shareholders with value growth. † (Pizza Hut Website, Hawaii) So from the mission statement it is clear that the franchise wants to serve pizza of great taste and wants to retain its customer so that everybody gets the ultimate joy. They also want to be accountable to its shareholders along with quality team members and workplace. Over the years, Pizza Hut is working hard to establish the above goals and objectives through their dedication, sincerity and honest team members. That’s the reason today Pizza Hut has become the worldwide leader and a trustworthy name among the food lovers. Though today’s world is fast and mechanical people are still looking for the better quality of the food, service and also great taste. As a result, the goals and objectives of Pizza Hut is still very much correct with the peoples perspective. The present performance of Pizza Hut is very admirable as it has captured the largest market share in the industry and also has a loyal customer base. Because of their effective promotion, pricing. Food quality, distribution channel and most importantly unparallel taste, Pizza Hut has achieved a great success in the industry. The recent sale volume of Pizza Hut is also noticeable. In the year 2011, Pizza Hut had a turnover of $5. 5 billion (Financial Statement, Pizza Hut, 2012) where Dominos Pizza had $530. 6 million. (Financial Statement, Dominos Pizza, 2012) So, Pizza Hut is enjoying the edge over its competitors. Though the trend of the industry is downward because of the socioeconomic crisis hasn’t recovered still. The overall performance of the firm hasn’t declined much (only in 2007 it had a turnover of $6 billion) (Financial Statement, Pizza Hut, 2012). And the little decline is the result of the recession of 2008 as discussed earlier. In spite of those little drawbacks, Pizza Hut is trying their best to keep the pace with their mission statement and if they are unable to do that just because of external facts they will meet up with that with their honesty, service quality etc. Customer Environment. In a nutshell, everybody around the world is the potential customer of Pizza Hut. As people of all ages like foods like pizzas, they can enjoy the ultimate and different taste of Pizza Hut. The current customers of Pizza Hut have great variety. As they provide a wide range of pizzas, people from different ages can enjoy their foods. People of young age have a great attraction towards the Pizza Hut and they are a great portion of customers for Pizza Hut. In the process a few other players can be added as the young people may take money from their parents and can be influenced by their friends. The product is used only in one way and that is for eating. The great taste of the pizzas can amaze everybody and they can be the admirers of that. Customers can buy pizzas directly from the outlets and can hang around there. They can even order the food online and home delivery will be available. In the festival time with some special offers the consumption may be increased and customers may be attracted to consume more to get benefits. Because of taste, quality and service, the purchasers of Pizza Hut purchase the foods of Pizza Hut. There are other players in the market and they have a loyal customer base as well though that is not as significant as Pizza Hut. As a result, Pizza Hut are not getting those customers and they aren’t buying the pizzas of Pizza Hut. External Environment The competitors are quite a lot in the market for Pizza Hut. Some big names like McDonalds, Dominos Pizza etc. are strong contenders for taking away the crown from Pizza Hut. As it discussed earlier, Dominos pizza isn’t far away from Pizza Hut in sales volume and trying hard to get there. McDonalds also with their innovative products are looking to do the same. As it told, the recession of 2008 made a strong impact on the Pizza Hut as well as on the industry. It has experienced downward pressure in the sales volume. So, if the economy gets stabilized, the performance of the industry as well as Pizza hut is expected to be improved. Computerization is a must for the current world. Pizza Hut is computerized and centralized. As a result, the customers are enjoying digitized facilities like online ordering, home delivery etc. The sociocultural situation of the target customers are also very important factor which is needed to be considered. The target customers’ demography, economic and social condition all these things make impact on Pizza Hut as they are expanded their businesses in almost every corner of the globe. So, before going to open an outlet, they need to consider those factors and their probable profitability from that. The profitability shouldn’t be only