Strategic Management of Pizza Hut: SWOT, TOWS and PESTEL Analysis

This report provides a strategic management analysis of Pizza Hut, including SWOT, TOWS and PESTEL analysis. It evaluates the internal and external environment of the company, identifies key competitors, and discusses two relevant issues. The report also provides recommendations for the company to improve its position in the market.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has helped in analysis of the different kinds of external and internal environmental
analysis of Pizza Hut. Furthermore, the different kinds of evaluation of internal environment
has been done which helped in managing the various issues in an appropriate manner which
helped in managing the different kinds of issues efficiently. The different kinds of SWOT,
TOWS matrix and PESTEL analysis have been performed in which this has helped in
managing the issues efficiently.

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Table of Contents
Introduction................................................................................................................................5
Overview of Pizza Hut...........................................................................................................5
Vision and Mission................................................................................................................5
Product Offerings and Demand..............................................................................................5
Positioning Map.........................................................................................................................5
Key Competitors....................................................................................................................5
Position in the Market............................................................................................................6
Market Share Owned..............................................................................................................6
Criteria on Evaluation on positioning map............................................................................6
Positioning Map.....................................................................................................................7
TOWS Analysis.........................................................................................................................7
Discussion on Two Issues Relevant to Organization.............................................................8
Issue 1.................................................................................................................................8
Introduction of the Issue.....................................................................................................8
Identification of Issue in TOWS Matrix and Criticality of Issue.......................................8
Discussion on Issue............................................................................................................9
Recommendations..............................................................................................................9

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Issue 2.................................................................................................................................9
Introduction of the Issue.....................................................................................................9
Identification of Issue in TOWS Matrix and Criticality of Issue.....................................10
Discussion on Issue..........................................................................................................10
Recommendations............................................................................................................11
Identification of Internal and External Environment Analysis................................................11
SWOT Analysis...................................................................................................................11
Evaluation of Internal Environment.........................................................................................12
Discussion of SWOT Analysis.............................................................................................13
PESTEL Analysis.................................................................................................................14
Conclusion................................................................................................................................16
References................................................................................................................................17

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Introduction
Overview of Pizza Hut
Pizza Hut is the American restaurant chain along with international franchise which
was founded in the year 1958 by Frank Carney and Dan. The respective restaurant is known
for the Italian-American cuisine menu which is inclusive of Pizza and pasta along with
different side dishes and other desserts("Pizza Hut | Pizza Delivery & Takeaway - Order
Online Or In-Store", 2018). The companyhas their outlets in more than 19796 locations and
this is a subsidiary of Yum! Brands which is one of the largest restaurant companies.
Vision and Mission
The mission is to make perfect kind of pizza along with providing helpful and
courteous service on time and all the time. The main mission is to become the most favourite
restaurant in all over the world. The vision is to reach on the top of peak to provide the best
service along with taste which will help the company in becoming famous in all over the
world.
Product Offerings and Demand
The different products offerings of Pizza Hut include the different kinds of pizzas
such as pan pizza, sausage crust pizza, beverages along with appetizers. Pizza Hut products
are of huge demand in the entire industry wherein the revenues which have been earned by
the company has increased from 2014 to 2016 to about $7 billiondollars and this has helped
the company in earning huge profitability in the organization.

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Positioning Map
Key Competitors
The major competitors of Pizza Hut includesMcDonald’s, Subway, Taco Bell, Papa
john’s Pizza along with KFC.
Position in the Market
Pizza Hut provides the high-quality pizzas along with other desserts to the customers
in the entire market. The company uses the positioning strategy which is value based in
nature which helped in creating everlasting image in the entire minds of the different
customers in the market (Rothaermel, 2015).
Market Share Owned
The market share which has been owned by the Pizza Hut is 14.1 percentage of the
market share surpassing Domino’s in the market. The company is trying to improve their
position in the competitive market till the year 2017.
Criteria on Evaluation on positioning map
From the positioning map, this can be analysed that Pizza Hut has tried to position
themselves in the slot of high price and high quality in the entire competitive market.
Furthermore, this has been noticed that the quality which is being provided by Pizza Hut is
huge and this helps the company in gaining competitive advantage (Hill, Jones& Schilling,
2014).

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Positioning Map
Figure 1: Perceptual Map of Pizza Hut
(Source: Created by author)
TOWS Analysis
Strengths Weaknesses
Opportunities
Strong brand recognition
Produce high perceived kind of
value (Bettis et al., 2015)
Produce different kinds of high
quality food items with nice
kind of packaging
Launching new kinds of
products
Low cost menu
Threats Provide high value chain other Benchmark with the other
kinds of competitors in the

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than the different competitors
Make moderate kinds of
changes as per the needs of the
different customers
market
Limited number of food items
and this is not nutritious
Discussion on Two Issues Relevant to Organization
The two major issues which are being faced by Pizza Hut is inclusive of the following:
Issue 1
Introduction of the Issue
Focus by the Consumers on Nutrition is one of the major issues which is being
faced by Pizza Hut wherein the consumer activists and health nutritionists accuse Pizza Hut
of contributing to the health issue of the company which is inclusive of the heart related
issues and obesity (Bettis et al., 2015). Furthermore, there are other major competitors of
Pizza Hut which is inclusive of Domino’s and McDonald’s which can create huge pressure
on the respective company as these competitors are trying to introduce various food items
which are healthy in nature and provides the different customers with various kinds of food
items which are high on nutritional value.
Identification of Issue in TOWS Matrix and Criticality of Issue
The particular issue fits in the TOWS matrix of Pizza Hut in which this will be falling
under WT Strategy or matrix (Weaknesses and Threats). The respective issue can be a huge
concern for Pizza Hut as this will directly affect the profitability of the company and this can
lead to fall of the amount of revenues as well.

