Strategic Management

Mahnoor Rasheed ()

Assg #01

Q. Do SWOT analysis of two companies and do comparison with

evaluation to show which one is better.

Pizza Hut:
Stengths
Below are the Strengths in the SWOT Analysis of Pizza Hut:
1. Pizza Hut is a huge popular brand name and high brand loyalty
2. Innovative range of pizzas under one roof provided by Pizza Hut
3. Hygenic food preparation and quick service
4. Sound financial situation and international turnover of the brand
5. Pizza Hut has good advertising and marketing through TVCs, print, online ads and
OOH media
6. Over 15,000 franchises around the world which also provide excellent home delivery
7. More than 150,000+ people are employed with Pizza Hut
8. Apart from pizzas, it also offers pastas, wings etc.
9. Pizza Hut has involved in sponsorship of events, sports teams, movies etc

Weaknesses:

Here are the weaknesses in the Pizza Hut SWOT Analysis:

1. Franchise management and service quality is a massive challenge
2. Many options for customers means high brand switching and limited market share
for Pizza Hut

Opportunities:

Following are the Opportunities in Pizza Hut SWOT Analysis:

1. New Pizzas & food preparations with different flavors can help Pizza Hut grow
2. Venture more into home delivery
3. Pizza Hut can venture into newer markets

Threats:
 The threats in the SWOT Analysis of Pizza Hut are as mentioned:
1. Threat from competition can decline the market share for Pizza Hut
2. Health conscious people avoiding pizzas
3. The rising prices of special ingredients like cheese, used in pizzas
4. Constant vigilance of food regulatory bodies can affect operations of Pizza Hut

SWOT Analysis Domino’s Pizza

Strengths:
 Good Returns on Capital Expenditure – Domino's Pizza is relatively successful at
execution of new projects and generated good returns on capital expenditure by
building new revenue streams.
 Strong Free Cash Flow – Domino's Pizza has strong free cash flows that provide
resources in the hand of the company to expand into new projects.
 Strong distribution network – Over the years Domino's Pizza has built a reliable
distribution network that can reach majority of its potential market.
 Strong Brand Portfolio – Over the years Domino's Pizza has invested in building
a strong brand portfolio. The SWOT analysis of Domino's Pizza just underlines
this fact. This brand portfolio can be extremely useful if the organization wants to
expand into new product categories.
 Superb Performance in New Markets – Domino's Pizza has built expertise at
entering new markets and making success of them. The expansion has helped
the organization to build new revenue stream and diversify the economic cycle
risk in the markets it operates in.
 Automation of activities brought consistency of quality to Domino's Pizza
products and has enabled the company to scale up and scale down based on the
demand conditions in the market.
 Highly successful at Go To Market strategies for its products.
 Strong dealer community – It has built a culture among distributor & dealers
where the dealers not only promote company’s products but also invest in
training the sales team to explain to the customer how he/she can extract the
maximum benefits out of the products.

Weaknesses:
 Need more investment in new technologies. Given the scale of expansion and
different geographies the company is planning to expand into, Domino's Pizza
needs to put more money in technology to integrate the processes across the
 board. Right now the investment in technologies is not at par with the vision of
the company.
 Not very good at product demand forecasting leading to higher rate of missed
opportunities compare to its competitors. One of the reason why the days
inventory is high compare to its competitors is that Domino's Pizza is not very
good at demand forecasting thus end up keeping higher inventory both in-house
and in channel.
 Limited success outside core business – Even though Domino's Pizza is one of
the leading organizations in its industry it has faced challenges in moving to other
product segments with its present culture.
 Days inventory is high compare to the competitors – making the company raise
more capital to invest in the channel. This can impact the long term growth of
Domino's Pizza
 The company has not being able to tackle the challenges present by the new
entrants in the segment and has lost small market share in the niche categories.
Domino's Pizza has to build internal feedback mechanism directly from sales
team on ground to counter these challenges.

Opportunities:

 The new technology provides an opportunity to Domino's Pizza to practices

differentiated pricing strategy in the new market. It will enable the firm to maintain
its loyal customers with great service and lure new customers through other
value oriented propositions.
 The market development will lead to dilution of competitor’s advantage and
enable Domino's Pizza to increase its competitiveness compare to the other
competitors.
 Opening up of new markets because of government agreement – the adoption of
new technology standard and government free trade agreement has provided
Domino's Pizza an opportunity to enter a new emerging market.
 Stable free cash flow provides opportunities to invest in adjacent product
segments. With more cash in bank the company can invest in new technologies
as well as in new products segments. This should open a window of opportunity
for Domino's Pizza in other product categories.
 Economic uptick and increase in customer spending, after years of recession and
slow growth rate in the industry, is an opportunity for Domino's Pizza to capture
new customers and increase its market share.
 The new taxation policy can significantly impact the way of doing business and
can open new opportunity for established players such as Domino's Pizza to
increase its profitability.
 New trends in the consumer behavior can open up new market for the Domino's
Pizza. It provides a great opportunity for the organization to build new revenue
streams and diversify into new product categories too.

Threats:
 No regular supply of innovative products – Over the years the company has
developed numerous products but those are often response to the development
by other players. Secondly the supply of new products is not regular thus leading
to high and low swings in the sales number over period of time.
 Imitation of the counterfeit and low quality product is also a threat to Domino's
Pizza’s product especially in the emerging markets and low income markets.
 Intense competition – Stable profitability has increased the number of players in
the industry over last two years which has put downward pressure on not only
profitability but also on overall sales.
 The company can face lawsuits in various markets given - different laws and
continuous fluctuations regarding product standards in those markets.
 Growing strengths of local distributors also presents a threat in some markets as
the competition is paying higher margins to the local distributors.
 Changing consumer buying behavior from online channel could be a threat to the
existing physical infrastructure driven supply chain model.

Comparison between Pizza Hut and Domino’s Pizza:

The first and most important aspect is obviously the pizza itself. It is also the most
contentious. However, speaking purely objectively, there are some undeniable home
truths.

Domino's is almost erotic in its indulgence. At age 28, it is now almost impossible for
me to finish a Domino's pizza without feeling gloriously sick. It's like eating an entire
jar of Nutella, or downing a magnum of champagne. The results are disastrous, but
good God are they glorious.

Pizza Hut, by contrast, lacks the heart-attack-inducing potential of a Domino's. The

deep-pan base is almost focaccia-like in its fluffiness, while the sauce is subtly sharper
than its rival. It definitely won't clog you up quite so quickly.

However, despite Pizza Hut's qualities, there can only be one winner in this category.
For pure flavour firepower, Domino's takes top spot.

So domino’s is on top