BM2212

Name Section: Date: 05/15/23

ACTIVITY
Pizza Hut: Stuck in the Middle
A business industry with a large number of competitors requires the execution of excellent skills and
keeping up with the competitive environment. While Pizza Hut was developing its business, it neglected
to stay aware of the changes in the market. Pizza Hut was established in 1958. In 2016, it had more than
14,100 stores in more than 90 nations and was still the number one (1) pizza chain with deals over 5.5
billion dollars or 275 billion pesos. Unfortunately, the number went down 3.5% in 2017 as competitors
who are more sensitive to the clients have taken a piece of the market share.

Making pizza is a staple in all restaurants around the world. What has changed over the years is how
customers order, the ingredients they want, and how they want to eat their pizza. Online and mobile
ordering accounts for over 50% of rival Domino’s business. Customers demand fresh ingredients, gluten-
free options, and high- speed preparation. The advent of fast-casual restaurants where customers watch
their food preparation has only exasperated this situation.

Into this new era of advanced technology comes a Pizza Hut empire built around a hidden kitchen, pizzas
that take 15–20 minutes to prepare, and a 1950s-style eating area that is anything but comfortable.
After evaluating the best way to address the new reality, Pizza Hut began experimenting with new ovens
that could cook a pizza in three-and-a-half minutes. These redesigned interiors included a bar and fresh,
simpler procedures for running a storefront.

After testing the new ideas at two (2) restaurants in Texas, Pizza Hut announced plans to remodel 700 of
its U.S. stores a year through 2022. This initiative aligns with the company’s objective to regain its
leadership position in the pizza business. Tracking the effect of these changes and crafting those changes
system-wide will be a true evaluation and control challenge for the organization.

Answer the following questions:

1. Describe how volatility, uncertainty, complexity, and ambiguity affect the business
environment of Pizza Hut.

The business environment of Pizza Hut is affected by volatility, uncertainty, complexity,

and ambiguity due to the changing customer demands, increasing competition, and
technological advancements. Pizza Hut failed to keep up with these changes, resulting in a
decline in market share. Customers now demand fresh ingredients, gluten-free options, and
high-speed preparation, while online and mobile ordering has become dominant in the industry.
The rise of fast-casual restaurants has further complicated matters. Pizza Hut's outdated
business model, with hidden kitchens and slow pizza preparation times, is no longer competitive
in the market. To address this, Pizza Hut has experimented with new ovens and redesigned store
interiors to meet these new demands. The company aims to remodel 700 of its U.S. stores per
year through 2022 to regain its leadership position in the pizza industry. However, implementing
these changes system-wide and measuring their effectiveness will significantly challenge Pizza
Hut.

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2. Propose ways for Pizza Hut to regain its competitive position in the market.

Pizza Hut can take several steps to regain its competitive position in the pizza industry.
Firstly, the company needs to conduct market research to understand its customers' changing
preferences and needs. Based on the research findings, Pizza Hut can introduce new products
and services that align with customer expectations, such as fresh ingredients, gluten-free
options, and faster delivery. Second, the company needs to invest in technology to enhance the
customer experience. This could include developing a mobile app that allows customers to order
and pay for their pizzas, tracking their order status, and providing personalized
recommendations based on their preferences.

Third, Pizza Hut should consider revamping its physical stores to create a more modern
and comfortable environment that attracts customers. This could include redesigning the
interiors, incorporating a bar or lounge area, and offering faster and more efficient service.
Fourth, Pizza Hut should focus on marketing and advertising campaigns to build brand
awareness and attract new customers. This could involve partnering with popular influencers or
celebrities, creating viral social media campaigns, and offering discounts or promotions to entice
customers. Lastly, Pizza Hut should prioritize employee training and development to ensure that
staff are equipped with the skills and knowledge to provide excellent customer service and
maintain high standards of food quality. By implementing these strategies, Pizza Hut can regain
its competitive position in the market and establish itself as a leader in the pizza industry.

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