factor for Pizza Hut. They must consider their ethical and social responsibility towards people and they have a close eye on those as well. They try to ensure the best quality and service of their food s before presenting them to their customers which made them unique in the industry. SWOT Analysis The SWOT analysis of Pizza Hut is like below: Strengths †¢ Largest chain restaurant of the world (Griffiths, 2009) 1. As the restaurant spreads in many countries of the world, it can reach a significant number of people in the entire world. As a result, the franchise can serve their products to many nationalities and because of that they have become e trustworthy name among the customers. People of the different parts of the world have different tastes and preferences. Pizza Hut by having so many outlets in different countries is doing that purpose quite successfully. 2. Pizza Hut enjoys the most branches around the globe (100) which the competitors of Pizza Hut aren’t able to do. As a result, the other restaurants can’t reach to people like Pizza Hut does which clearly makes a difference between Pizza Hut and its competitors and Pizza Hut is having the edge. †¢ Has large varieties and types of pizzas and known for its innovative range of pizzas under one roof (Free SWOT Analysis, 2010) 1. Because of having range of pizzas, Pizza Hut has become successful to meet up with the demands of various customers. Even the people from different countries are enjoying the different tastes of pizzas from Pizza Hut. So, the innovations from Pizza Hut are helping the franchise to be more reliable and popular to its customers across the world. 2. The other competitors like Dominos Pizza can’t offer such a variety of pizzas to its customers. As a result, they are lagging behind Pizza Hut on this regard. †¢ Strong marketing tools (Griffiths, 2009) 1. Pizza Hut has many media partners and uses television as a very strong advertising tool. That’s why their advertisements in television become so popular and has a strong impact on the people from the various parts of the world as Pizza Hut keeps the regional differences on their mind. 2. As Pizza Hut uses better marketing and advertisement tools than its competitors, the other companies of same type aren’t matching with Pizza Hut in the same way. †¢ Large market share and loyal customer base (Free SWOT Analysis, 2010) 1. As the market leader Pizza Hut enjoys the most of the profit of the industry and loyal customers encourage them to increase the number of their outlets in the 100 countries they are operating. 2. The competitors are not having as large market share as Pizza Hut has. So, they are lagging in regard of profit. They don’t have as large loyal customers as Pizza Hut as well. Weaknesses †¢ Loyal customers are feeling that the satisfactory level of the pizzas are not like before and it is in the declining process as other franchises are offering something better than that of Pizza Hut (Free SWOT Analysis, 2010) 1. If the trend of the above feeling among the loyal customers continue then the large market share that Pizza Hut is enjoying at present, will be reduced at some point which will lead the loss of market leadership for them. 2. The other players of the industry are coming strongly with new innovative ideas so that they can satisfy the customers in a better way than Pizza Hut which is be the minus point for Pizza Hut. †¢ Internal conflicts within the company regarding the computerization and centralization of processes (Free SWOT Analysis, 2010) 1. Whatever happens the customers seek the ultimate satisfaction and service from a company but because of this problem, they are not getting the desired services they expect from Pizza Hut. This will lead a bad spoken of mouth problem for the company. 2. The whole processes in Pizza Hut is centralized and computerized but those are causing internal conflicts among the franchises in different regions but the other organizations are not reported to have any problem like this. So, this problem will have an adverse effect on the image of the Pizza Hut. Opportunities †¢ Introduction of new fresh pizzas with innovation (The World’s Largest Online Library, 2009) 1. People are now more health conscious than ever. So, introducing the fresh pizzas will be great idea for attracting new customers and to meet their needs. Besides that, innovative pizzas like new flavors and sizes may create appeal to the customers especially to the young customers. 