Pizza Express: Strategic Analysis of Business Environment & Issues

This report provides a comprehensive analysis of Pizza Express, a well-known restaurant chain, focusing on its business environment, organizational structure, and key challenges. It begins with an overview of the company's history and global presence, followed by a PESTLE analysis to evaluate the macro-environmental factors influencing its operations, including political, social, technological, environmental, and legal aspects. The report identifies the company's strengths, such as competitive pricing and global presence, and weaknesses, including inconsistent promotional strategies and customer service issues. It examines the interrelation of these strengths and weaknesses with the external business environment. Furthermore, the report discusses Pizza Express's horizontal organizational structure and its impact on communication and decision-making. The central issue of financial management, particularly the burden of debt, is highlighted, along with changing customer habits. The report concludes with suggestions for mitigating financial risks, such as seeking expert financial advice and utilizing government schemes like the Recovery Loan Scheme. Ultimately, the report emphasizes the importance of analyzing both internal and external business environments for sustainable growth.

Introduction to Business
and Management

Table of
Content
• Introduction
• Overview of the company
• Macro Environment
• Key Strengths and Weaknesses of the business
• Interrelations of Strength and Weakness with
External Business Environment
• Organizational Structure
• Current Issue which are faced by the Business
• Suggestion for the solution of the problem
• Conclusion
• References

Business management is the practice of managing all
business activities in such a way which will help an
organization to achieve their goal. It is essential for every
organisation to focus on their internal and external business
environment and find out the positive and negative impact
from this environment of the business.
Introduction

Overview of the
Company
The first restaurant of Pizza Express was opened in London's
WardourStreet. Currently it has 470 stores in UK and it has also expanded
its business in Europe, Hong Kong, China, India, Singapore, Saudi Arabia
and few other countries. It has more than 14,000 employees around the
world (Annual report and financial statement, 2018). In the year 2020,
the business was owned by group of bondholders under a debt-for-equity
this will help the company to grow well.
In the year 2008, the company invited Theo Randall
who is one of the most popular chef for Pizza dishes
and he helped the company to curate the menu by
offering various pizza dishes to their customers. In
the year 2010, Francesco Mazzei, of L'Animacame
to curate their menu which is inspired by cuisine of
Calabria.

Macro Environment
PESTLE analysis is used to identify those external
factors which can impacts upon decision making process
of a company. PESTLE analysis of Pizza Express is
mentioned below-
• Political factors- It consist of trading rules and
regulations, fiscal policy, interest rates,
government stability and many others political
factors of a country. In context of UK, they are
having less restricted trading barriers which
further help Pizza Express to start a chain of
their company in other country.

Macro Environment
• Social factors- It consist of perception of
customers toward the products and services
offered by the companies, population growth
rate, their lifestyle, career attitude and few
others. In context of UK, 86% of UK's
population uses internet on regular basis (UK
CONSUMER BEHAVIOR: WHAT DO THE
BRITISH WANT?, 2022).
• Technological factors- Using high quality of
technology help the companies to improve their
productivity and profitability.

Macro Environment
• Environmental factors- Whether, climate, waste
management, CSR and sustainable activities are
the examples of environmental factor. Pizza
Express has appointed SWC over 300 restaurants
in UK for managing their waste management
activities and recycling them appropriately
(PizzaExpress opts for SWR, 2015).
• Legal factors- It is essential for every company
to follow legal rules and regulations in their
nation. In context of UK, Food Safety Act 1990
states that restaurants are not allowed to add
anything in their food items which can impact
negative upon the health of their customers (Food
Standards Act 1999, 2020).

Key Strengths and Weaknesses of the
business

Weaknesses
• They are having improper promotional strategies which can
impact upon their profit.
• They are having standardised production methods for their
pizza which means same kind of pizza are sold for longer
period of time and it makes their customers unsatisfied
because there is no introduction of new variety of Pizza.
• Most of the complaints for the restaurants are arrive due to
the harsh behaviour of their employees toward their
customers which declines their brand image in market.
• Pizza Express has lower prices as compared to their
competitors such as Pizza hut, Domino's and many others.
This help them to attract more customers (Domino's 'gourmet'
v Pizza Express, 2022).
• Their popularity among their customers will further help them
to expand their business well.
• Global presence of the Pizza Express restaurants will help
them to make their product more popular. They expanded to
various countries like China, India, South Arabia and many
others.
• The quality of pizza which they offer to their customers are
also considered as their biggest strength for their international
growth. This will further help them to gain high brand
reputation in market.
Strengths

The external business environment of Pizza Express is related
to their strengths and weakness in following ways-
• Due to the political factor of UK, the pricing regulation of
the nation restricts Pizza Express to set high prices of their
products. Hence, they have appropriate pricing strategies
for their Pizzas and other eatable products. Their prices are
lower than their competitors which further help them to
gain competitive advantage.
• On the other hand, the strength of their global presence will
help them to grow well. This becomes possible due to less
restriction on trading activities of UK. Hence, the strength
of Pizza express related to their global presence is
interrelated with political factor of UK.
Interrelations of Strength and
Weakness with External
Business Environment

• Pizza Express Company has horizontal organizational
structure which is also called flat hierarchy.
• Here, there is few or no middle level of management
between staff and executives.
• The main feature of this organizational structure is that it
has few levels of management which helps workers to
directly report to higher level of management authorities
(What is a Flat Organizational Structure? 2021).
• This organizational structure will help the company to
maintain good relationship between their workers and
management team.
• This organizational structure also benefits the company for
understanding the issues well and make quick decision to
mitigate the issue without consuming time in directly
communicating with employees.
Organizational Structure

• The main issue of Pizza Express is related to management
of their financial activities. The company is required to pay
a huge amount of its debt to banks.
• Every year leveraged buyout leaves the company with huge
debt bill.
• On the other hand, changing customer habits also impacted
upon the profitability of this company. Environment for
Pizza Express become more challenging due to changing
customer trends in market regarding food industry.
• The issue of financial management is one of the biggest
issues of the mentioned company which they have faced
over the decades.
• In the year 2014, Hony Capital was given responsibility to
manage whole company (Pizza Express Suffocates Under a
Mountain of Debt, 2020).
Current Issue which are faced
by the Business