Business Analysis

Pizza Hut SWOT Analysis

pizza hut cover.jpg

Pizza Hut is one of the largest American multinational food chains with an international franchise having more than 18,000 restaurants. It was founded in Wichita, Kansas, in 1958 by two brothers, Dan and Frank Carney. They offer their signature pan pizza, appetizers, pastures, breadsticks, desserts, and beverages. It provides catering services and franchising opportunities.

It runs three forms of restaurants; family dining restaurants, delivery services, and carry-on types, and the last one is a merge of the first two. Its vision is to become the number one pizza company globally, while its mission is to bring flavor to life.

Pizza Hut belongs to the retail food industry with retailers such as supermarkets, supercenters, convenience stores, and warehouse stores.

This analysis seeks to determine the company's strengths, weaknesses, opportunities, and threats to help assess its performance amidst competitors and devise measures to counter competition and limitations.

Pizza Hut’s Strengths

These unique skills give the company a competitive edge over the rest in the industry in gaining more customers and generating high revenues.

  • Innovation. The company is a highly innovative and creative brand that offers various pizzas with different innovations such as cheesy-crust and hand-tossed pizzas under a single brand. It offers vegetarian and non-vegetarian pizzas while maintaining the originality of pizzas from Italy.
  • Global existence. Pizza Hut is a global corporation with over18thousand locations in over 120 countries. This has increased the brand's recognition and loyalty the world over.
  • Sponsorship. It sponsors many international sports events, movies, festivals, and projects for various companies to increase brand awareness and customer base. For example, in 2018, it sponsored the National Football League. In 2019 during the peak of the Superbowl (Kelso, 2019), an estimated 5,000 pizzas were ordered per minute and 6 million wings a day. This led to increased sales.
  • Country-wise menu. They provide food products that rhyme with the culture of that particular area.
  • Introduction of latest technologies. Pizza Hut uses a white-labeled mobile application and Customer Relationship Management (CRM) system that analyzes customer behavior and is used for marketing campaigns. This has increased its social media followers by 50% and has helped retain existing customers.

Pizza Hut’s weaknesses

  • Rising competition. The brand has many competitors, such as Domino's Pizza, Mc Donald's, Olive Garden, Papa John's, Zume Pizza, etc. Customers have a variety of choices for the same meal, so there is high brand switching, reducing market stake.
  • Franchise management problem. Pizza Hut operates under the franchising business model, which poses a real administration challenge as the Franchisee has full control over the branch, barring the company from engaging in management. This results in some quality fears that affect the company's overall image.
  • Lack of variation. Customers always want and prefer new tastes. Pizza Hut has had its taste for quite a long time, and customers' interest is moving towards a wide range of flavors and tastes. Thus, Pizza Hut needs to continue coming up with new flavors and varieties.

Pizza Hut’s opportunities

  • Expansion opportunities. There are new opportunities, especially in developing markets such as Asia and selected towns, where they can obtain more customers by setting up new shops or malls and providing home delivery services.
  • New flavor. Pizza Hut has an opportunity to introduce a new variety that suits the local taste to attract new customers as the strategy will go well with the people.
  • Venture more into home delivery. The world is gradually changing into the online space where they order products and are delivered. Many companies have been forced to develop advanced methods to send products to their customers, such as drone delivery service, which is cheaper and more effective. Pizza Hut should join the trend and even come up with other solutions.
  • Advertising. They are undertaking aggressive product promotion and awareness on all media while focusing on niche markets such as using social media to reach out to the target market. The media can also show all the good deeds done all over the world and various projects undertaken. This will help in growth as consumers prefer socially responsible brands.

Pizza Hut’s threats

  • Rising new entrants. New entrants keep coming into the market with ground-breaking products. This makes it very hard for existing companies to retain the market share. Dominos is the largest direct competitor to Pizza Hut concerning pizza and Italian food. Dominos has a footprint in most locations where Pizza Hut does not. Other direct and indirect competitors include McDonald's, KFC, and Burger King.
  • Rising costs. The increased prices of ingredients such as flour, meat, and cheese pose a challenge to the retailer to increase the price of their products to cover up the production cost for the brand's stability. These increased prices will affect sales hence affecting Pizza Hut’s market share.
  • Growing health concerns. Due to increasing health campaigns and awareness, people have become more enlightened about lifestyle diseases. This might cause a decrease in the uptake of pizzas as too much pizza consumption can cause heart problems and high blood pressure as most pizza toppings contain unsaturated fats. Pizza Hut is trying to counter this by bringing plant-based meal pizza.
  • Multiple regulations compliance. Pizza Hut operates in different sovereign countries. Therefore, depending on the locality, it has to deal with varying rules and compliance requirements.

Pizza Hut SWOT analysis and mind map

A mind map is given below to give a more comprehensive Pizza Hut SWOT analysis. Pizza Hut is on the rise to develop a better environment for its customers.

 Pizza Hut SWOT Analysis Mind Map

Key Takeaways

Pizza Hut is a brand. The brand has spread its wings across the world, with more than 18,000 restaurants in over 100 countries. It offers varieties of pizzas to the masses on its counters as well as delivers the required Pizza at home in guaranteed time frame. In case of failure to deliver in time, it does not charge cost of Pizza. Pizza Hut is constantly on the rise exploring new markets and better ways of reaching out to meet top-grade customer satisfaction. 

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References

https://swotandpestleanalysis.com/swot-analysis-of-pizza-hut/

https://iide.co/case-studies/swot-analysis-of-pizza-hut/

https://www.marketing91.com/swot-analysis-pizza-hut/

https://www.mbaskool.com/brandguide/food-and-beverages/586-pizza-hut.html

https://www.swotanalysistemplate.com/swot-analysis-of-pizza-hut/

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