2. The needed time for innovation can be long as there is no time bindings for that but the fresh pizzas can be introduced immediately as it won’t take a lot of time. †¢ Opening new branches in the regions where the demand is increasing (Free SWOT Analysis, 2010) 1. Young generation in the countries like India, Bangladesh and Pakistan is probably the one big opportunity for Pizza Hut to explore. As the popularity of Pizza and other fast foods among these people is increasing day by day, Pizza Hut can use that for their market expansion. 2. As Pizza Hut already having outlets in those countries, the new branch opening won’t take too much time and will increase the profit for the company Threats †¢ Increasing cost of cheese (Griffiths, 2009). 1. The cost increase of cheese will increase of the price of the pizzas. As Pizza Hut tries to give the best taste of pizzas to its customers, it will face problems in doing that. As a result, attracting new customers and retaining the existing customers will be a big challenge for them. 2. As the price is increasing in a slow manner, at present Pizza Hut may not face the problem but in the long run with the increase of price of pizzas, they will feel the pressure. †¢ Threat from other companies and also from the local brands (Free SWOT Analysis, 2010) 1. McDonald already introduced McPizza and Dominos Pizza becoming more and more competitive. So, the competition is getting tougher and tougher day by day. So, customers who seek variety may tend to shift from Pizza Hut and in the process Pizza Hut may loss a significant portion of the existing customers. Also some local brands are trying to provide pizzas of different tastes to the customers in different countries which are alarming for Pizza Hut. 2. The threat of losing customers because of the above reason may arise very quickly. So, Pizza Hut should be aware of the fact. SWOT Matrix. |Strengths: |Opportunities: | | | | |Largest chain restaurant of the world |Loyal customers feel that the satisfactory level of the pizzas | |Large varieties and types of pizzas and known for its innovative |declining | |range of pizzas under one roof |Internal conflicts within the company | |Strong marketing tools | | |Large market share and loyal customer base | | | | | | | | |Weaknesses: |Threats: | | | | |Introduction of new fresh pizzas with innovation |Increasing cost of cheese | |Opening new branches |Threat from other companies | | | | Developing Competitive Advantages. From the SWOT analysis, it is quite clear that in spite of having some weaknesses, Pizza Hut is clearly enjoying some competitive advantages over its competitors. The three stronger points are discussed in the next section: Largest chain restaurant of the world As the restaurant spreads in many countries of the world, it can reach a significant number of people in the entire world. People of the different parts of the world have different tastes and preferences. Pizza Hut by having so many outlets in different countries is doing that purpose quite successfully. Strong marketing tools. Pizza Hut has many media partners and uses television as a very strong advertising tool. That’s why their advertisements in television become so popular and has a strong impact on the people from the various parts of the world. Large market share and loyal customer base As the market leader Pizza Hut enjoys the most of the profit of the industry and loyal customers encourage them to increase the number of their outlets in the 100 countries they are operating. Developing a Strategic Focus Focusing on marketing Among the three competitive advantages, Pizza Hut has the most prominent opportunity to develop a strategic focus on marketing. As the advertising tool of Pizza Hut is very strong they should focus more on this sector. As countries like India, Pakistan and Bangladesh are probable opportunities for Pizza Hut and they are looking to expand their business in these countries, a strong advertisement in the television and other media can be very fruitful for Pizza Hut. (Your file library, 2010). References Free SWOT Analysis. (2010, June 02). Free Online Providerof Quality SWOT Analysis. Retrieved January 20, 2013, from Free SWOT Analysis website: http://www. freeswotanalysis. com Griffiths, M. (2009, December 23). Documents Resources for Small Businesse Professionals. Retrieved January 20, 2013, from Docstoc website: http://www. docstoc. com Pizza Hut Corporation. (2012). About Us: Pizza Hut. Retrieved January 20, 2013, from Piza Hut Web site: http://www. pizzahut. co. uk The World’s Largest Online Library. (2009, March 03). Retrieved January 20, 2013, from Scribd website: http://www. scribd. com Your file library. (2010, May 21). Retrieved January 20, 2013, from Fliiby: http://fliiby. com Pizza Hut Website, Hawaii http://www. pizzahuthawaii. com Financial Statement, Pizza Hut, 2012 http://www. yum. com Financial Statement, Dominos Pizza, 2012 http://www. ft. com.