PIZZA HUT

Business Report
Table Of Contents

1. Aim of the Report

2. External Environment

3. Internal Environmental

4. Summary

5. References

6. Appendices
 
1. Introduction
1.1 Aim of the Report
This Report describes the external and internal factors that influenced the strategic
decision-making process of Pizza hut as well as what exactly helped it grow as a company.

1.2 Brief summary of the Organization

n 1958, two brothers joined forces (after borrowing $600 from their mother) to open what
would eventually be known as Pizza Hut in Wichita, Kansas, with partner John Bender. They
began with a great marketing strategy - free goods - giving away pizza on the first night to
entice customers. They opened a second store six months later, and a year later, they
owned six restaurants, prompting them to begin franchising. With their use of hard-hitting
marketing, Pizza Hut's name became known throughout the early 1960s. n 1977, Pizza Hut
merged with PepsiCo, increasing sales to $436 million and allowing for the establishment of
a $10 million headquarters in Wichita. ( Pizza Hut, 2022)

1.3 Evaluation over time

By 1971, Pizza Hut had become the world's largest pizza chain in terms of both sales and the
number of locations. By 1972, the company had gone public, restructured its management,
and expanded into new international markets such as Mexico, Costa Rica, Japan, England,
and even New Zealand. The Carney brothers were able to negotiate a deal with global
conglomerate PepsiCo, which paid more than 1.2 billion dollars for the pizza chain. The deal
proved extremely profitable, and by the mid-1980s, the franchise had successfully opened
over 5,000 dine-in and delivery locations worldwide. Profits fell in 1994 because of several
changes. These changes included a halt in pizza market growth, price competition, and an
increase in stores, resulting in fewer corporate resources. Profits fell by 21% overall,
indicating that it was not the best time for the hut (to say the least). The rise of dine-in
versus delivery was also a factor for Pizza Hut. According to Restaurant Business, at the
time, only about 10% of Pizza Hut's sales came from dine-in, so they needed to focus more
on what people wanted and needed - takeout and delivery. To address this issue, many
dine-in-only locations closed, and express locations sprouted up. (Strata Company, 2021)

2. External Environment
The External environment of the business refers to the factors which are not under to
control of the business and can be investigated with the help of PESTEL Analysis.

2.1 Political Factors

Pizza Hut is now a global corporation. Pizza Hut restaurants can be found from the United
States to Asia's third-world countries. There are certain political factors that owners must
keep in mind in each region and state to excel in that specific area. The political factors
include the policies and underlying actions of the government of the state in which the Pizza
Hut branch is located. If the state government is more prone to the proliferation of Pizza
Hut outlets, there will be an increasing number of Pizza Hut restaurants. This increase in the
number of restaurants will eventually increase employment opportunities for the locals and
provide More entertainment options for residents are being added at each stage. Aside
from that, business regulation policies play an important role in establishing a business in
the area. These policies are critical to the success of food companies such as Pizza Hut. As a
result, places with business-friendly policies provide opportunities for the Pizza Hut
organization to establish a successful business.

2.2 Economical Factors

The overall economic system of the state of the region in which the Pizza Hut outlet
operates is critical and has a direct impact on the organizations. For example, countries with
a macroeconomic system will have a direct impact on business chains such as Pizza Hut.
Similarly, the Gross Domestic Product of the state in which the Pizza Hut food chain
operates has an impact on the organization's overall business. The unemployment and
inflation rates in the business region have a significant impact on the business. Economically
developed states are more likely to experience business success. The greater a state's
foreign direct investment, the more Pizza Hut franchises it will have.

2.3 Social Factors

People are related to social factors, and faith is of the people. According to Pizza Hut, the
social factors that will impact the business are the demographic and life expectancy of the
local people in the area where the Pizza Hut franchise is located. There are more chances of
sales and, of course, profits in areas where life expectancy is high and there is a higher
urban population. Similarly, the regions where people are more likely to eat fast food,
mostly in developed countries, are higher in terms of profit and franchise expansion.

2.4 Technological Factors

Pizza Hut had the highest profits in the industry in the 1990s. Many new food chains, such as
Pizza Hut, emerged in the 2000s and, most likely, after 2007. And now Pizza Hut has several
competitors. To keep up with the competition, Pizza Hut constantly introduces innovative
and new pizza and other products. Technological advancement is one of the technological
factors. For example, the current trend of ordering food online while sitting at home has had
a direct impact on the business of organisations such as Pizza Hut.

2.5 Legal Factors

The legal factors include adhering to the rules and regulations of the state in which the food
chain operates. Respecting the rules of that region will greatly contribute to the business's
market value remaining stable. To keep the taste of pizza, the owner and management of
Pizza Hut must maintain the quality and all the required standards.
2.6 Environmental Factors
Environmental Factors include hygiene and considering the trends pertaining to the
environment like introducing the concepts of recycling are the important factors that need
to be considered for the food chains like Pizza Hut. People of every region are now very
much vigilant about their health with the growing pace of several diseases. So that the
organization could always be the top priority of the customers and it must not lose its
prestige.