1. UCVC Assignment -1
Value ChainofPizza Hut
Pizza Hut is one of the best wide spread international fast food joint. It offers different styles
of pizza alongwith some side dishes like salads, pastas, buffalo wings/potato rings, breadsticks,
and garlic breads.It is a subsidiary of Yum! Brands(a Fortune 300 company), the world's
largest restaurant company.It is an American restaurant chain with more than 6,000 Pizza Hut
restaurants in the United States, and more than 5,600 store locations in 94 other countries and
territories around the world.It entered India in 1996, with its first branch in Bangalore and
expanding all over thereafter, creating a large customer base for itself.
Why Pizza Hut?:
Pizza Hut believes in making a perfect pizza with their extra ordinary menu and providing
hygienic, courteous and helpful service every single time and on time. So much so that all
customers just loves it and feels like coming again and again. Thus customers come in for
simply the best pizzas and also have a great dining time with the services offered by them
along with some good music (ambience) and comfortable sitting arrangement. Thus, Pizza
Hut believes in providing a memorable dining time to the customer, this makes the customer
‘happy’ and makes him come back again and again. Thus the basic marketing strategy of the
Pizza Hut is being customer centric providing the best service. Like in India, it provides with
customized menu as per the taste of the Indians, so that it can make the customer happy and
also has a check that all outlets should provide a uniform taste and holistic experience.
The value chain is a systematic approach to examine the development of competitive
advantage. It was developed in 1985 by Michael Porter in Competitive Advantage. It is used
as a tool to identify various ways to create Customer Value. The chain consists of a series of
activities that create and build value. They culminate in the total value delivered by an
Value chain model from Michael E. Porter’s Competitive Advantage:
According to this model the activities are divided into two broad categories:
• Primary Activities- Activities which relate directly to the actual creation,
manufacture, distribution, and sale of a product or service to the firm’s customers.
• Support Activities-Economic activities which assist the firm’s primary activities.
Value Chain of Pizza Hut:
Human Resource Management
Appraisals and rewards
Freedom of thoughts
Feedback from customers
Improvising of their products
Launch of new products
Use of IT, databases
Temperature controlled trucks
Acquiring the resources
Ingredients from local suppliers
Special ingredients From Australia
Purchasing raw materials like:
Fruits and vegetables
Salt and pepper
Preparation of pizza base
Customization of pizza
Make pastas and salads
On time delivery
Transporting pizza bases
Serving pizzas hot
Marketing and Sales
Redefining its menu
Introduction of new products
Service and Support
Customer feels comfortable
Explanation of Value Chainof Pizza Hut:
Preparation of pizza base using the above mentioned sources as per the
requirements and expectations i.e. the required amount of materials
need to be added, thickness, softness, size of the pizza base as per the
requirement, heating the same for the right time. All this so that the
base becomes as per the expectations set for it.
Centralised locations for the preparation of pizza bases to maintain the
uniformity, from where these are transported to the various outlets.
Customization of Pizzas, as per the order by the customer like what all
toppings and flavours he wants. Examples: A orders for a chicken
pizza, while B orders for a Vegetarian one with lots of toppings like
mushroom, onion, on other hand C orders for just cheese pizza with no
toppings at all. So different customers have different orders depending
on their taste and preferences, location of the restaurant (like in India
beef and other similar non vegetarian items are banned and people
prefer Paneer items, on the other hand this thing completely differs
abroad). Thereby making it an international brand with local taste.
Make Pastas and Salads: as per the order of the customer from the raw
materials as mentioned above.
Doing all this in the specific time period (so as to deliver to the
customer in the mentioned time period at the time of ordering) and also
adhering to the company standards while maintaining the quality of the
food item (pizzas and pastas).
o Outbound Logistics:
Transporting the pizza bases to the Pizza Hut outlets, where they are
kept and used for customization as per the order. This helps
maintaining the uniformity of bases, saving time and resources in the
preparation of pizza at each outlet.
Pizza and pastas etc. serving hot to the customers at the restaurant and
at their doorstep.
o Marketing and Sales:
Segmentation and Target Market: it basically targets the people till the
age 55 years, including working people, families with young children,
students and travellers.
Branding: Pizza hut is a brand of pizzas and pastas, which means that
its products have an authenticity and a definite brand value and
satisfaction to customer of its quality.
