The environmental forces are the external forces of Pizza Hut that will directly or indirectly influence the organization. There are six environmental forces of Pizza Hut such as competitive, economic, political, legal and regulatory, technological, and socio cultural.
There are 3 types of competitors that Pizza Hut faced on which include brand competitors, generic competitors and total budget competitors.
The brand competitors of Pizza Hut such as Domino’s Pizza and Papa John’s Pizza are the firms that sell pizza with similar features and benefits to the same customers at similar prices. Pizza Hut should do more advertising so that customers can differentiate them from other brand competitors. Brand competitors are the most significant of Pizza Hut because customers will compare the different product and choose the best firms for them.
The generic competitors such as McDonald’s, KFC’s, and Burger King’s provide very different products that satisfy the same basic customer need. In this competition, customers search for fast food that can satisfy their hunger. Customers can choose whether to eat burger at McDonald or pizza at Pizza Hut to satisfy their hunger.
The total budget competitors of Pizza Hut might include burger, beverage, newspaper or fruits. If the price of Pizza Hut set too high and exceed the limited financial resources of the same customers, this will cause customers to shift to the other products that is more suitable for their budget. Consumers will consume more at Pizza Hut if their total budget is enough.
The type of Competitive Structure for Pizza Hut is monopolistic competition because there are many potential competitors such as Domino’s Pizza and Papa John’s Pizza in the economy. Besides that, Pizza Hut tries to differentiate it product from its competitors by always bring out some new special flavor that focus much more on cheesy pizza such as Big Shot Cheesy Pops Pizza so that customers have a different choices when they looking for pizza.
The condition of Pizza Hut can be determined by the economic condition because the organization will directly affected by the business cycle, buying power and people’s willingness to spend.
The business cycle consists of 4 stages which are prosperity, recession, depression and recovery. Based on the research, the condition of Malaysia is in recovery stage for this few years. During recovery, the high unemployment rate begins to decline, higher buying power and the willingness to spend increase. Result show that the sales of Pizza Hut increase by some percentage year by year when they facing recovery stage in the economy.
The higher buying powers in recovery stage show that customer able to consume more when they walk in to any outlets of Pizza Hut. This can directly increase the sales and revenue of Pizza Hut.
The people’s willingness to spend is their inclination to buy because of expected satisfaction from a product. The Sensasi Delight Set for 1 person only cost for RM8.50 before tax and service charge will increase the people’s willing to spend because they spend less and gain more satisfaction on it, especially for those teenagers that prefer western food such as pizza. The higher the people’s willingness to spend, Pizza Hut can gain more profit on it.
Socio cultural Forces
Socio cultural forces are the influences in a society and its culture that bring about changes in people’s attitudes, beliefs, norms, customs, and lifestyles. There are 2 major issue that Pizza Hut examines which is demographic and diversity, and cultural values.
One of the demographic changes that are affecting the Pizza Hut is the increasing percentage of older consumers. The increasing number of older consumers in Malaysia wills indirectly affects the sales of Pizza Hut because they will try to demand for a healthier product instead of fast food or high calories food. This will directly...