SWOT analysis of Pizza Hut
This is a detailed SWOT analysis of Pizza Hut. It aims to examine the strengths and the weaknesses of Pizza Hut. It also aims to examine the opportunities the company should explore, and the threats it should keep an eye on. Pizza Hut was founded in Wichita, USA in 1958 by two brothers Dan and Frank Carney. It came to the United Kingdom in 1973.
Strengths of Pizza Hut
Pizza Hut has a proud and long-standing history. In 1958, two Carney brothers borrowed $600 from their mother to open a pizza place in Wichita, Kansas. They named it Pizza Hut as their sign only had room for eight letters. The chain launched its first restaurant in the UK in 1973. Pizza Hut is nowadays a subsidiary of Yum! Brands, Inc., with over 18,000 restaurants in more than 100 countries. The sister brands are KFC and Taco Bell (Yum! Brands, 2019).
A sign of good relationships with the sister companies is the teaming up of Pizza Hut and KFC on National Pizza Day 9 Feb 2019 to create The Gravy Supreme, a fried chicken pizza with a Cheesy Bites base on top of a layer of KFC gravy. Some observers found it a monstrosity, but most found it brilliant.
The US chain participates actively in a donation program called Harvest and 100 million pounds of food has been donated since 1992. It also participates in the Food Waste Reduction Alliance working with all major stakeholders throughout the food system to implement solutions for food waste reduction. These participations increase the company’s corporate image.
Pizza Hut is a highly popular brand name and has a high brand loyalty. Most people find its food of high quality. The environment in Pizza Hut restaurants is also fantastic. Innovative range of pizzas for both vegetarians and non-vegetarians, hygienic food preparation and quick service make it an excellent place to enjoy foods and socialising.
Weaknesses of Pizza Hut
Pizza Hut’s UK arm has suffered financial losses several times in the last decade. For instance, it recorded £7million loss in 2017. Likewise, it suffered substantial losses for the third consecutive year in 2009. This shows that the company has failed to keep up with the dining-out aspirations of British people (Thompson, 2010). This poor performance is the main reason as to why Pizza Hut UK arm has been sold to its existing management team led by UK CEO Jens Hofma.
There seems to be a lack of consideration for vegan lifestyle eaters which was evidenced when a customer trying the restaurant’s new ‘Veganuary’ range was served ice-cream with milk in it and the bottles of toppings also had milk (Express, 2019).
There were issues with the Pizza Hut’s loyalty programme “Hut Rewards”, where customers’ accounts were hacked, and their allocated free pizzas stolen. The restaurant has not revealed when and how many customers have been affected. It is believed that the email address and password information of some of the customers were compromised.
Opportunities for Pizza Hut
Pizza Hut is collaborating with FedEx, specifically to explore the use of the FedEx SameDay Bot, a new autonomous delivery device aimed to revolutionize local delivery using technology-based solutions to navigate unpaved surfaces, curbs, and even steps to deliver an extraordinary door-to-door delivery experience.
Pizza Hut has decided to expand beer delivery to hundreds of restaurants across the United States. This will enable customers to order beer for delivery at nearly 300 restaurants across Florida, Iowa, Nebraska, North Carolina, Ohio, and two initial test markets California and Arizona. The restaurant has plans to expand the service further to 1,000 locations across new markets by the summer of 2019 (Taylor, 2019).
Threats to Pizza Hut
Threat is the last element to discuss in the SWOT analysis of Pizza Hut. In 2018, the biggest competitor Domino’s overcame Pizza Hut as the largest pizza company in the world and that has been achieved by using technology. Other main competitors of Pizza Hut are Romeo’s Pizza, Donatos, Round Table Pizza, Marco’s Pizza, Blaze Pizza, Illiano’s Pizza, Pizza West, Pizza Express, and Papa John’s Pizza.
However, the biggest threat for Pizza Hut UK are the numerous times the restaurant has been found guilty and fined for health and safety issues. Pizza Hut on St Helen’s Road, Swansea, Wales was fined £8,000 in April 2019 by the Swansea Magistrates Court for “extensive and active” mouse infestation in the premises. The outlet was also ordered with an immediate closure notice for public protection. The franchisee was to be blamed although it is the responsibility of the Pizza hut UK as the franchisor to check the standards.
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Last update: 23 August 2019
Bailey, C (2008) “Pizza Hut to become Pasta Hut” https://www.telegraph.co.uk/news/uknews/3145545/Pizza-Hut-to-become-Pasta-Hut.html (accessed 15 August 2019)
Express (2019) ‘My lifestyle was MOCKED’ https://www.express.co.uk/news/uk/1068407/vegan-uk-pizza-hut-ice-cream-veganuary (accessed 10 August 2019)
Hutlife (2019) “PIZZA HUT JOINS FORCES WITH FEDEX TO TEST THE FUTURE OF PIZZA DELIVERY” http://blog.pizzahut.com/pizza-hut-joins-forces-with-fedex-to-test-the-future-of-pizza-delivery/ (accessed 12 August 2019)
Knapman, H (2019) “Pizza Hut customers are having free pizzas stolen by a hacker” https://www.thesun.co.uk/money/9234637/pizza-hut-check-loyalty-accounts-hacker-steals-pizzas/ (accessed 16 August 2019)
Metro (2019) “National Pizza Day: KFC and Pizza Hut team up to make a gravy and …“ https://metro.co.uk/2019/02/09/national-pizza-day-kfc-pizza-hut-team-make-gravy-popcorn-chicken-pizza-8489391/?ito=cbshare (accessed 10 August 2019)
Taylor, K. (2019) Pizza Hut is going to deliver beer from hundreds of locations across the US, available at: https://www.businessinsider.com/pizza-hut-beer-delivery-to-expand-2019-1?r=US&IR=T (accessed 20 August 2019)
Thompson, J. (2010) Hat-trick of annual losses for Pizza Hut in the UK, available at: https://www.independent.co.uk/news/business/news/hat-trick-of-annual-losses-for-pizza-hut-in-the-uk-2062146.html (accessed 10 August 2019)
Yum! Brands, (2019) Pizza Hut, available at: https://www.yum.com/wps/portal/yumbrands/Yumbrands/company/our-brands/pizza-hut (accessed 19 August 2019)
Photo credit: Pixabay
Author: Veeren Gowrea
Veeren Gowrea is a lecturer in Tourism & Hospitality management. He holds an MBA in Strategic Management and MSc in Human Resource Management from the University of Wales, UK. He also holds a Postgraduate Certificate in Higher Education (PgceHE) from Birkbeck, the University of London. He works as a visiting lecturer at a number of institutes in London.