PIZZA HUT : THE
GLOBAL SUCCESS
Submitted on : 20 MAY 2024
Total words 4210
SUBMITTED TO : DR ALI RAZA MANGI
STUDENTS
Sheer Mohammad
Moiz Ali
Mohammad Ali Ghumro
013-20-0129
013-20-0101
013-20-0115
Introduction
Fast food companies have been expanding internationally in recent years. All throughout the
world, the communication gap has closed. Yes, we do live in a globalized world. Globally, the
cultures of many nations differ from one another. The main reasons why businesses alter their
products to meet the requirements of the host nation are the variations in taste. Fast food
consumption has become common in many metropolitan areas due to hectic lifestyles and a lack
of free time. Fast food restaurants now have more motivation to compete and adapt their tactics
thanks to the intense competition. According to IBIS World Stats, there are 536,825 fast food
chains operating worldwide. Globally, a company's culture is a key factor in developing any
strategy for expanding internationally. We will now make the case for the fast-food chain Pizza
Hut, which has locations all over the world. This is widely recognized as the global equivalent of
pizza (RASSIQ AZIZ KABIR, Financial Express). Pizza Hut strives to respect food, the
environment, and people by operating in 155 countries (PIZZA YUMS). Pizza businesses don't
suddenly become prosperous. To get where they want to be, they need to put in a lot of time,
effort, and—you guessed it—effective marketing. Having said that, we'd like to take a moment
to discuss the background, mistakes, and achievements of a specific well-known chain. Pizza Hut
is the largest fast-food company in the world and arguably the most successful pizza maker to
date.
Company/Business Profile
History
In 1958, two brothers joined up with partner John Bender to launch what would later become
Pizza Hut in Wichita, Kansas, after borrowing an expensive $600 from their mother. They used a
fantastic marketing strategy to get people in the door by giving away pizza on the first night.
They started their second location in under six months, and a year later they had six restaurants
under their ownership, which prompted them to start franchising. Pizza Hut's reputation began to
grow in the early 1960s because of its aggressive marketing strategies. The renowned
architectural design didn't truly take off until 1969. And the well-known name? Merely selected
because of the sign's eight-letter limit. Who would have guessed?
Pizza Hut is a fast-food restaurant business based in the United States that serves a variety of
pizza styles in addition to other foods such pasta, salads, Buffalo wings, and garlic breads. Since
it is a YUM subsidy. In the United States, there were over 5,000 Pizza Hut franchises operating
in 5120 locations across 92 countries as of 2012. (Pizza Hut Inc. Franchise Website, accessed
July 26, 2012). Dan and Frank Carney, brothers, opened Pizza Hut in their hometown of Wichita,
Kansas. By 1972, there were 314 locations across the country. Publicly, it joined the New York
Stock Exchange in 1974. It was purchased by PepsiCo in 1978, the same corporation that went
on to purchase KFC and Taco Bell. Pizza Hut offers several options for meals.
(http://en.wikipedia.org/wiki/Pizza_Hut). In 1977, Pizza Hut and PepsiCo amalgamated, forming
a segment of the multinational soft drink and food corporation. In addition to a new $10 million
headquarters office opening in Wichita, sales that year totaled $436 million. PepsiCo had
evidently seen Pizza Hut's potential. People kept going out to eat, particularly as fast-food chains
became more important due to their affordability and ease. Pizza Hut faced new rivals in the
1980s, all vying for its dominant position in the pizza restaurant industry, which at the time was
valued at $15 billion (about $46 per person in the US) in yearly sales in the US alone. While
regional chains like Dallas-based Pizza Inn, Denver-based Shakey's, Phoenix-based Village Inn,
and Straw Hat had been the company's primary rivals in the 1970s, intense competition in the
1980s brought new players to the quick-service pizza market, such as Little Caesars, Domino's
Pizza International, and Pizza Express.
In 1980, Pizza Hut launched "Pan Pizza" across its network to increase brand awareness. Made
in deep pans, the product had a thicker crust that quickly gained popularity. The marketing tools
that PepsiCo supplied helped make the new menu items at Pizza Hut a success.
