Pizza Hut's Market Entry and Implementation Strategy in Laos

This report provides a comprehensive analysis of Pizza Hut's potential for market entry and expansion in Laos. It begins with an introduction to Pizza Hut and outlines the report's purpose: to assess the business environment, internal resources, and suitable entry strategies. The report employs a PESTLE analysis to examine the political, economic, social, technological, legal, and environmental factors influencing Pizza Hut's business in Laos, followed by an exploration of Laos's culture, ethics, and norms using Hofstede's cultural dimensions. An internal environment analysis, utilizing the VRIO framework, evaluates Pizza Hut's resources and capabilities. The report then considers different market entry strategies, recommending a specific approach and detailing an implementation plan, including key processes, a timeline for store opening, and an organizational structure. The conclusion summarizes the key findings and recommendations, emphasizing the importance of adapting to the local environment for successful business operations. The analysis highlights the opportunities and challenges Pizza Hut faces in Laos, offering insights into how the company can leverage its strengths to succeed in the market.

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

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From the above chart, it can be stated that precipitation is average in Laos. It shows that Pizza
Hut has chances to expand their business in Laos due to favorable climate changes. Pizza Hut
can also expand its CSR strategies to arrive at the higher performance in identifying the
environmental issues. But, climate change may remain to threaten for pizza hut as it may
negatively impact on farms and supply chain of Pizza Hut (World bank, 2018).
2.2 culture, ethics, and Norms
The following chart shows the culture of Vietnam that is capital of Laos:
Culture of Laos

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Power Distance
In Laos, an individual accepts a hierarchical structure in which an individual has placed and that
needs no further explanation. Hierarchy in the organization is demonstrated as imitating inherent
disparities. In this structure, centralism is standard and assistants predict to be told what to do
and the ideal superior is a benevolent autocrat. Along with this, experiments of leadership are not
properly received (Trading economics, 2018).
Individualism
Laos is a collectivistic society as it can be favorable for Pizza hut to expand their business. It is
visible in a long-term pledge to member group, lengthy family, and relationship. Faithfulness in
a collectivist philosophy is leading and prevail the social rules and regulations. These societies
focus on enhancing the relationship in which each person takes accountabilities to fellow
members of their group (Hofstead insight, 2018). In collectivistic societies, offense directs to
indignity and face loss. Along with this, the association between company and employees are
observed in ethical terms, elevation, and signing and take account of in-group.
Masculinity

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Laos is measured as a society of feminine. Under the womanly nations, the emphasis is on
working in order in live. Furthermore, persons value cohesion, impartiality, and quality in their
working lives. Along with this, managers strive for harmony. Conflicts are determined by
negotiation and compromise. Incentives like flexibility and free time are favored by business in
Laos. Further, the focus is on well-being and status is not demonstrated by business. Hence, the
manager should be supporting one as well as decision making can be attained by involvement
(Hofstead insight, 2018).
Uncertainty Avoidance
Laos in this dimension shows the low partiality for avoiding insecurity. Low UAI philosophies
keep relaxed attitudes wherein performance shows over principles and deviance as compared to
tolerated norms. Furthermore, in low UAI, individuals trust that there should be no more rubrics
as compared to essential rules. Along with this, when people are ambiguous and do not perform
well then should be replaced within the business. Schedules are flexible as well as hard work is
carried out when required but not for its own intention. Furthermore, it is assessed that exactness
and promptness do not come obviously and novelty cannot be seen as threatening (Hofstead
insight, 2018).
Long-Term Orientation
Laos is a practical philosophy. Societies with practical location believed that truth relied on
different circumstances, time as well as context. People demonstrate a competency to adapt the
tradition easily to change the condition and strong tendency to save as well as invest. Moreover,
perseverance and thriftiness are used to accomplish the objective and attain the outcome
(Hofstead insight, 2018).
Indulgence

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A low score in this dimension shows that culture of Laos is demonstrated as Restrained. Under
this dimension, societies have a tendency to pessimism and cynicism. In opposed to this,
restrained societies do not put the focus on leisure time and control the fulfillment of their
desires. People with this dimension have a belief that their performance is restrained by social
norms (Hofstead insight, 2018).
Ethics of Laos
In Laos, promptness is valued, and frivolous suits, shirt, and tie should be worn. Further, English
is not spoken by officials and understanding of French is beneficial for commercial. Moreover,
business cards might have Laotian conversion on the converse. As a result, it would be favorable
for Pizza hut to extend their business in Laos (Chatzoglou, et al., 2018).
Norms of Laos
There are the different norms in Laos that could be effective for enlarging their business.
Business association is Laos is not as formal as those in other East Asian nations and is often
relied on personal relations built within social circles. Furthermore, the personal relationship is
high and having a reliable and well-linked local agent and representative is significant for the
success of pizza hut (Indartono and Wibowo, 2017). Along with this, event progress is slow in
Laos in which step by step strategy and cultural premium is required. Representatives of U.S
nation is looking to penetrate into the Lao market and also processes to move slowly. Thus,
norms of Laos are favorable for Pizza hut for enlarging their business.
3. Internal environment analysis
Value
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resource-
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