Executive Summary
Pizza Hut started out as a pizza parlor opened up by two brothers in Topeka, Kansas.
Today, the company has restaurants all over the world and its annual sales are in the
billions. The growth of the company was due to a good product being delivered at a good
price and offering perceived value. The company has adjusted to new entrants into the
market and has managed to stay ahead of the competition.
The philosophy for growth is simple: Take care of the customer, and the customer will take
care of you. Pizza hut focused on providing good customer service in order to create
customer loyalty. In return, the customer will return and more importantly, the customer
will become an advocate.
Customer feedback programs were put into place in order to measure the customer
experience and also to uncover opportunities. The restaurant managers are paid bonuses
based on the result from their respective customers. The problem was that the company
noticed that managers of underperforming locations where receiving bonuses while
managers of extremely profitable locations were not. Recommendations have been made
in order to fine tune the bonus plan so that manager incentives will be balance between
profits and customer service.
Pizza Hut is a pioneer and continues innovation with its service initiatives and product
lineup. As long as the company keeps focusing on its customers, then the company will
still be a leader for generations to come.
Table of Contents
I. History & Background….4
II. Customer Loyalty Program….5
III. Macroenvironment Variables….6
IV. Microenvironment Variables.7
V. TOWS Analysis….8
Threats..8
Opportunities…8
Weaknesses…8
Strengths…….9
VI. Recommendations & Rationale..9
VII. Conclusion..11
VIII. References…12
IX. Questions.13
I. History & Background
Pizza Hut was started in 1958, by two brothers in Wichita, Kansas. Frank and Dan Carney
had the idea to open a pizza parlor. They borrowed $600 from their mother, and opened the
very first Pizza Hut. In 1959, the first franchise unit opened in Topeka, Kansas.(Grumpert,
1989) Almost ten years later, Pizza Hut would be serving one million customers a week in
their 310 locations. In 1970, Pizza Hut was put on the New York Stock Exchange under the
ticker symbol PIZ.
In 1986, Pizza Hut introduced delivery service, something no other restaurant was doing.
By the 1990s Pizza Hut sales had reached $4 billion worldwide. In 1998, Pizza Hut
celebrated their 40th anniversary, and launched their famous campaign “The Best Pizzas
Under One Roof.” (PizzaHut.com 2007) In 1996, Pizza Hut sales in the United States were
over $5 million. However, Pizza Huts market share has slowly eroded because of intense
