|Industry||Fast Food Chain|
|Headquarters||Plano, Texas, United States|
|Revenues||USD 6.44 Billion, 2021|
|Profit||USD 1.58 Billion, 2021|
|Competitors||Burger King, Papa John’s Pizza, Dominos, Tim Horton’s|
Headquartered in Texas, United States, Pizza Hut is a multinational fast-food chain, operating since 1958. Dan Carney and Frank Carney laid the foundation of Pizza Hut in Plano, Texas. The main products and services of Pizza Hut are a variety of pizza, including Stuffed Crust pizza, Hand-tossed, Pan pizza, Dippin Strips pizza, and many others, along with some side dishes, such as pasta. According to Yahoo Finance (2021), the company has a market capitalization of $ 37.262 billion, making it one of the renowned companies all over the world. Let’s go over the detailed SWOT Analysis of the company.
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Pizza Hut Strengths 2021:
- Global Existence.
Pizza Hut is a worldwide corporation with operations in over 18,703 locations throughout the world. With 350,000 employees, it now has a presence in over 120 countries (US Securities and Exchange Commission, 2019). Customers’ brand recognition and loyalty have increased as a result of this presence.
- Advertisement Through Sponsoring International Events.
Pizza Hut has sponsored many international events, including sports, movies, festivals, and so, in order to increase its brand awareness. In 2018, Pizza Hut took over the sponsorship of the National Football League from Papa Johns after eight years and proved a big hit (Kelso, 2019). According to an estimate, customers ordered 5,000 pizzas a minute during the peak time on Super Bowl Sunday and total received orders of 6 million wings in a day, leading to higher sales.
- Innovative Product Line.
Pizza Hut is a highly creative and innovative brand, offering a wide range of pizzas to its customers under a single brand name. It offers both vegetarians and non-vegetarians pizzas as well as quick services and hygienic food to vast customers.
- Strong Group Performance.
Pizza Hut is a subsidiary company of well-recognized international brand, Yum Brands Inc., which has a strong financial position. It earned a total revenue of $ 6.44 billion in 2021, in comparison to $ 5.65 billion in 2020, showing 14% in total sales in a year. Moreover, it has a strong financial position, having an asset of $ 5.85 billion in 2020 then $ 5.23 billion in 2019 (Yahoo Finance, 2021a). Due to this, Pizza has strong group support to finance its operations.
- Introduction of Latest Technologies.
Pizza Hut has recently introduced a white-labeled mobile application and a CRM system for analysing the customer’s behaviour and performing marketing campaigns. This allowed Pizza Hut to retain its customers, even the number of its social media followers were increased by 50%, and received above 12,000 validated accounts per restaurant (HospitalityTech, 2017).
Pizza Hut Weaknesses 2021:
- Declining Market Share.
The fast food industry has become highly competitive over the past few years. Customers now have a variety of options for the same type of meal, therefore brand switching has become quite easier and common in this market, leading to the lower market share of Pizza Hut. According to Edison (2020), Domino’s has taken over 50% of the pizza market share, while Pizza Hut has only 29%, which is must lower.
- Franchising Business Model.
Pizza Hut is currently operating under a franchising business model, which has allowed the brand to quickly establish a global presence. However, one of the key faults of the franchising method is that the Franchisee has complete authority over the branch, and Pizza Hut’s main management is unable to participate in management. As a result, customers may experience quality concerns, affecting the company’s overall image.
Pizza Hut Opportunities 2021:
- Expansion Opportunities.
Currently, Pizza hut is operating in more than 120 countries of the world, but there are many markets, particularly in the developing countries, such as Asia, where Pizza Hut can obtain the market share. The company can get more benefit from a densely populated market, in order to increase its growth potential.
- Market Growth.
According to Business Wire (2020), the global fast-food chain market is expected to grow by 4.6% from 2020 to 2027, reaching $ 931.7 billion, showing that the market has a great potential to grow in the future. This will allow Pizza Hut to gain market share and boost its sales in the near future.
- Innovations in Home Delivery.
Nowadays, companies are adopting various innovative techniques to deliver their products to customers. Owing to social distancing in COVID-19, many companies shifted to drone delivery services, which allowed the companies to deliver food safely and cost-effectively. According to Koetsier (2021), drone delivery services are 90% cheaper than car-based services, therefore Pizza Hut can use such services to deliver their foods too.
Pizza Hut Threats 2021:
- Rising New Entrants Threat.
The fast food industry has become highly competitive with each passing day, as many new entrants are keeping entering into the market with innovative products, which has put threat to the existing brands for retaining their high market share.
- Growing Health Concerns.
Owing to growing health awareness, people have become more conscious about their health that leads them to different diseases, such as heart problems, high blood pressure, and fats. Such a trend is not good news for Pizza Hut, as it may affect its sales in the coming future.
- Multiple Regulations Compliance.
Pizza Hut operates in a variety of countries, and as a result, it may be subject to varying legislation and compliance requirements depending on the location of its shop. Furthermore, Pizza Hut has received a lot of criticism in recent years for incorporating excessive food sales, so the corporation should be cautious about health rules.
Pizza Hut SWOT Analysis Conclusion:
In conclusion, Pizza Hut is a global fast-food chain brand, operating in more than 120 countries of the world. Due to providing sponsorships in many international events and a wide range of product portfolios, Pizza Hut has managed to obtain customer loyalty and spread brand awareness globally. However, the fast-food industry has become highly competitive due to main entrants, putting risk on the future existence of the company. Also, people have become more health-conscious, leading to lower sales in the coming future.
- Business Wire, 2020. Fast Food Industry Analysis and Forecast 2020-2027 – ResearchAndMarkets.com.
- Edison, 2020. Domino’s takes 50% of the pizza delivery market, leading Pizza Hut (29%) and Papa Johns (21%). Medium.
- HospitalityTech, 2017. How Pizza Hut Drives Customer Engagement with Its Mobile Loyalty Program.
- Kelso, A., 2019. Pizza Hut Won New Customers With NFL Sponsorship. Here’s What’s Planned For Year Two. Forbes.
- Koetsier, J., 2021. Drone Delivery Is Live Today, And It’s 90% Cheaper Than Car-Based Services.Forbes.
- Lock, S., 2021. Pizza chains in the U.S. with the highest sales 2019. Statista.
- US Securities and Exchange Commission, 2019. FORM 10-K.
- Yahoo Finance, 2021a. Yum! Brands, Inc. (YUM).
- Yahoo Finance, 2021. Yum! Brands, Inc. (YUM).