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Pizza Hut: Stuck in The Middle

Pizza Hut was once the largest pizza chain in the world but has lost market share as competitors adapted better to changing customer preferences. Customers now want faster, more customized orders available through online and mobile platforms. Pizza Hut's traditional dine-in format with a 15-20 minute preparation time no longer meets these demands. To regain its leading position, Pizza Hut plans to remodel 700 US stores by 2022 with new ovens that can bake pizzas in 3.5 minutes and redesigned interiors to accommodate online ordering and faster service styles popularized by competitors. Tracking the success of these changes across Pizza Hut's operations will be critical to determining if the initiatives can restore its competitive position.

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Patricia Ann Señar
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624 views2 pages

Pizza Hut: Stuck in The Middle

Pizza Hut was once the largest pizza chain in the world but has lost market share as competitors adapted better to changing customer preferences. Customers now want faster, more customized orders available through online and mobile platforms. Pizza Hut's traditional dine-in format with a 15-20 minute preparation time no longer meets these demands. To regain its leading position, Pizza Hut plans to remodel 700 US stores by 2022 with new ovens that can bake pizzas in 3.5 minutes and redesigned interiors to accommodate online ordering and faster service styles popularized by competitors. Tracking the success of these changes across Pizza Hut's operations will be critical to determining if the initiatives can restore its competitive position.

Uploaded by

Patricia Ann Señar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Pizza Hut: Stuck in the Middle

A business industry with thousands of competitors requires execution of exceptional skills and keeping
up with the competitive environment. While Pizza Hut was growing its business, it failed to keep up with
the changes in the industry. Pizza Hut was founded in 1958, and in 2016, it had more than 14,100
locations in over 90 countries and was still the number one (1) pizza chain in the world with sales over
US$5.5 billion orP275 billion. Unfortunately, that number was down 3.5% in 2017 as competitors who
are more attuned to the customers have taken market share.

Making pizza is a staple of restaurants around the world, and there is little rocket science in the effort.
What has changed over time is how customers want to order, what they want as ingredients, and how
they want to consume their pizza. Online and mobile ordering now accounts for more than 50% of rival
Domino’s business. Customers are demanding fresh ingredients, gluten-free options, and high-speed
preparation. The advent of fast-casual restaurants where customers watch the preparation of their food
has only exasperated this situation.

Into this new era comes a Pizza Hut empire that was built around a hidden kitchen, pizzas that take 15-
20minutes 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, redesigned interiors that included a bar and new, simpler
procedures for running a store-front. After testing the new ideas at two (2) restaurants in Texas, Pizza
Hut announced plans to remodel700 of its U.S. stores a year through 2022. This initiative is in line with
the objective of the company to regain its leader position in the pizza business with sales topping the
275-billion-peso record of the company.

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 items: (2 items x 5 points)

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

 The negative effects of volatile, unpredictable, complex, and ambiguous are not limited
to the business world. Volatility is present in the case because of their rapidly changing
customer preferences, which will reduce the company's profits by 3.5 percent.
Uncertainty is also present because it states that Pizza Hut's management has failed to
predict how their customers want to order. Complexity does not help to come up with
an immediate strategy because it takes a lot of factors just to change everything
according to their customer's preferences and Ambiguity because the situation they are
in is not very clear because Pizza Hut if they were to copy their competitors’ online
preferences in offering new ingredients in their menu or they could change everything
and come up with new ideas.
2. Propose ways on how Pizza Hut can regain its competitive position in the market.

 They will only regain their competitive position if they listen to their customers, for
example, by adding more ingredients through the use of their menu online so that
customers are aware of what they really want and have more options, as technology is
widely used these days and is advancing by the day, and Pizza Hut will only regain their
competitive position if they identify the bridge any gap that exists between their select
menu items and their select menu items.

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