Report: Zaktor-1

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Zaktor-1

PESTLE Analysis of PIZZA HUT

Executive Summary:
Pizza Hut is one of the leading multi-national restaurant food chains in the
USA, and the company specializes in making pizza and serving a small range of
side dishes and desserts. Pizza Hut was founded by Dan Carney and Frank
Carney (both brothers) in 1958, and since then, the company has been
committed to becoming a brand and is one of the world's largest and most
recognized pizza chains. The company operates in more than 100 countries and
has acquired a reputable market share in providing food and services. The
company's reputation has been the superior quality of food and value, which
has improved consumers' taste worldwide. Pizza Hut has always leveraged a
competitive advantage as its business strategy has been impressive,
considering the inclusive culture it adapts to within the company (Wiki). This

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report will provide a detailed PESTLE analysis of the company, showcasing the
framework ingredients.
Table of contents
Executive Summary: 1
1.0 Introduction 3
1.1 Overview of Pizza Hut 3
2.0 PESTLE Analysis 4
POLITICAL 5
ECONOMIC 5
SOCIOCULTURAL 6
TECHNOLOGICAL 6
ENVIRONMENTAL 7
LEGAL 7
Impact of PESTLE on Management 8
Impact of PESTLE on Operations 8
Conclusion 9
References 10

1.0 Introduction
It is indisputable that today, the fast food industry is one of the most vital
industries in the world, as, after all, everyone wants to eat and eat well. Indeed,
some companies worldwide have fascinating dynamics that make them ringing
with the space where rising costs, labour expenditures, and much more make it
difficult to make a profit.
Furthermore, this paper looks at Pizza Hut's overview and briefly introduces
the company. Then, we will discuss the PESTLE Analysis, which comprises the
political, economic, social, technological, environmental and legal factors that

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might affect the company's growth (Perera, 2018). To conclude the paper, we
will also highlight the impact of the PESTLE analysis on the operations,
management and organizational performance that have kept the company in
the limelight as a leading pizza restaurant worldwide.
1.1 Overview of Pizza Hut
Pizza Hut was founded in 1958 by brothers Frank Carney and Dan Carney in
Kansas, and since then, it has grown into a world of fast-food chain franchises
in more than 100 countries and over 18,000 restaurants serving the very best
pizza. One of the brand's favourite menus from various crust styles includes the
Pan, Thin 'N Crispy, and Hand Tossed pizza with various mouth-watering sauces
and toppings cooked according to the consumer's taste. Some side dishes are
also included in the menu, keeping the savoury flavour, including chicken wings,
breadsticks and pasta (Kazmi, 2007). The company also introduced a limited
menu of desserts, including chocolate chip cookies and Cinnabon mini rolls,
which are customized according to the customers' preferences.
Over the years, Pizza Hut has turned from a restaurant to a multi-national
brand due to the changes carried out by looking deeply into market trends and
consumer preferences. One of the adaptabilities that Pizza Hut has acquired is
technological advancement, especially in incorporating digitalization into their
entire work, which includes marketing, ordering, and delivery. Create a website
for orders and mobile apps for easy convenience for young teens who are
addicted to the use of mobile phones (CK Chong, 2023). Considering the
traditional dine-in, the company has transformed their restaurants into an
elegant and universal format globally. The business model of Pizza Hut has
been outstanding. Keeping the transformation approach of corporate-owned
and franchisee, the company has been able to focus more on marketing,
training and operational matters simultaneously. This has allowed Pizza Hut to

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expand its roots all across the globe and also helped it maintain the high
quality of standards in its products and consumer expectancy (Gassmann et
al., 2020).
2.0 PESTLE Analysis

PESTLE Analysis is companies' foremost managerial framework to measure the

external macro-environmental factors that impact their performance.
POLITICAL factors usually relate to the policies undertaken by the government,
the rules and regulations, and the country's political stability mentioned above
that can or are impacting the business environment.
ECONOMIC factors are the trends affecting the company's growth and
profitability, looking at the country's economic conditions.
SOCIOCULTURAL factors relate to the cultural and social aspects that impact
lifestyles, consumer preferences, and market trends.
TECHNOLOGICAL factors apply to the latest technologies and innovations that
impact the industry.
ENVIRONMENTAL factors usually deal with environmental concerns that affect
decision-making trends and operational matters.
LEGAL factors are used to govern the business within the laws and regulations
of the industry.
The PESTLE analysis framework in detail is explained herewith:
POLITICAL

