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Conduct A Swot Analysis On Pizza Hut Restaurant Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 2764 words Published: 1st Jan 2015

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Pizza Hut is a Texas based American restaurant chain and international franchise which specializes in various type of pizza and other side dishes. It is recognized as the worldwide leading pizza restaurant. SWOT analysis is essential to find out the real situation and condition of a selected Pizza Hut Restaurant. Pizza Hut Queensbay is chosen as the subject of this SWOT analysis to figure out its market share and to further improve its sharing in the market. SWOT analysis is a strategic planning method which is widely used to identify the nature of a business regardless of the field involved. SWOT is an acronym of 4 important terms in achieving an objective which is strength, weakness, opportunity and threat.


History of Pizza Hut

Pizza Hut was founded by the late brothers of Dan and Frank Carney in Wichita, Kansas in the year of 1958 after they borrow $600 from their mother to start up the business. Eventually, PepsiCo buy out the company in 1977 after it had become the largest pizza chain in the world since 1971. It’s currently a subsidiary of the world largest fast food restaurant company, YUM! which is actually a spin out independent company from PepsiCo. Pizza Hut has more than 11 thousands franchises worldwide.

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Worldwide market share of pizza restaurant


Pizza Hut as the worldwide leading pizza franchise definitely enjoys a good reputation and being recognized as one of the best pizza maker in the town. This would absolutely being shared by any of their franchise including Pizza Hut Queensbay. Secondly, with a wide variety of pizzas and side dishes it would definitely attract anyone with or without an empty stomach. Pizza Hut also offers higher quality of pizza as compared to other pizza outlet; they use the finest cheese and best ingredients in the market to satisfy their customer. Pizza Hut Queensbay is located at the lower ground floor of Queensbay Mall which is a high traffic zone as people who looks for foods who never miss this particular area as there are many restaurants around there as well. Given its strategic location, Pizza Hut Queensbay could draws much attention from the shoppers no matter it is weekday or weekend. After walking and shopping around the mall the shoppers would definitely want to find a place to rest their tiring feet and to feed their empty stomach; the tempting, delicious and mouthwatering pizzas would be luring the customer to the famous Pizza Hut. Most importantly, the unique and strategic location of Queensbay Mall which is actually neighboring Bayan Lepas Industrial Zone thus the employees from the factory find it convenient to have their meals at Queensbay Mall. People always find it hard to get a parking place in this crowded city, that’s why Queensbay Mall with more than 2000 parking places is an ideal place to stop by regardless of a hot sunny day or a heavily raining day. This huge advantage is going to draw more people to stop by Pizza Hut to have their lunch or dinner.


There is nothing so called perfect, that’s why Pizza Hut Queensbay has got its own flaws too. Although Pizza Hut offers a wide range of pizza to their customer but somehow their menu is more towards western taste instead of eastern. This is a huge disadvantage to them because Malaysia is an eastern country, more people would prefer eastern flavor because this is the local culture and tradition. Besides that, most of the pizza restaurant offering similar type of pizza, customer always looks for fresh and new thing during meal time; declining in satisfaction might lead to customer cut down their visiting time to Pizza Hut too. Moreover by offering customer high quality of pizza and services, the price charged for the foods are comparatively high to other. People would can’t afford the expensive foods might eventually go for a cheaper option. Nowadays people want to live and eat healthily, the fact that Pizza Hut does not offer organic ingredient to be included in their menu harm their market share too. Another obvious weakness in Pizza Hut Queensbay is that they do not take online orders, apart from being unable to deliver the foods to their customer; they also didn’t provide a platform for customer to directly pick up their foods at the restaurant aftermath placing orders.


