Value Chain of Pizza Hut

Submitted by:
Amores,Vianca Pearl
Bermudo, Jessa
Buenavista, Alyanna Kate
Ebo, Mel
Duran, Anthony Al
Rabaya, Luwin Joseph
Ysalina, Dale

Pizza Hut
Pizza Hut is one of the best wide spread international fast food joint. It offers
different styles of pizza along with 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.

Value Chain:
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 organisation.

Value chain model from Michael E. Porters 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 firms
customers.

Support Activities- Economic activities which assist the firms primary

activities.

Value Chain of Pizza Hut:

Support Activities
Funds collection
Infrastructure
Administrative tasks
Managing employees
Training employees
Appraisals and rewards
Human Resource Management
Knowledge transfers
Freedom of thoughts
Conducting meetings
Feedback from customers
Research work
Improvising of their products
Technology Development
Innovation
Launch of new products
Use of IT, databases
Temperature controlled trucks
Acquiring the resources
Procurement
Ingredients from local suppliers
Special ingredients From Australia
Primary Activities
Inbound Logistics
Purchasing raw materials like:
Dough
Cheese
Sauce

Operations
Outbound Logistics

Marketing and Sales

Service and Support

Fruits and vegetables

Spaghetti
Salt and pepper
Preparation of pizza base
Customization of pizza
Make pastas and salads
On time delivery
Transporting pizza bases
Serving pizzas hot
Segmentation
Target Market
Branding
Redefining its menu
Introduction of new products
Pricing
Distribution
Advertising
Promotional offers
Customer feels comfortable
Online orders
Home Delivery

Explanation of Value Chain of Pizza Hut:

Primary Activities:
o Inbound Logistics: Purchasing the raw materials required which
includes:
Dough like:
Thin N Crispy Dough
XL Full HouseDough
Pan Dough
Hand-Tossed Style Dough
Stuffed Crust Dough
Cheese like:
String Cheese
Pizza Cheese
Sauce like:
White Pizza Sauce
Regular Pizza Sauce
Sweet Pizza Sauce
Non vegetarian items like:
Buffalo Chicken
Beef
Pork
Diced Chicken
Pepperoni
Italian Sausage
Meat balls
Fruits and Vegetables like:

 Mushroom
Onion
Tomatoes
Jalapenos
Banana peppers
Paneer
Chillies
Sweet Corn
Olives
Apples
Cherries
Breads:
Garlic Bread
Breadsticks
Spaghetti
Desserts
Wheat
Spices
Water
Milk
Sugar
Salt
Vegetable Oil
..etc.
o Operations:
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 whats new
quotient.
Pricing: as per the market demand and keeping the competitors
also in mind.
Distribution: Pizza Hut is opening a large number of outlets
targeting a large customer base, so that more and more people
can enjoy its offerings.
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 etc.

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 customers 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.
Support Activities
o Procurement:
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 Huts 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 especially by 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 better.
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:
Billing information
The Inventory
What all needs to be bring in as raw materials
Sales
Readily available Employees details
Temperature controlled trucks for the transportation of the
raw materials and prepared bases at a controlled
temperature can be done.
o Human Resource Management:
Pizza Hut
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 employees.
Gives annual appraisals as per the performance of the
employees. This also helps the employees get the motivation
and work hard to get the appraisals.
Important informations are diligently internally communicated to
all the employees.
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.