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Discussion on Issue
The main issue which has been faced by the company is the health concerns of the
different individuals in the market. This has been noticed that in the present era, the
consumers are health conscious and they are preferring low calorie food for themselves
(Robson, 2015). This is the major factor which can create huge trouble for the company
which is inclusive of the following:
Effect on Brand Image of Pizza Hut
This respective issue can create huge issue on the brand image of the company as this
has been seen that Pizza Hut has been criticized in the past for the food which is being
prepared by them. The amount of cheese and other fatty items are being provided with Pizza
has affected the health of the teenagers and this has created huge effect on the health of the
different individuals as well. Furthermore, this has been noticed that goodwill of the company
has been affected due to the same (Ginter, Duncan & Swayne, 2018).
Recommendations
Therefore, this can be recommended that Pizza Hut needs to introduce various kinds
of food items which will be oil free and nutritious in nature as this has been done by the other
competitors in the market. Furthermore, the company needs to introduce a new set of food
items which will be effective for them in becoming more effective in the competitive market.
Issue 2
Introduction of the Issue
This is the second issue which is being faced by Pizza Hut in the past as due to the fall
in the brand image of the company (Lasserre, 2017). In the past, due to the criticism which
was being faced by Pizza Hut affected the profitability and revenue of the company in a

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negative manner. Moreover, this was noticed that there has been fall in the prices of the share
in the competitive marketing environment which led to decline in the sales of the food items
in the market as well.
Identification of Issue in TOWS Matrix and Criticality of Issue
The respective issue is being found in the TOWS matrix in the ST strategy (Strength
and Threat) in which this is the major threat is that the company has affected the overall
revenues of the company and this has created huge impact on the brand image of the
company as well (Morschett,Schramm-Klein &Zentes, 2015). Furthermore, this has been
noticed that the threat can be taken into strength by the company by implementing various
kinds of benchmark in comparison to the different other competitors in the market.
The following issue is critical in nature for Pizza Hut as this will create huge issues in
the profitability of the company. When there will be decrease in the profitability of the firm,
this will affect the overall effectiveness of the firm in a negative manner which will lower the
number of customers in the entire market as well (Morden, 2016).
Discussion on Issue
The major issue which has been discussed is related to the negative effect on revenues
and profitability of the firm in a negative manner. This has been noticed that the company has
faced huge crisis in the entire market wherein this has strong level of competition in the
market and this has affected the value among the different customers in the market as well.
Effect on Revenues and Profitability of Pizza Hut
Furthermore, this can be noticed that the respective issue is one of the major threats
for Pizza Hut in which this has led to reduction in the growth of Pizza Hut as well. Moreover,
due to the reduction in the profit and revenues in the market, this has reduced the various

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kinds of operations in the market in such a manner which has affected the entire brand
reputation in the competitive market.
Recommendations
Therefore, from the above this can be recommended that Pizza Hut needs to analyse
the moves of the various competitors in the entire market. This can be analysed that Pizza
Hut has various other competitors such as McDonald’s and KFC which have introduced
different kinds of nutritious food items which can create huge negative impact on the overall
profitability of the firm.
Identification of Internal and External Environment Analysis
SWOT Analysis
Strengths
The company has huge brand image and high
brand loyalty
There are more than 150000 people who are
being employed with Pizza Hut
(Trigeorgis&Reuer, 2017)
Hygienic kind of preparation of food along with
quick service
Sound kind of financial situation
Weaknesses
Franchise kind of management along with
quality of service is a massive kind of
challenge (Höglund, Holmgren
Caicedo&Mårtensson, 2018)
There are many options available for the
customers which means switching of the brand
and the limited kind of market share
Opportunities
New Pizzas along with food preparation with
various kinds of flavours (Christopher, 2016)
Threats
Threats from the different competitors can

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Venture more into the home delivery
Pizza Hut can venture into the newer markets
decline the market share of the company
Health conscious individuals can decline the
market share of Pizza Hut (Ferlie et al., 2016)
Rising prices of special kind of ingredients can
affect the prices of pizzas
Evaluation of Internal Environment
Internal Analysis Strengths/Weaknesses Explanation of Factor
Organizational Structure Strength The organizational structure is
strong and this is one of the
strengths as there are various
franchises of the company and
approximately more than
34000 restaurants (Hill, 2017)
Financial Resources Weakness Due to the criticism faced by
the company in the past, Pizza
Hut faced huge los of
profitability in the firm in a
negative manner (Steinbach et
al., 2017)
Human Resources Strength The human resource of the
company is effective as the
compensation along with the
employee benefits are being
provided in a positive manner