In every crisis there is an opportunity. The weaknesses that can be seen in Pizza Hut Queensbay do means that they have room to be improved. This opportunity including inventing new flavors of pizza suited to the appetite of the customer. Innovative pizzas, new recipes and flavours with different crusts and topping are a golden opportunity that can be seen to strengthen Pizza Hut grip on their market share. Besides that, Pizza Hut should offer some seasonal pizza which is only available during certain time only. More and more customers would love to have their meals at Pizza Hut because of the limited time only products. Pizza Hut should do some effort to cut down their cost and further decrease the price of pizza so that more people could afford to enjoy. The prices at Pizza Hut are quite hefty for the low or middle income people. Organic food should be included to give people a better choice of eat and live healthily. Next, Pizza Hut Queensbay should really consider renovate their restaurant as the restaurant looks rather dull and old compared to the restaurant around them which has just gone through a series of renovation. Good interior design and atmosphere can draw attention from shoppers as people tend to eat happily under a good atmosphere and clean environment. Last but not the least, Pizza Hut Queensbay should offer online order and delivery so that more people get to enjoy their awesome pizza and other side dishes such as hot wing, pasta, calamari ring and wedges etc. Fast growing of technology can be handy in dealing with customer and daily business as it could double up the speed of daily work in the restaurant regardless of kitchen or dining table.


Due to people always looks for affordable food that could offer the similar satisfaction, Pizza Hut Queensbay face a stiff competition from La Boheme Bakery which own by Aeon Jusco which offer pizza in considerably cheaper price. Customer can choose to buy pan pizza at La Boheme Bakery which is RM18 for a 12inches pizza while Pizza Hut offers the same size pizza at RM29.90. The price gap is quite big and obvious; moreover customers can choose to buy the pizza in slice which only cost them RM3 each. This convenience offer by La Boheme Bakery is suited for those people who going for a smaller portion of meal. As mention before, the strategic location of Pizza Hut is also sharing by other restaurant such as Nando’s, Kenny Roger’s Roaster, McDonald, and Dave’s Deli etc. Domino’s Pizza which is located at Krystal Point shouldn’t be a direct threat to Pizza Hut Queensbay because it is actually 2km away from Queensbay Mall but somehow being a competitor that offers similar type of product, it would definitely affects the market share of Pizza Hut Queensbay. Moreover, Domino’s Pizza Krystal Point do provides delivery service which is a favorable reason for the workers that could not go the restaurant themselves.


To actually maintain and increase the market share of Pizza Hut Queensbay, few steps needed to be taken in order to counter the weaknesses and threats to further improve the strengths and discover more opportunities. First of all, provide more innovative pizza suited to the locals’ appetite. Second, make the pizza affordable and healthy with organic ingredients. It won’t be so easy to revolutionize the online order and delivery system of Pizza Hut Queensbay, but somehow small changes should be made to further increase the market share it has enjoyed for years. For instance, delivery within the mall and the shop lots around Queensbay Mall can be introduced for the convenient of the people working nearby.


As a result of the SWOT analysis, Pizza Hut as the worldwide leader in term of market share in pizza restaurant must go through a series of revolution to attract more customers. By combining the ever growing of technology and a better model of business, Pizza Hut Queensbay can set to achieve more in the sharing of market. With the help of their well-trained employee, Pizza Hut Queensbay should always put the customers in first place and provide the best foods and services in order to sky-rocketing their market share.

Question 2

What macro-environment factors would impact on the operation of Pizza Hut Restaurant at Malaysia?


Macro environment factors are uncontrollable external determinants that affect how a business operates. They are largely within the control of the business, and often need changes in operating, production, management, and marketing. Analysts often categorize them using the acronyms PESTEL. Broken down, PESTEL stands for political, economic, social, technologic, environmental and legal concern.


Political macro environment factors include things like tax policies, government-issued safety regulations, the availability of government contracts, and even shifts in the controlling political party. International laws, such as trade agreements and tariffs, may affect the supply and demand chains and available markets for many different companies as well. The policies and actions of the government wherein Pizza Hut is located, whether national or local affects how the business is being conducted. The political and legal conditions that could affect the business of Pizza Hut are the policies of the local and national government towards business, if the government is more open in the establishment of numerous Pizza Hut restaurants, then more restaurants will be established. On the other hands, if the policies do not protect the business then fewer restaurants will be established. Another factor is the regulation of the business and the environment. If the business environment is not friendly with the company, then there is a possibility that Pizza Hut would consider open their new franchise in other country who welcomes their establishment.

