Global Business: Analysis of Pizza Hut's Market Entry Strategy in Laos

Running head: GLOBAL BUSINESS
Global Business

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Table of Contents
1. Introduction..................................................................................................................................2
Background of Pizza Hut.............................................................................................................2
Purpose of report..........................................................................................................................2
2. Business environment analysis....................................................................................................2
2.1 PESTLE analysis....................................................................................................................2
2.2 culture, ethics, and Norms......................................................................................................8
3. Internal environment analysis....................................................................................................11
3.1 Resources.............................................................................................................................15
3.2 Capabilities...........................................................................................................................16
4. Entry strategy.............................................................................................................................17
Evaluate difference strategy.......................................................................................................17
Selection of one strategy............................................................................................................18
5. Implementation..........................................................................................................................20
Key process................................................................................................................................20
Timeline to Store Opening.........................................................................................................22
Organizational structure.............................................................................................................23
Conclusion.....................................................................................................................................25
References......................................................................................................................................26
Appendix........................................................................................................................................30

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1. Introduction
Background of Pizza Hut
Pizz Hut is an American bistro chain and international franchise initiated in 1958 by Frank
Carney and Dan. This organization is known for their Italian-American cuisine considering pasta
and pizza along with desserts and dishes. Moreover, Pizza Hut has more than 16,796 restaurants
at international level as it is largest pizza chain with respect to the locations. This organization is
a subsidiary of Brands and Yum. It is also one of the largest restaurant organizations (Pizza Hut,
2018).
Purpose of report
The key purpose of this report is to evaluate the situation of business to start their business in
Laos. This report presents the external analysis by using the PESTLE strategy. It also discusses
the culture, ethics, and norms of Laos. This report also demonstrates the internal analysis by
using the VRIO framework. It also evaluates the different market entry strategy. This report also
illustrates the feasible market entry strategy for Pizza hut in Laos. It also discusses the timeline
for implementing the chosen market entry strategy. In last, it demonstrates the organizational
structure of Pizza Hut.
2. Business environment analysis
2.1 PESTLE analysis
Political factor

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Laos is a collectivist nation which is directed by revolutionary party of Lao. As per the United
State branch, Laos is a exploitive state and a country of extraordinarily harsh supervision control.
Laos will demonstrate no meaningful political modification in 2018-19 as one-party rule by the
revolutionary party. Laos is generally a passive and politically stable nation. The uncertainty of
political violence is directed by a foreign company and business person is low (Facts and details,
2018).
In this way, Pizza Hut has the chances to make bigger the business in Laos due to effective
international trade as it can improve supply chains. The company will have chances to modify its
approaches to decline the effect of taxation on the corporate without violating specified law. But,
PHP (public health policy) gradually will tend to discourage an individual from consuming fast
food organizations like Pizza Hut. The company will have the chances to address the external
factor by enhancing the healthfulness of their products (Export.gov, 2018).
Economic factor

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It is stated that GDP rate is high i.e. 15.9 in Laos. Furthermore, foreign direct investment is
543.59 as well as the unemployment rate is 0.7 in Laos. In this way, it is evaluated that Pizza Hut
has the chances to expand, even slowly, in Laos, which is the biggest market in the company.
However, the existing economic circumstances in Laos can threaten the growth of Laos in this
region. Along with this, the slowdown of Laos market can threaten the growth of the company in
Laos (Export.gov, 2018).
Social factor
Pizza Hut has the chances to grow their business as the company targets the consumers highly
from the medium and low-income households. As a result, it has possibilities to enhance their
products mix due to persuading further different target marketplace. Healthy lifestyle tendency
can be threat for business as different Pizza hut goods are criticized for their adverse health
effects. But, Pizza Hut has chance to enhance the healthfulness of their goodss (The global
economy.com, 2018).
Technological factor

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From the above chart, it can be stated that competitiveness is low in Laos as it can provide the
opportunity to Pizza hut to extend their business in Laos. Furthermore, it is stated that research

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and development expenditure is increasing in Laos that is favorable for pizza hut for expanding
business in Laos. Along with this, Pizza Hut has the chances to enhance its research and
development investment in order to improve efficiency and effectiveness of business. Pizza hut
can implement more automation in order to increase the productivity as in Laos, business
automation is increasing (Trading economics, 2018). Moreover, Pizza hut can enhance its mobile
facilities to increase consumers through its websites and mobile app in Laos.
Legal factor
The Lao labor market is very rigid due to a shortage of labor at all phase as it could be
unfavorable for Pizza Hut. The minimum wage is determined by separate regulation. The new
law developed regarding occupational health and safety standard, however, inspections remain
conflicting. As a result, labor standard like minimum wage as well as health and safety standards
should apply uniformly in spite of investment vehicle and use of special economic zone (Trading
economics, 2018). During 2016, the government continues to perform on new regulation
associated with labor dispute resolution mechanism. It can be unfavorable for Pizza hut for
expanding the business in Laos.
Pizza hut will face the threat of higher minimum wage that leads to higher expenses and prices.
In addition, local health regulations can impact on the food services in the workplaces. School
can decline the revenue of company from these areas. Moreover, Pizza hut should identify the
animal welfare supervisory effects on their supply chain. For illustration, pizza hut can apply
different policies to make sure animal safety between meat creators (Trading economics, 2018)
Environmental factor