Oct 20, 2008
PIZZA PAZZA
Jean and François, the two entrepreneurial brothers that own Pizza Pazza, are
planning to expand their family business by addressing a growing market need.
They started their family restaurant Pizza Pazza about ten years ago on the Rue
de Sablon in Fontainebleau, France. Their growing popularity rapidly attracted
competitors, such as Pizza Mimi, who located just next door to Pizza Pazza!
While their restaurant provides a fine dining experience, the two brothers had
been receiving numerous requests for a take-out and delivery service from busy
MBA students. Initially dismayed with suggestions to cater to such utilitarian
approach to food and dining, Jean nevertheless believed that a take-out service
could be a good growth strategy. In addition, they could stick to their high quality reputation by
offering fresh mouth-watering specialty pizzas. Jean was convinced that endless custom variety, fresh
on-demand baking and impeccable service could provide a viable niche position that could compete
against better-known international companies like Pizza Hut.
The brothers agreed that they should give it a try. Given that the current dining-in facility was
running close to capacity, a new facility was needed. François was to remain responsible for the
restaurant while Jean was taking the lead on establishing the take-out service. He rapidly found an
empty facility in neighboring Avon. Not only was this close to their main market––Avon is about
2km from Fontainebleau––rents were also lower there. The new facility also allowed Jean to redesign
their pizza production process and decide on many operational variables that would determine the
profitability of the take-out business.
A pizza is a typically circular dish made of a flour base topped with additions of your choice,
including anchovies, pepperoni, peppers, ham, tomatoes, or pineapple, baked and served piping hot!
There is some debate on where pizza originated. It appears that what we know as pizza came into
vogue around the time of Napoleon and the French revolution. Several historians, however, have
written about the pizza passion of Italian king Ferdinando V long before Napoleon and there is
mentioning of a pizzeria in Napoli in 1780. There also is some evidence that pizza originated in
Greece. Whatever the origin, it were Italians, known to be lovers of fine food and wines, who
perfected and imported this terrific dish to America. From there it quickly endeared itself to mass
production and re-export to the rest of the world.
The Process for making a gourmet pizza follows a simple recipe. First mix together the pizza
sauce of: 2 cans tomato sauce, 1 lb. minced pre-cooked beef, 1 chopped onion, and 1-teaspoon salt.
Put that aside, then mix the pizza dough: 1 cup of warm water, 1 tablespoon of baking yeast, 1
tablespoon of vegetable oil, 1 teaspoon salt, and 2 cups of whole wheat flour. Now beat that dough
until it is nice and elastic, then add more flour until it is a little stiff and knead it
out onto a round shallow butter greased pan, rolling up the edges to about half an
inch. Next, spread the sauce you made in the beginning and the toppings,
including the cheese, specified by the customer generously across the surface.
Professor J.A. Van Mieghem prepared this case as a basis for class discussion rather than to illustrate either the factual,
effective or ineffective handling of a managerial situation. The case is inspired by Kristen’s Cookie Company, written by
Roger Bohn.
Copyright  2004, 2008 by J.A. Van Mieghem. For reproductions, email VanMieghem@kellogg.northwestern.edu.
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Now put the pizza into an oven at 450 degrees F (230 Celsius) for 15 minutes––until
crusty––then take it out and sprinkle a cup of shredded cheese across it and allow it
to melt. Voila your pizza!
The new rental facility in Avon already has all the necessary capital equipment: An
electric oven with two ceramic hearth baking decks, pizza pans, mixing bowls, dough
mixer and roller, and pizza delivery boxes. (Each oven deck can hold one pizza pan.)
Because electricity is included in the facility’s rent, all costs are variable: the
ingredients cost on average €1.20 per pizza and the box €0.20.
To fully specify the process, Jean has also measured all activities and must decide who will
perform them. Initial planning shows that at least two people will be necessary to run the production
process. To keep costs and risks in control, Jean decides that during the initial start-up phase he
should work himself and ask his niece Jacqueline to help him out. The first activity is to take the
order. Applying e-business smartness, Jean has implemented a web-based order taking system that
customers can access not only from their personal computers, but also from their Internet-enabled
GSM mobile phones, which have become wildly popular. The advantage of this high technology is
that order taking does not take any personnel time.
Jean will perform the first three tasks. The first is to prepare the pizza sauce. This involves
washing the mixing bowl (if it was used for a prior preparation) and manually mixing all the precooked sauce ingredients. Sauce can be mixed for one, two or three pizzas at once; in either case,
sauce preparation requires about two minutes. Jean’s second task is to prepare the dough: mixing all
ingredients in the food processor, followed by manual kneading requires an estimated three minutes.
(Like the sauce, dough can be prepared for up to three pizzas at once.) Finally, Jean’s last task is to
put the dough in a pizza pan and to spread the sauce, including the toppings and cheese, onto the
dough, which takes one minute per pan.
Now Jacqueline takes over and loads the pizza pan into the oven and sets the timer for 15
minutes. This activity takes about 1 minute. (For quality reasons, they try to avoid opening the oven
during a baking cycle. Therefore, when they are busy, they would always load two pizza pans at a
time in roughly the same time it takes to load one pizza.) When the pizzas are crusty, it only takes a
second for Jacqueline to take the pizza pans out of the oven. After letting each pizza cool for at least
three minutes, she lets each hot pizza slide out of the pan and puts it into a delivery box; a task that
takes one minute per pizza. Finally, Jacqueline charges the customer’s credit card, staples the receipt
onto the box and declares the pizza order ready for pickup. This last set of activities requires two
minutes.