A Case Study on Pizza Hut

Name: Tofayel Haque Sagor

ID: 201-121-016

Requirement 1:

SWOT analysis of Pizza Hut

Strengths:

 One of the largest restaurant chains in the world.

 Strong franchise network.
 Large verities of pizzas.
 Quality products and qualifies saff.
 Good marketing and many media partners.
 Sound financial situation and international turnover.
 Reliable suppliers.
 Strong brand image.

Weaknesses:

 High overhead costs due to large number of restaurants.

 Higher price.
 Only core branches are highly successful.
 Failed in forecasting demand in compare to competitors.
 Though pizza hut has brunches all over the world, but they only focus on western taste.

Opportunities:

 New market can be explored.

 They can come up with new flavor by considering taste.
 Reduction of price can be an opportunity as they have e more resources then the competitors.
 New trend in customer behavior can create new market.


Threats:

 Competitor like Domino’s and Papa John’s are the big player in the industry.
 Industry growth is high, and number of competitors are also high.
 There are fast food companies can become substitute.
 People are now more conscious about their health and thus are less inclined towards fast food.

Requirement 2:

Implications of Pizza Hut’s big price cuts for its brand image:

Brand image is created on consumers mind. A company may create a product, but customer create the brand. So, in
attempt to build brand image company should aim at creating value around the product for which the customers will
be attached. The more successful the company is in creating value around the product in customer’s mind, the more
price it can fetch.
So, in my point of view there in not much implication of cutting price in creating brand image. Although Pizza Hut
already has created brand image, in the current time of resection cutting price boost the sale. And if they can provide
value with low price the brand image will be stronger.

Requirement 3:

In current time where competition is so much intense, customer loyalty is a little outdated concept here. Customer
will remain loyal to any brand if they are providing value to their customer. If a company fails to provide value to its
customers, they will switch since there are lots of player in the market who are selling similar products or services.

Price cuts are price promoting which are used by companies for a short period of time to boost sale, it does not
create customer loyalty. Thus, the are some other pricing strategy that can create customer loyalty. Such as
promising reward, instead of giving 5% of in first purchase company can give 10% off on second purchase.

Requirement 4:

Pizza Hut is the second largest restaurant in the world and has large customer base around the world. It has strong
franchise network and its operation scale is larger than their competitor and, they have reliable suppliers. So in time
of resection they might find difficulties in selling their product but they hold a stronger position in the market than
their competitors.

In their experience they saw the result of cutting price was quite positive. By reducing the price, they may earn very
low profit on per unit off pizza, but it will increase total sale, and which will result in profit. As the economy is
sagged other competitors will face difficulties in selling their products. And this is great opportunity for pizza hut to
grab the customers. So, despite of reduction in price pizza hut can still earn profit by increasing sales.