Failure leads to success
Several adjustments led to a drop in profits in 1994. These shifts included a slowdown in the
expansion of the pizza market, price reductions from competitors, and a rise in outlets that
resulted in a reduction in company resources. To put it mildly, it wasn't the finest time for the
hut—total profits fell by 21 percent. A further casualty of the popularity of dine-in over delivery
was Pizza Hut. At the time, just approximately 10% of Pizza Hut's sales came from dine-in, so
the company needed to concentrate more on what customers needed and desired, which was
takeaway and delivery, according to Restaurant Business. Many dine-in-only establishments
shuttered to address this problem, and express locations started to open. Furthermore, Pizza Hut
began utilizing a blend of inventive technologies, creative marketing efforts, and refreshed
menus and recipes. Sales rose by 3% in 2020 because of these adjustments. Pizza Hut keeps
spending money on cutting-edge technology to make sure they can keep expanding and
changing. To increase productivity and bring their outlets together, they have even introduced an
Omni channel menu management system.
Marketing and product
Pizza Hut has never shied away from experimenting with cutting-edge marketing techniques. In
1965, they debuted their first television ad, "Putt Putt to the Pizza Hut." From 1987 to 1995, they
had the slogan "Makin' it great!"; from 1995 to 1999, "You'll love the stuff we're made of"; from
2007 to 2007, "Gather 'round the good stuff"; from 2008 to 2009, "Now You're Eating!"; and
from 2009 to the present, "Your Favorites." From 2009 to 2012, it was "Your Pizza Hut," and
from 2012 to 2016, it was "Make it great," a play on their 1987 tagline. And the motto for today?
It's probably well-known to you: "No one out pizzas the hut." Pizza Hut has also profited from
advertising, appearing in both TV and movies. They also provided free futuristic eyewear with
every pizza order in 1989 when they supported the film back to the Future Part II. They also
employed product placement, showcasing a futuristic rendition of their emblem in a couple of
the film's sequences.
Another strategy that the "Hut" heavily employs for marketing? Endorsements. Pizza Hut
acquired the rights to rename FC Dallas Stadium, home of the Major League Soccer team, Pizza
Hut Park in 2005. Additionally, they inked sponsorship agreements with a few well-known
organizations in 2015, such as American Airlines, the Dallas Mavericks, and the Dallas Stars.
Pizza Hut is presently the official sponsor of the NCAA and even became the official pizza
sponsor of the NFL in 2018. Three pizza entrepreneurs started one of the largest pizza chains in
history with just $600. What therefore can we take away from Pizza Hut? It's important to
constantly experiment, modify, and enhance your technology and marketing strategies, as you
never know what can work and propel you to prominence. The products are Pasta sandwiches,
Pizza and starter salads. Kids' meals come in separate variations. Kid's Cheese Pizza, Kid's
Spaghetti, Kid's Cheese Sandwich, and Kid's Twisted Chicken Sandwich are these. Soft drinks
like Pepsi and Mirinda, iced tea, sparkling water, and mineral water are among the available
drinks.
A map displaying Pizza Hut's services, clients, and products may be found below
Going Global
Pizza Hut had already branched out outside of America, opening its first location abroad in
Canada as the 1980s got underway. In the years that followed, Pizza Hut opened locations across
Europe, Asia, and other continents, beginning an unprecedented worldwide expansion. They kept
their basic dedication to flavor and quality while customizing their menu and marketing tactics
for each new place to accommodate a variety of cultural tastes. Pizza Hut started franchising in
1959. Pizza Hut was purchased by PepsiCo in 1977, and it subsequently became a subsidiary of
Tricon Global Restaurants, Inc., a new business that on May 22, 2002, changed its name to Yum!
Brands. Taco Bell and KFC are also run by Yum! Brands, the parent business. Pizza Hut began
operations in India in 1996 and experienced the same level of success as in the US. Two
franchises, Sapphire Foods India and Devyani International Limited, both owned by Ravi
Jaipuria, operate Pizza Hut in India. Aside from Pizza Hut, DIL also owns the KFC, Vaango, and
Costa Coffee franchises in Nigeria, Nepal, and India. In terms of the quantity of locations as well
as its market share, the Pizza Hut franchise is thought to be the biggest pizza restaurant business
worldwide. In addition, Pizza Hut is well-known for hiring over 300,000 people and contributing
to charitable causes.
