Member:yintianxiao caozeyu
yaomingdong
Pizzeria Strategic
Analysis
SWOT analysis
opportunities
OPPORTUNITIES
There is a strong untapped market across Pakistan for the introduction of Pizzas.
Consumption pattern is more in Karachi.
“Eating out” is the main source of entertainment in Pakistan.
Pizza Hut has an opportunity to target new segments of class “C” customer base as they are currently
targeting “A” and “B” class customers i.e. income groups of 50,000 & above respectively.
Cost could be reduced by the utilization of local flour.
There is a rising trend of consuming pizza.
threats
Threats
Unstable economic, legal and political environment.
Increase in tax rates, which has a direct impact on the cost of pizza.
High duties on imported ingredients.
Attractive market for new entrants.
Pizza Hut’s main competitor is Pizza Express, who is providing best service to its customers.
Another major directs competitor is Domino Pizza.
strengths
Strengths
Pizza Hut is the pioneer in Pizza business in Pakistan.
Popular brand name.
Pizza Hut follows strict quality control system.
Sales are growing at the rate of 4% annually.
Pizza Hut introduces new menu according to local taste buds and monitor new
trends regularly.
Pizza Hut follows open door policy.
They maintain inventory up to the extent of 60%.
Pizza Hut home delivery service.
weaknesses
Weaknesses
Lack of finances for implementing new strategies.
Shift in Strategic Management.
Flour, which is the main raw material for pizza is imported, which increases the cost of pizza.
Cannibalization of sales by introduction of new branches.
Introduction of I.I. Chundrigar branch was a wrong decision and Pizza Hut has only been able to break even their cost.
Pizza Hut is unable to retain the customer base in Lahore.
External
Evaluation
Matrix:
Factor
(EFE)
The total weighted score of 3.14 indicates that Pizza
Hut is well above average and close to superior
position in its effort to pursue strategies that
capitalize on external opportunities and avoid threats.
Internal Factor Evaluation (IFE)
Matrix:
• The total weighted score of
2.93 indicates that Pizza Hut
is above average in its
overall internal strategic
position.
PIZZA HUT IN PAKISTAN
Pizza Hut came to Pakistan in a way similar to the way it started in the
United States. It was Dan Carney who proposed to Manza Reaz to
bring the chain store to Pakistan. In addition to Clifton's flagship
restaurant, it has three operating units in Karachi and one in Gulberg,
Lahore. It is called "Red Roof" and has 350 seats, which is the largest
in the subcontinent. Clifton Pizza Hut has the highest sales in the
Asia-Pacific region, with a daily turnover of 1,500 pizzas (normal days)
and a weekend turnover of 1,800 to 2,000 pizzas/day.
Facts About Pizza Hut
1.
Pizza Huts worldwide sales were approximately $10 billion.
2.
Pizza Hut service more than 1.5 million pizzas every day to approximately 5 million customers worldwide.
3.
Pizza Hut owns and operates more than half of its restaurant and delivery units making Pizza Hut, inc. the largest
company-owned restaurant chain in the world.
4.
The highest volume Pizza Hut restaurant in the world is in Moscow followed b stores located in France, Hong Kong,
Finland and the U.K.
5.
Outside the US the country with the most Pizza Hut units is Australia (405) followed by Canada (354) and the U.K. (326.
6.
Pizza Hut delivery drivers range in age from 18 to 80 miles, and average 50 miles per driver per day to deliver Pizza Hut
products. The mode of transportation varies from country to country with motor scooters the most common mode in
Western Europe, the U.K. and the Asia Pacific Countries.
7.
Pizza Hut uses 2.5 percent of all the milk produced in the US every year for cheese. That cheese production requires a
herd of 250,000 dairy cows producing at full capacity 365 days a year.
8.
Pizza Hut uses more than 50 million pounds of wheat representing the annual yield from nearly 400,000 acres of wheat.
9.
Pizza Hut uses more than 400 million pounds of tomatoes each year and 50 million pounds of pepperoni.
10. Approximately 50 percent of all Pizza Hut units outside the US are full service restaurant. About 35 to 40 percent are
delivery carry out units, and 10 t0 15 percent are express units or slide “windows”.
Define FP, SP, CP and IP factors of
pizza restaurant.
Financial situation,
FINANCIAL STRENGTH
RATING
Debt to equity ratio is 58:42, which shows its financial strengths
5
EBIT is 8%
4
Pizza Hut’s market share is 55% leading to high sales revenue
6
Liquidity ratio is 1:1 which is the norm in the industry
2
TOTAL
FINANCIAL STRENGTH AVERAGE
17
4.25
Competitive position
COMPETITIVE ADVANTAGE
RATING
Highest market share due to early due to early market penetration
-1
Strict quality control system
-2
Strong customer base and high customer loyalty
-1
Technological edge our competitors
-4
TOTAL
-8
COMPETITIVE ADVANTAGE (-8/4)
-2
Industry position
INDUSTRY STRENGTH
RATING
High growth potential
6
High profit potential
5
Resource utilization is excellent
5
TOTAL
INDUSTRY STRENGTHS AVERAGE (16/3)
16
5.33
Stability position
ENVIRONMENTAL STABILITY
RATING
Dwindling Pakistan economy & high rate of inflation are norms of the industries
-6
Demand is not price sensitive/elastic as far as middle income group is concern.
-1
High entry barriers because Rs 50 to Rs. 55 million is needed for fixed costs and initial operations.
-3
Low demand variability
TOTAL
ENVIRONMENTAL STABILITY (-12/4)
-2
-12
-3
Conclusion ：
In the process of analyzing Pizza Hut, we infer that it is the most
popular international franchise store in Pakistan and has the largest
market share in the pizza industry.
Pizza Hut has no major competitors, and the market opportunities are
very good, full of growth and profits.
Pizza Hut has the opportunity to strengthen its business by adopting
various strategies, such as backward integration and new market
development.
Pizza Hut must strengthen its financial situation by increasing equity
or debt or both, which will improve its internal situation.
In short, we can say that Pizza Hut has a long history in producing
high-quality food, and growth is an indispensable part of its
fundamental strategy.
Thank you for watching,
my speech is over.
Team members:
Cao Zeyu,
Yin Tianxiao,
Yao Mingdong