Redefining its menu: Like in India, they have introduced products that
suit the Indian taste like the Paneer and tandoori pizzas etc. This helps
to increase the customer base and satisfy them. Also, not using the
products which are not acceptable in India like beef, ham etc.
Introduction of new products and backing them up with proper
promotions, discounts and advertisements which excites the customers
to give it a try atleast or just have a high ‘what’s new’ quotient.
Pricing: as per the market demand and keeping the competitors also in
Distribution: Pizza Hut is opening a large number of outlets targeting a
large customer base, so that more and more people can enjoy its
Advertising through hoardings, newspapers, TV ads, promotion on
internet, mobile apps, pamphlets etc. And also setting up stalls and
catering in colleges, fests, events, marriages, parties etc.
Promotional offers like buy one get one free, corporate/college and
group discounts, meals for 2 and 4, choose your own topping and pizza
Consumer benefit: a belief about its exclusivity that Pizza hut offers a
great and memorable dining experience, so much so that at many
places people have to wait/book a table to get into the restaurants, thus
increasing the charm in the people about it.
Also advertising that the pizzas are ‘served hot’ with their own set of
indicators to do that- This also helps create an interest and confidence
of getting hot pizzas in the customer’s mind.
o Service and Support:
Provide/Serve the pizzas hot to the customers at the restaurants.
Providing the customers good service by making them feel
comfortable and fulfil their needs both before and after serving the
pizza to them.
Politely tell the customers of the new menu items, offers that they have
so as to ease their process of making choices.
Ordering online service: customers can look at the menu, decide and
order online as per their location. They can also get contact and other
information like the new entries, discounts and offers, which they can
use as per their wish.
It basically deals with how to get the required resources.
It has to maintain the quality, deliver the best pizzas, keep the customer
satisfied, all this at affordable and competitive prices. Thus, to achieve
this they maintained the supply chain and developed a chain for 95%
of its ingredients of local suppliers. And to maintain its famous Pizza
Hut’s taste, it imports the main ingredients like pepperoni, mozzarella
cheese from Australia and Spain respectively.
Their strategy to take some ingredients from the local market and get
some imported helps them maintain the quality as well as low prices
(as required especiallyby the Indian market).
o Technology Development:
Pizza hut believes in taking feedback from the customers and
improvising themselves. So, all the customers that come to the Pizza
hut restaurants and even the ones who order online give their valued
feedback as to what they liked and how can they improve to serve
Pizza hut does research work on how to improve on the existing
products and innovate to introduce new ones. This is to provide the
customer with the new products and increase the foot step, and also
give a distinctive perspective to the brand so as to be in front of the
line when it comes to offer the best pizzas and service.
Usage of the modern technology is also done like:
Maintaining of databases of customers so that they can be
contacted at the time of festivals and for promotional offers.
Reaching out to the corporates and colleges through emails and
over the net communication, for setting up of stalls during the
fests and events for increased sales, enlarging the customer
base and targeting these customers as frequent customers by
sending them offers through emails and SMSes giving them
corporate and college discounts (which helps make Pizza Hut
the top most option for the people when they want to have good
food and have a memorable time).
Usage of the computers and other advanced electronic items
which help keep them a check on:
What all needs to be bring in as raw materials
Readily available Employees details
Temperature controlled trucks for the transportation of the raw
materials and prepared bases at a controlled temperature can be
o Human Resource Management:
Focuses on hiring of the new employees.
Provides them the required trainings so that they can perform as per the
expectations set for them on the job.
Strives to increase the knowledge and skills (including soft skills) of its
Gives annual appraisals as per the performance of the employees. This
also helps the employees get the motivation and work hard to get the
Important information’s are diligently internally communicated to all
Its employees work passionately in providing the customers a great
time by doing a number of activities like smiling and greeting the
customer, politely taking the orders and even guide them (if required),
serving the food hot as and on time as per the specifications and
customisations mentioned by the customers (like what all toppings
should be there, use of onion or not in vegetarian pizzas, even to the
extent that number of ice cubes in the drinks/beverages served),
politely asking them to come again. This makes the customer feel
really comfortable and happy and thus making them wanting to come
again and again.
The employees are able to handle some critical situations and take
decisions accordingly- as per the demand of the situation, without even
the help of their supervisors. This thus even provides them the freedom
of decision making.