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Government Policies and Regulations: Most governments around the globe

have conditioned some rules and regulations that affect the food industry.
These policies are related to the safety standards of the employees, wages,
food safety and license to operate food businesses in the country. Pizza Hut
must comply with the rules and regulations and keep their data up-to-date to
run their operations smoothly (Naga, 2013).
Import Policy: Many raw materials like cheese, meat, and some vegetables are
imported by Pizza Hut, which can affect the business' profitability due to
changes in tariffs that impact the industry.
Taxation: The government imposes VAT, corporate tax, and other taxes that
affect profitability. Any change in taxation policies will impact pricing and profit
margins.
Public Health Policies: Recently, from a global perspective, many of the fast
food chains have been quite concerned due to the legislation that concerns
public health, like policies regarding fat content and other nutrition that can
force Pizza Hut to change their menu (Bakar, et al., 2021).
Political Stability: Pizza Hut's operations can be severely affected by political
unrest, riots, or protests, which can cause the shutdown or permanent closure
of its outlets.
ECONOMIC
Spending Power: The company's economic condition affects the population's
spending power. People like to dine out in booming economic conditions, which
can benefit Pizza Hut. On the other hand, if the economy experiences a
downturn or recession, expenses are cut down, impacting Pizza Hut's
profitability (Gillespie, 2024).
Interest Rate: If the interest rate is high, the cost of capital and restaurant
renewal automatically increases, which might slow down the company's future

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expansion plans.
Level of Employment: Higher employment levels will increase sales in
restaurants like Pizza Hut, and conversely, high unemployment will lead to low
sales, and Pizza Hut might consider staff reductions.
Economic Cycles: Fast food demand often correlates with the economic cycle.
Pizza Hut might see a decline in customer visits during recessions, but
consumers might look for deal options and take-outs because they might be
cheap (Simakova, et al., 2022).
Competitor Prices: Pizza Hut needs to monitor competitor prices and product
ranges due to economic factors. If a competitor offers the same product at a
lower price range, Pizza Hut must reconsider its pricing strategy to remain
competitive.
SOCIOCULTURAL
Eating Habits: Cultures in different countries have different eating habits. While
pizza is a trendy food, the crust style, the toppings, and the time consumers
spend eating it seek healthier options. Pizza Hut needs to understand its eating
habits according to local preferences to understand better and tailor its menu.
Lifestyle Trends: As many people are now more conscious about healthy food,
this trend can help Pizza Hut add low-fat options, including salads, to attract
customers (Page, 2012).
Dynamics of Family: In many cultures, eating out with family is more than just
an affair; the seating arrangements within Pizza Hut outlets will help target
family audiences.
Western VS Traditional: In some countries, Western cuisine is not preferred over
traditional food, but Pizza Hut has indulged local flavours in its cuisines, like
paneer pizza, which appeals to these preferences (Edberg, 2013).
TECHNOLOGICAL

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Online & Delivery Platforms: As smartphones and the internet have spread
worldwide, online ordering is becoming a fast-trending trend. Pizza Hut must
update its online ordering system efficiently to meet the demand (Maduoka,
2006).
Food Technology: Cooking pizza in the oven and transforming it with technology
to preserve the ingredients has significantly impacted Pizza Hut's quality and
cost-effectiveness.
Mobile Payments: With the increasing demand for mobile payment solutions,
Pizza Hut can handle cash transactions more securely and improve the
payment process (O'Reilly Media, Inc., 2014).
AR and VR: Though the context of AR and VR is emerging, creating an AR App
can help customers see the look of their ordered pizza before ordering.
ENVIRONMENTAL
Waste Management: Pizza Hut produces a large amount of waste, such as
boxes, wrappers, and beverages. With more waste management and recycling
regulations, Pizza Hut must adopt more sustainable packing materials
(Rahman, et al., 2022).
Water Use: Water is the most vital resource in the food business, and
regulations in areas where water is scarce could affect Pizza Hut's daily
operations.
Sustainable sources: The increasing demand for sustainable food sourcing
might cause Pizza Hut to reconsider its ingredients using sustainable farming
practices and consider the costs that will be affected.
Environmental regulations: Environmental laws vary from region to region, and
Pizza Hut needs to fully comply with all environmental regulations, from
building codes to waste disposal (Stalley, 2010)
LEGAL

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Safety Regulations: Complying with hygiene regulations and food safety is the
most critical aspect for any restaurant, and failure can result in fines and the
closure of operations. Pizza Hut must investigate the safety regulations and
correctly comply accordingly (Lusk, et al., 2013).
Franchising Agreements: Many of Pizza Hut's business operations are
franchised. The company needs to draft the agreements properly, considering
the rights and responsibilities of both parties and protecting each other's
rights.
Licensing: Running a food business is only possible with a license. Pizza Hut
must ensure that all the licensing formalities are fulfilled and up-to-date.
Advertising Law: Advertising regulations vary from country to country, and Pizaz
Hut needs to ensure that its marketing strategy and promotional offers comply
with local regulations and international laws (Schweig, 2005)
Impact of PESTLE on Management
PESTLE analysis helps managers probe the external environment and assess
the risks and the chances of the organization's development. It also helps
managers and entrepreneurs identify the risks coming from outside factors,
like changes in government regulations, economic crises, or substitution of
consumer preferences by new ones. By identifying these risks, managers can
skillfully create plans to reduce exposure to the risks and maximize the
chances of success. Besides, such an analysis also offers managers a great
source of knowledge about the external environment that can be used for
impactful decisions (Dinçer, et al., 2019). By reviewing these matters, the
managers can more profoundly assess the probable consequences of their
choices for the organization and its stakeholders.
Impact of PESTLE on Operations