Pizza Hut has been the best place to get mouthwatering pizzas for over 60 years. Pizza Hut offers
a wide range of Italian-American cuisines in addition to pizza, spaghetti, side dishes, and
desserts. Pizza Hut offers a variety of restaurant layouts, such as carry-out and family-friendly
dine-in options. A lunch buffet featuring "all-you-can-eat" salad, breadsticks, pizza, desserts, and
a side pasta station is available at certain locations. Pizza Hut is distinct because of its creative
concepts. They consider the demands of their customers when launching a new pizza flavor,
which helps them grow their business. Pizza Hut currently operates more than 18,000 eateries
and delivery services across more than 100 nations. Pizza Hut has more than 430 locations over
100 cities in India. Additionally, Pizza Hut locations can be found in Korea, China, Italy,
Canada, and Malaysia.
To expand internationally and build its brand, Pizza Hut tailored its food and interior design to
suit the preferences of the local populace. The Pizza Hut restaurant in China is regarded as a
high-end establishment offering a luxurious eating experience, in contrast to the US where it is
associated with comfort and inexpensive meals. Thai, Asian, French, and American cuisines are
combined on the Pizza Hut menu in China. You can also discover a pizza with curry flavoring
here, as Asian food is mostly centered on curries. Like this, Pizza Hut included Indian
ingredients like paneer, pickled ginger, and tandoori chicken in their pizzas to break into the
Indian market. Pizza Hut and innovation go hand in hand because of the company's slogan,
which is to stand out rather than fit in. There are many more factors that set Pizza Hut apart from
its rivals besides pizza's mix of local flavors. One of the first companies to sell food online (since
the 1990s) was Pizza Hut. In addition, Pizza Hut is credited with being the first pizza delivery
company to reach space in 2001.
Closure of Pizza Hut in Pakistan
At a period when globalization was only beginning to spread beyond our borders, Pizza Hut was
the first foreign fast-food brand to open in Pakistan in 1993. Pizza Hut was indeed a pioneer in
Pakistan. In 1997, KFC became the first fast food chain to establish in Pakistan, and McDonald's
followed suit a year later in 1998.
And because they were mostly responsible for creating the demand, Pizza Hut dominated the
Pakistani pizza business for a considerable amount of time. Of course, Pakistan produced a few
pizza pioneers. There were still operating Pappas Allis in Islamabad, and there were a few
neighborhood pizzerias in Karachi. But these were also relatively new, having emerged in the
1980s and 1990s. It is difficult to believe that there was a period in Pakistan when pizza, the
well-known Italian food, was not widely available. Nowadays, every bakery, cafe, and restaurant
in the nation has its own take on the classic Italian dish, and there are numerous chains that
specialize in pizza. That only took place following Pizza Hut's launch. Pizza Hut was the one
who introduced pizza and well-known flavors to Pakistan, catering to the local market.
Additionally, they gained a growing customer base because of being the first "American" brand
to operate in Pakistan. However, competition appeared fast. The establishment of more and more
local franchises and pizzerias was indicative of the rising demand, nevertheless. With iconic
features like an all-you-can-eat salad bar and their renowned Ramzan bargains, Pizza Hut's
popularity never wavered, and it was undoubtedly the leader in the pizza food industry. Next was
Dominos.
Entry of dominos
Dominos had a difficult time getting established in Pakistan when they entered the country in
2004 and opened their first franchise there in 2009. This was mostly due to Pizza Hut's two and a
half decades of market dominance. A master franchise deal with "Hilal Confectionery" allowed
Domino's International to enter Pakistan in 2009, per a case study written by associate professor
Naveed M. Khan of Bahia University. Naturally, there was a lot of excitement when Dominos
initially joined the market. There was a lot of interest in them because they were a well-known
international brand that had also had significant success in the Indian market. During the initial
four years, Domino's Pizza generated approximately Rs. 2 million in monthly sales from 13
locations in Pakistan; nevertheless, its operational losses were approximately 33%.
Pizza Hut was enormous. It was incredibly costly to open 13 stores and then provide attractive
incentives to attract new customers. And what about Dominos? They quickly sank and
floundered, stealing one of Pizza Hut's top workers.
A dip in quality and an inside job
Since April 2005, Muhammad Ahsan Ahmed has worked at Pizza Hut. After serving as their
head of business development initially, he rose to the position of general manager of business
operations and human resources. He was employed by Dominos as its CEO in 2012. Mohammad
Ahsan was able to reduce losses and make the business profitable quickly. After successfully
reducing costs in the initial stage of the business's reorganization, he moved on to significantly
boost revenues and add value.
"There were three stages to my work at Dominos, for those who are curious. Assisting the
business to achieve illusive operational profitability was phase one. According to his LinkedIn
page, "Phase three involved helping the company grow by as much as 70%, and Phase two
involved attaining the first Positive P L month in over nine years.