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to the company
Other Resources (Physical or
Technological Resources)
Strength The other resources such as
technological advancements
are strong in nature in which
this has been noticed that the
company tried to focus on the
different methods which were
ineffective in nature
Discussion of SWOT Analysis
With the help of SWOT Analysis of Pizza Hut, this can be analysed that:
Strengths- The main strength of the company is on the products and services provided
by them. The continuous kind of development efforts of the restaurant helps in providing
healthy pizza to the customers and this has been found that part of the target customers is
health conscious in nature.
Weaknesses-The lack of suppliers and the supply of cheese is the major concern for
Pizza Hut. The company has suffered from high cost due to the production and there are other
competitors in the market which is affecting brand image and goodwill of the company
negatively.
Opportunities-There is innovation of the product at Pizza Hut which can help the
company in increasing the overall revenues of the organization. With technological
advancements, this will increase the overall profitability of the firm.

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Threats-The major threats which can be faced by pizza Hut is the huge competition
from the different competitors such as KFC and McDonald’s and this will create huge
pressure on goodwill of the firm.
PESTEL Analysis
PESTEL
Analysis
Opportunity/
Threat
Explanation of Factor Source
Political Opportunity Increasing
international kind of
trade agreements
Evolving public health
policies
https://economictimes.indiatimes.com/
industry/cons-products/food/pizza-hut-
marks-out-india-as-a-key-market-for-
global-growth/articleshow/61821195.cms
Economic Both
Opportunity and
Threat
Rapid growth rate of
the different
developing countries
Slowdown of the
economy of the
Chinese market
Slow along with stable
growth of the
developed countries
Samnani, A. (2014). Macro-
environmental factors effecting fast food
industry. Food Science and Quality
Management, 31, 37-40.

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Social Both
Opportunity and
Threat
Rising disposable
incomes
Health lifestyle trends
Increasing cultural
diversity
Samnani, A. (2014). Macro-
environmental factors effecting fast food
industry. Food Science and Quality
Management, 31, 37-40.
Technologi
cal
Opportunity Moderate R&D
activity in the entire
industry
Increase in sales
through mobile devices
Samnani, A. (2014). Macro-
environmental factors effecting fast food
industry. Food Science and Quality
Management, 31, 37-40.
Legal Both
Opportunity and
Threat
Rising legal wages
which is minimum
(Ethiraj,Gambardella&
Helfat, 2016)
Increasing regulations
related to health in
schools and
workplaces
Samnani, A. (2014). Macro-
environmental factors effecting fast food
industry. Food Science and Quality
Management, 31, 37-40.
Environme
ntal
Both
Opportunity and
Threat
Changes in the climate
in some regions
Rising in the interest of
the corporate
environmental
Samnani, A. (2014). Macro-
environmental factors effecting fast food
industry. Food Science and Quality
Management, 31, 37-40.

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programs
Conclusion
Therefore, this can be concluded that the entire report helped in the entire analysis of
the external and internal environment analysis of the Pizza Hut. Furthermore, the internal
environmental analysis has been conducted along with TOWS matrix which helped in
analysing the strengths, weaknesses, opportunities along with threats which have been faced
by the company and this has affected the company in both positive and negative manner.

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References
Bettis, R. A., Gambardella, A., Helfat, C., & Mitchell, W. (2015). Qualitative empirical
research in strategic management. Strategic Management Journal, 36(5), 637-639.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Ethiraj, S. K., Gambardella, A., &Helfat, C. E. (2016). Replication in strategic
management. Strategic Management Journal, 37(11), 2191-2192.
Ferlie, E., Crilly, T., Jashapara, A., Trenholm, S., Peckham, A., & Currie, G. (2016).
Strategic management in the healthcare sector: the debate about the resource-based
view flourishes in response to recent commentaries. International journal of health
policy and management, 5(2), 145.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health
care organizations. John Wiley & Sons.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Hill, T. (2017). Manufacturing strategy: the strategic management of the manufacturing
function. Macmillan International Higher Education.
Höglund, L., Holmgren Caicedo, M., &Mårtensson, M. (2018). A balance of strategic
management and entrepreneurship practices—The renewal journey of the Swedish
Public Employment Service. Financial Accountability & Management.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher
Education.

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Morden, T. (2016). Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H., &Zentes, J. (2015). Strategic international
management (pp. 978-3658078836). Springer.
Pizza Hut | Pizza Delivery & Takeaway - Order Online Or In-Store. (2018). Retrieved from
https://www.pizzahut.com.au/
Robson, W. (2015). Strategic management and information systems. Pearson Higher Ed.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Steinbach, A. L., Holcomb, T. R., Holmes Jr, R. M., Devers, C. E., & Cannella Jr, A. A.
(2017). Top management team incentive heterogeneity, strategic investment behavior,
and performance: A contingency theory of incentive alignment. Strategic
Management Journal, 38(8), 1701-1720.
Trigeorgis, L., &Reuer, J. J. (2017). Real options theory in strategic management. Strategic
Management Journal, 38(1), 42-63.