Pizza Hut is a large international fast food chain that offers pizza and other dishes. It faces intense competition from other major pizza chains like Domino's and Papa John's. While barriers to entry in the pizza industry are low due to established competitors, the threat of substitutes from other fast food restaurants is high. Customers have some bargaining power due to the abundance of options, but suppliers have little power over Pizza Hut and other large chains. Pizza Hut's value chain focuses on efficient operations, logistics, marketing, and customer service to drive profits.

2. PORTER'S FIVE FORCES MODELANDPORTER'S VALUE CHAINPIZZA HUT

3. Introduction
PizzaHutisoneofthebestwidespreadinternationalfastfoodjoint.Itoffersdifferentstylesofpizzaalongwithsomesidedisheslikesalads,pastas, buffalowings/potatorings,breadsticks,andgarlicbreads.ItisasubsidiaryofYum!Brands(aFortune300company),theworld'slargestrestaurantcompany.ItisanAmericanrestaurantchainwithmorethan6,000PizzaHutrestaurantsintheUnitedStates,andmorethan5,600storelocationsin94othercountriesandterritoriesaroundtheworld.ItenteredIndiain1996, withitsfirstbranchinBangaloreandexpandingalloverthereafter,creatingalargecustomerbaseforitself.

4. Competitive Rivalry
Threat of New Entrants
Threat of Substitutes
Power of Suppliers
Power of Customers
Porter's Five Forces Model

5. Competitive Rivalry (Very High)
•PizzaInncompeteswithsomeotherlargeglobalpizzachains,suchasPizzaHut, Domino’sPizza,andPapaJohn.Theyallengageininternationalbusiness,fastfoodfranchise,dine-inanddeliveryservice,whichcreatesintensecompetition.
•Fiercepricediscountingandcouponsbythesetopthreeplayersalsosqueezedotherpizzasellers.inanddeliveryservice,whichcreatesintensecompetition.
•Exceptforthosepizzacompanies,PizzaInncompeteswithsomesmalllocalpizzarestaurantsaswell.Theyofferlowpriceproductsandfasterservice,takingthecompetitiveadvantagesofPizzaInn.
•Thepizzasegmentismademorechallengingfortraditionalrestaurantsbyotherclosesubstitutions,includingsupermarkets,whichnotonlysellfrozenpizzas,butreadytobakepizza,andwarehouseclubsselllargesizepizzas.

6. Threat of New Entrants (Low)
•Pizzachainsaredealingwiththeeffectsofadeeprecession,becauseofhigheringredientprices,theslimmarginsandmorecompetitionfromnon-traditionalchannels.
•Existingcompetitorskeeploweringpricesanddiscountingprices,andexpandingdistributionchannelscreatebarrierstoentrantsaswell.
•Currentcompetitorshavefirstmoveradvantages,theyhavematuretechnologyinspecialtyproduction,andarelationshipwithdistributionchannels,thereforeifsecondmoverdoesn’thaveinnovationintheindustry,theycanhardlysurvive.

7. Threat of Substitutes (High)
•Forthequick-servicepizzarestaurants,ithasahighavailabilityofsubstituteproducts.
•PizzaInnprimarilyprovidespizzawhichhasvarioussubstitutesfocusonotherfastfoodchains,suchassandwichchains,chickenfastfoodchains,familyrestaurantsetc.
•Inmuchthesameway,othertraditionalfoodchainsoffercustomers’fast, convenientandcheapproductsandservicesaswell.
•Thethreatofsubstitutesinfluenceonthepricecompetition,priceismoreelasticsincecustomershavemorealternatives.

8. Power of Customers (Medium/Low)
•Thebuyerbargainingpowerislowduetothefactthatfastfoodcustomersarelargeinamount,andfocusonindividualcustomers.
•Everysinglecustomerisunlikelytopurchasealargequantityofproduct,andit’sunexpectedthateachofthemcontributesalargeproportionofsales.
•QSRsareinhighdemand,especiallyinshoppingcenters,residentialareas, collegecampusesandoffices.Inaddition,buyersarefragmented,withnoparticulareffectonproductorprice.Therefore,theywillnotbehurtbylosingasmallamountofcustomers.
•Intheindustry,customersarelesssensitivetopricefluctuations,whichisrelativelyinelastic,sothatprovidershavelargepricecontrollingpower.
•SincetheQSRisstillmarketdemandinginthefuturebecauseofitsspeed,priceandconvenience,buyerpowerisrelativelylow.

9. Power of Suppliers (Low)
•Themajorsuppliersofthefastfoodindustryarerawmaterialsuppliers. Suppliersareweak,becauserawmaterialsforfoodcomponentsintheindustryarecommodityproducts,suchascheeseandflour.
•Manycompetitivesuppliers.
•Theindustryislaborintensive.However,laborsupplyisabundantsousuallycompaniesarenotconcernedabouttheirlaborforce.
•supplierstendtokeepalongtermrelationshipwiththeconcentratedpurchasers.(lesspowerful)
•Furthermore,manybigfastfoodchaincompaniesareverticallyintegratedwiththesupplierinordertomaintainlowcostsandhighqualityproducts

10. Value Chain of Pizza Hut
SUPPORT ACTIVITIES
Infrastructure
Human Resource Management
Technology Development
Procurement
PRIMARY ACTIVITIES
Inbound Logistics
Operations
Outbound Logistics
Marketing and Sales
Service and Support
MARGIN

11. Infrastructure
Human Resource Management
Procurement
Technology Development
•Managing employees
•Training employees
•Appraisals and rewards
•Knowledge transfers
•Freedom of thoughts
•Conducting meetings
•Feedback from customers
•Research work
•Improvising of their products
•Innovation
•Launch of new products
•Use of IT, databases
•Temperature controlled trucks
•Acquiring the resources
•Ingredients from local suppliers
•Special ingredients From Australia
SUPPORT ACTIVITIES
•Funds collection
•Administrative tasks

12. Inbound Logistics
Operations
Outbound Logistics
Marketing and Sales
Service and Support
PRIMARY ACTIVITIES
Purchasing raw materials
•Preparation of pizza base
•Customization of pizza
•Make pastas and salads
•On time delivery
•Customer feels comfortable
•Online orders
•Home Delivery
•Segmentation
•Target Market
•Branding
•Redefining its menu
•Introduction of new products
•Pricing
•Distribution
•Advertising
•Promotional offers
•Transporting pizza bases
•Serving pizzas hot

13. http://utsavmahendra.blogspot.com/2012/03/pizza-hut-porters-five- force-model.html
http://www.slideshare.net/singhalshubham/pizza-hut-value-chain- analysis
Reference