Ahsan had a front-row seat to all of Pizza Hut's business development plans as leader of the
department. With his commercial acumen, he was able to make a difference at Dominoes. Before
going on to Dominos KSA, he worked at Dominos from 2012 to 2015. But in the ten years
following his takeover, Dominos expanded to 62 locations in Pakistan and threatened Pizza Hut.
But Dominos' success did not come about overnight because of Ahsan's departure. Karachi also
saw the opening of Burger King's first location in 2013. Retired and well-off from their Pizza
Hut operation, MCR made the strategic decision to introduce Burger King Franchises to Pakistan
as well. And they created quite a stir by doing this, simultaneously launching three branches in
Karachi. But the reaction was hushed. And funding and focus began to shift to Burger King,
which in Pakistan simply refused to succeed in the face of McDonald's.
The family that owned the Pizza Hut franchises was also going through a change at the same
time. Pizza quality started to decline, and the second generation appeared less eager to get their
hands dirty in the day-to-day operations of managing a big chain of franchisees. This coincided
nicely with Domino's comeback, and Domino's seized the opportunity as Pizza Hut's market
share declined. Better and more recent local pizza chains also started to open at the same time.
Pizzas other than deep pan gained popularity as the Pakistani market's taste for the dish rose, and
the market expanded considerably.
Pizza Hut tries to clap back
While this was going on, additional franchises started up. Papa Johns, Broadway, NY 21, and
California Pizza are just a handful of the recent market arrivals. Pizza Hut had to start over since
their market share had decreased. In 2017, Pizza Hut declared that it would invest approximately
$3 million over the following five years, in collaboration with a local partner, to open 75
additional franchise locations.
Yum! Brands, the Fortune 500 business that owns Pizza Hut, and MCR signed a new franchise
agreement during a ceremony held at the US Consulate in Karachi. The purpose of the agreement
was to increase Pizza Hut's footprint in Pakistan and grow its network of 75 locations over time.
Aqueel Hasan, President of MCR, stated that Pakistan stands to gain much from the arrangement
and that the government may expect to invest an average of $3.4 million in just this deal alone.
The new franchise arrangement, however, does not appear to have gone as expected. There have
been rumors that Pizza Hut could not be kept up to its global standard by the firm. Maak’s
International management determined that MCR had not adhered to Yum! Brands’ rules.
"At this time, all stores are closed due to problems with the supply chain. The Pizza Hut
atmosphere and supply chain were not priorities for the previous management. It lost market
share during this period, allowing others to overtake it, according to Jafri.
Competitor of Pizza Hut
Dominos
KFC
McDonald’s
Olive Garden
Papa Johns
SWOT analysis for Pizza Hut
Strengths
Brand awareness based on name familiarity
Owing to its massive expansion as a chain since the 1960s and several high-profile sponsorship
agreements in recent years (such as the NFL in 2018), Pizza Hut is a name that most people are
familiar with.
Broad range of products Pizza Hut has a large selection of goods. Some restaurants provide more
than just pizza—they also provide wings, curries, Italian food, and many regional specialties
from across the globe.
Worldwide visibility
Pizza Hut is a well-known and powerful brand in many of the 110 countries (as of 2020) where it
operates locations.
Fantastic service
Customers are typically provided with exceptional service quality by the eateries. Pizza Hut has
experience in all areas of customer service, speedy service, and hygienic food preparation.
Innovation in products
Some of the most adored pizza items on the market are a result of Pizza Hut's history of pizza
advancements. They are constantly developing new goods, many of which pique consumers'
interest enough for them to be tried.
Weaknesses
Eateries that serve food to go
Pizza Hut was founded on dine-in establishments, but as more and more people choose pizza
delivery, these businesses become more expensive to operate. As previously reported, Pizza Hut
has started shuttering hundreds of it dine-in restaurants and will need to decide which ones are
still viable.
Increased costs
Pizza Hut has always claimed to serve superior pizza; therefore, they've never been the most
affordable choice. However, as several new competitors have emerged and Pizza Hut has
stagnated, many consumers have been persuaded to migrate to other pizza restaurants by
cheaper prices and special offers.
Brand recognition
As we've seen, Pizza Hut underwent a disastrous rebranding attempt recently, and it's still
unclear what the current brand stands for and who its primary target market is. They rely on
nostalgia and their original image while also attempting to appeal to younger groups. Pizza Hut
almost looks to be without a distinct focus.
