Introduction

Pizza Hut, a subsidiary of Yum! Brands, is the world's largest pizza company and home of Pan
Pizza. Pizza Hut began 60 years ago in Wichita, Kansas, and today is an iconic global brand that
delivers more pizza, pasta and wings than any other restaurant in
the world.

Since its inception in 1993, Pizza Hut has fast become a

household name across Sri Lanka. With its first restaurant at
Union Place, Colombo 2, Pizza Hut became the first
international restaurant chain to begin operations in Sri Lanka.
Pizza Hut is a brand name belonging to global restaurant chain
Yum Brands Incorporated which is based in USA. It is the
world's largest restaurant company which also owns KFC &
Taco Bell.

In 1999, Pizza Hut ventured into the home delivery service setting yet another innovative
milestone in Sri Lanka. With the launch of its island-wide delivery hotline 011 2 729729, Pizza
Hut delivery rose swiftly to provide 50% of the restaurant's net sales.

To date, Pizza Hut Sri Lanka employs over 1800 staff members with diverse backgrounds. As an
equal opportunity employer, Pizza Hut utilizes 1% of its annual income towards training and
welfare. The company strongly believes in creating a results oriented fun working environment.

Over the past 24 years, Pizza Hut has grown from strength to strength. At Pizza Hut, we believe
in delighting the senses of each and every customer. This is why all dine-in outlets offer a unique
family friendly dine-in experience whilst effectively capturing the gastronomic palate of the Sri
Lankan consumer with innovative additions to its menu. Currently Pizza Hut serves a wide range
of pizza toppings with an exciting selection of special crusts as well as appetizers, pastas, rice,
desserts and beverages.
Market Structure

The Market Structure for Pizza Hut is Monopolistic competition because the brand competitors
of Pizza Hut such Domino’s Pizza Harpo’s, Giovanni's, Oro 1889, Rocco's pizza are some of the
sellers that sell pizza with similar features and customers benefit both from equal amount and the
prices are not that different from each Brand. so Pizza Hut has to do more advertising in order to
be different from its brand competitors. Pizza Hut puts great attention to its competitors because
customers will evaluate the different products and they will choose the one they think is best for
them. Dilivary service app

Moreover Pizza Hut is price maker which means it can set its own prices for its product but
setting the price too high can also make pizza hut lose customers so unless the quality and the
flavour of the product it’s totally different from its competitor’s pizza Hut cannot make the price
too high. In this competition it’s also easy for new pizza shops to open easily in order to compete
with pizza hut, and it’s also easy for other pizza selling companies to exit the firm because they
are not tied to government agency.

Product in a monopolistically competitive market is slightly different from those of other firms,
in terms of product characteristics, service, and packaging and advertising. Product
differentiation is perhaps the factor that distinguishes this market most from perfect competition.
Under perfect competition, where products are homogenous, each firm faces a horizontal
demand curve, indicating that each firm’s product is a perfect substitute for that of every other
firm.
Offers pizza toppings

Lava cake

Entry Or exit

As in case of perfect competition, firms are free to enter and to exit the market anytime under
monopolistic competition. The entry or exit of a firm will not change the number of products that are
being produced annually. If a firm leaves the industry, the market share of that firm will be equally or
proportionately distributed among the rest of the firms, striking a balance between the demand and the
supply.

elling costs

Each firm spends a lot of money in the form of advertisement and publicity of its products. With
a view to selling more and more units of the product it gives wide publicity of its products in
newspapers, cinemas, journals, TV, internet, etc. These expenses are called selling expenses.

Price control

Each firm in a monopolistic competition has a limited control on the price of its product.
Average and marginal revenue curves of a firm under monopolistic competition slope
downwards as in case of monopoly. It means that if a firm wants to sell more units of its product
it will have to lower the price per unit.
Free entry and exit

In the long run there is free entry and exit. There are numerous firms awaiting to enter the
market each with its own"unique" product or in pursuit of positive profits and any firm unable
to cover its costs can leave the market withoutincurring liquidation costs. This assumption
implies that there are low start up costs, no sunk costs and no exit costs.

Independent decision making

Each MC firm independently sets the terms of exchange for its product.

[9]

The firm gives no consideration to whateffect its decision may have on competitors.

[10]

The theory is that any action will have such a negligible effect on theoverall market demand
that an MC firm can act without fear of prompting heightened competition. In other wordseach
firm feels free to set prices as if it were a monopoly rather than an oligopoly.

Market power

MC firms have some degree of market power. Market power means that the firm has control
over the terms andconditions of exchange. An MC firm can raise it prices without losing all its
customers. The firm can also lower priceswithout triggering a potentially ruinous price war with
competitors. The source of an MC firm's market power is notbarriers to entry since there are
none. An MC firm derives it's market power from the fact that it has relatively fewcompetitors,
competitors do not engage in strategic decision making and the firms sells differentiated
product.

[11]

Market power also means that an MC firm faces a downward sloping demand curve. The
demand curve is highlyelastic although not "flat"