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A market boom, recession, or growing inflation problem can all change the way an organization plans for the future and operates in the present. Economic factors are often difficult to assess, since economic forecasts and analyses vary widely between experts. Unemployment levels, comparative foreign exchange rates, and the state of the global economy can all help or hurt a business’ ability to get needed components and maintain a stable profit. This part is concerned on the overall perspective of the economy. The macro economy of a nation has a huge impact on the business such as Pizza Hut. Factors in the economy include the gross domestic product, the unemployment and inflation rates, the foreign trade deficit and surplus. If the overall economy of a country is not favourable, lesser people will franchise Pizza Hut because they will most likely loss a great amount of money instead obtaining profits. With its focus steadily on quality and variety, Pizza Hut has given a new dimension to regular pizza eat-outs. However the trifle higher prices may remain a concern for middle class locals with lesser purchasing power and disposable income. The status is steadily improving as more of us embrace fast foods to suit the pace of our life


The mood and demographics of the population make up the social area of macro environment factors. For example, a society that places an emphasis on self-guided jobs with room for creativity may cause organizations to redefine job descriptions and adapt the model of the workplace to attract workers. Social trends, such as a preference for on-demand mobile media devices, can also influence which products a company manufacturers and where it chooses to spend advertising dollars. It is the most difficult from the four factors because the attitudes and beliefs of people are difficult to quantify. Aside from the attitudes and beliefs, demographic factors such as population and life expectancy are also important aspects in the analysis of the social factors. The influence of the values and beliefs affects the business of Pizza Hut.  For instance in Malaysia, pork is not served in the Pizza because Muslim is not allowed to consume pork. This is largely due to the high percentage of Muslim native in the country as well as Malaysia being a Muslim country too. The changing trends in the taste of the consumers also play a vital role in the external analysis of the environment. Consumers will demand that the foods to be healthy if the current trend in the society leans toward health conscious. People tend to eat spicy food in Malaysia which would eventually lead to the menu moving toward this type changes. Food has no language. Good food is appreciated by everybody across the globe. Pizza Hut has its chain around the world. It has taken immense effort to cater to its customers not only in a certain area but worldwide.


Technological macro environment factors can affect how organizations do business. A new type of computer chip, machinery, or product created through research and development can help a company stay modernized and ahead of the market curve. Pizza Hut Malaysia must be able to accurately identify which new developments will be truly useful, and which are just fads. The pacey changes in technology nowadays have huge impacts in the businesses. The factors that have influence Pizza Hut Malaysia including research and development, internet and e-commerce, and other new technologies. The research and development has immediate effects on the business of Pizza Hut Malaysia because through R&D new products are created or developed for the business. Besides that, the internet and e-commerce also conduces to the technological factors because through them customers can give their feedback regarding the products and services offered by Pizza Hut Malaysia which can also assists in improving the quality of product and service of the company. Locating stores and placing orders come in handy for the Pizza Hut lovers too. With their virtual store kind website, Pizza Hut Malaysia offers the customers a wide variety of options to choose from menu and providing new offers from time to time through their virtual store kind website. Now orders can also be placed through mobile phones. High end technologies are used at the cash counters


Environmental concerns are important to businesses both in the short and long term. In the short-term, things like natural disasters can disrupted production and supply operations, or even destroy company assets. Programs such as environmental risk assessment can help companies prepare to handle many of the most likely short-term crises. In the long view, however, businesses may have an interest in ensuring that their supply chains are not destroyed by unsustainable practices.


Legal factors can limit or change how a business operates. For example, they may have to hire additional supervisory staff or purchase safety equipment after a new health and safety law is passed. Child labour often limit the hours a minor can work and require set break periods. If an organization employs several minors, it may have to hire additional help to cover the hours when the minors cannot legally work. Legal factors are determined by both local legislation and regional and national laws. In some cases, companies that do business internationally are also affected by international laws.


Pizza Hut as the leader of worldwide pizza restaurant needs to adapt to changes when it comes to maintaining their daily operation. As the pioneer of pizza restaurant in Malaysia, all the impact of the PESTEL(macro-environmental problem) is definitely not a fresh thing for Pizza Hut but to maintain their grip on the current market is going to need huge effort from all the employee. Nevertheless, all these macro-environmental problems could be overcome from time to time with the proper method of handling from the management of Pizza Hut Malaysia.


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