System of franchising
For a very long time, Pizza Hut's franchising business model was very successful. However,
Pizza Hut has demonstrated that it can be a challenge in recent years when it has had to make
changes. If certain franchisees are unwilling to cut costs or add new services, it can be difficult to
convince them to do so.
Opportunities
Improved online and delivery experiences
Although Pizza Hut has been making improvements, there is still work to be done. If the firm
wants to increase sales, they must not only seize the opportunity to improve their online ordering
and delivery game, but also make this improvement.
Additional delivery locations
Pizza Hut should create and grow more pizza delivery locations—which are far
less expensive to maintain—instead of dining establishments. They have been
concentrating on that for the past few years.
Fresh markets
Pizza Hut still has unexplored markets. They are not yet present in certain
developing Asian nations. Numerous suburbs were found to be unsuitable for their
intended demographic. By providing delivery, they may reach these locations.
Unambiguous messaging
Pizza Hut made a grave error in 2014 when they rebranded, failing to highlight that they are now
a major participant in delivery services. Establishing a more distinct brand identity should start
with emphasizing what and to whom they are offering it.
THREATS
Stern rivalry
Even though Domino's surpassed Pizza Hut to become the leading pizza chain worldwide in
2018, several new competitors are vying for their piece of the industry. The barrier to entrance
has decreased as delivery grows in popularity, allowing new participants to engage the pizza
games.
Rising expenses
Due to the recent increases in the cost of food and pizza ingredients, Pizza Hut will either need to
raise their prices and risk losing some consumers or reduce their margins and risk losing some
money.
Awareness of health
Pizza isn't exactly renowned as a healthy food, and people are growing more and more concerned
about health. Although its market share will likely decrease over the coming years, it will
undoubtedly continue to be popular.
Conclusion
Pizza Hut is a firm that defines its industry. It was without a doubt the industry leader for
decades and is regarded by many as the first pizza chain. Its staff rules established the customer
service standard that allowed the business to grow, and its customer-centric strategy redefined
pizza in a variety of ways. Even while Pizza Hut is still unquestionably one of the pizza industry
titans (as demonstrated below), it is currently dealing with some of the most significant
difficulties in its existence, which adds to the intrigue of the company's tale. The company is an
excellent illustration of successful product innovation, but it also shows how crucial it is to
innovate everywhere or run the risk of lagging behind.
REFERENCES
Aziz Kabir, R. (2020). Pizza Hut: The Global Equivalent of Pizza. Financial Express. Retrieved
from https://www.financialexpress.com
Pizza Yums. (2020). Respect for Food, Environment, and People. Retrieved from
https://www.pizzayums.com
IBIS World. (2020). Fast Food Restaurants - Worldwide Market Research Report. IBIS World
Stats. Retrieved from https://www.ibisworld.com
Pizza Hut Inc. (2012). Franchise Website. Retrieved from
http://en.wikipedia.org/wiki/Pizza_Hut
Yum! Brands. (2020). Pizza Hut Expansion Strategy. Retrieved from https://www.yum.com
Restaurant Business. (2020). Pizza Hut’s Response to Market Shifts. Retrieved from
https://www.restaurantbusinessonline.com
Khan, N. M. (2015). Domino’s Entry into Pakistan: A Case Study. Bahria University.
LinkedIn. (2020). Profile of Muhammad Ahsan Ahmed. Retrieved from
https://www.linkedin.com/in/muhammad-ahsan-ahmed
US Consulate in Karachi. (2017). Pizza Hut Franchise Agreement Ceremony. Retrieved from
https://pk.usembassy.gov
Maak’s International. (2020). Management Decisions on Pizza Hut Operations. Retrieved from
https://www.maaksinternational.com
International Franchise Association. (2020). Master Franchising Strategies for Global
Expansion. Retrieved from https://www.franchise.org
Franchise Wire. (2020). Global Franchise Expansion Tactics. Retrieved from
https://www.franchisewire.com
McDonald’s Corporation. (2020). Global Menu Adaptations. Retrieved from
https://www.mcdonalds.com
Domino’s Pizza Inc. (2020). Regional Menu Offerings. Retrieved from
https://www.dominos.com
-Eleven Inc. (2020). International Expansion and Adaptation. Retrieved from
https://www.7-eleven.com