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With PESTLE analysis, companies are better informed and more effectively
implement strategic plans that affect their operations. This enables the
decision to be made intelligently, a forward-looking approach that can be used
to identify possible threats and opportunities. PESTLE analysis is a tool that
gives information about the effect of the market on an organization and also
helps to unveil some external factors that influence consumer behaviours,
trends, and the competitive environment. This information can be applied to the
efficiency of the operations, the market positioning, and the growth. PESTLE
analysis helps businesses understand the legal and regulatory environment
where they operate. By remaining up-to-date with any changes in the laws and
regulations, companies will ensure they comply and avoid possible legal issues
that may affect their operations (Staaf & Pojasek, 2023).
Impact of PESTLE on the Organizational Performance
However, political stability and governmental provisions are crucial for Pizza
Hut's operations worldwide. By considering political factors, Pizza Hut can
strategize its plans so that they are by applicable laws and can continue its
operation. Inflation and interest rates are the most important factors
influencing Pizza Hut's financial situation. By analyzing economic factors, the
company can predict market trends and make correct pricing strategies and
strategic investments to maintain profits (Schweig, 2005). The change in
customers' habits or lifestyles, together with the development, is the point of
the marketing strategies and menu offerings modifications. With leap in
technology, Pizza Hut can grow its business through customer experience,
process efficiency, and online presence blooming. The law includes rules
regarding labour, intellectual property, and grubbing labels, which can be
considered aspects of a corporation's operations and reputation.

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Environmental factors, including climate change and sustainability, can affect

on to its supply chain and operations.
Conclusion
To conclude, the Pizza Hut PESTLE Analysis highlights the various elements
impacting their business performance. This understanding helps to evaluate
the criticality of external business factors for any brand.

References
Abidin, U.F.U.Z., Mutalib, N.A.A., Bakar, A.Z.A. and Khairatun, S.N., 2021.
Handbook of research on food safety practices in the restaurant industry. IGI
Global.
Allums, S., (2014). Designing mobile payment experiences: principles and best
practices for mobile commerce. " O'Reilly Media, Inc.".
Ascher, S., Gordon, J., Bongiovanni, I., Watson, I., Hermannsson, K., Gillespie, S.,
Sarangi, S., Biakhmetov, B., Bhargava, P.C., Bhaskar, T. and Krishna, B.B., (2024).
Trigeneration based on the pyrolysis of rural waste in India: Environmental
impact, economic feasibility and business model innovation. Science of The
Total Environment, p.170718.
Dinçer, H. and Yüksel, S. eds., 2019. Handbook of research on decision-making
techniques in financial marketing. IGI Global.
Edberg, M., 2022. Essentials of health, culture, and diversity. Jones & Bartlett
Learning.
Gassmann, O., Frankenberger, K., Choudury, M. and Csik, M., 2020. The business
model navigator: the strategies behind the most successful companies.
Pearson UK.
Kazmi, S.H.H., 2007. Marketing management: Text and cases. Excel Books India.

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Lusk, J.L., Roosen, J. and Shogren, J. eds., 2011. The Oxford handbook of the
economics of food consumption and policy. Oxford University Press.
Parnell, J.A., 2013. Strategic management. Sage.
Perera, R., 2018. The Pestle Analysis. Amazon Digital Services LLC - Kdp.
Rahman, M.R., Yun, C.M. and Bakri, M.K.B. eds., 2022. Waste Materials in
Advanced Sustainable Concrete: Reuse, Recovery and Recycle. Springer Nature.
Ryan, C. and Page, S., 2012. Tourism management. Routledge.
Simakova, I.V., Strizhevskaya, V.N., Perkel, R.L. and Rakhmanova, G.Y. eds., 2022.
Global Production and Consumption of Fast Food and Instant Concentrates. IGI
Global.
Staaf, D.V. and Pojasek, R.B., 2023. Organizational Sustainability and Risk
Management: A Practical Step-by-step Guide. CRC Press.
Stalley, P., 2010. Foreign firms, investment, and environmental regulation in the
People's Republic of China. Stanford Varghese, A. and Ismael, I., 2018. An
analysis of delivery services at Hell Pizza. University Press.

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