Pizza Hut is currently the largest Pizza chain restaurant in Singapore with a total of 64 branches (Pizzahut.com.sg, 2018). It is an award-winning brand with a vision to be the favorite casual dining place for families and friends while having a good time. This aim is achieved by providing affordable foods, a pleasant ambience and memorable service that motivates the customers to make a return visit. The company offers a wide variety of fresh quality foods with an unmatched passion that ensures a high rate of customer satisfaction is achieved. In line with the current market trends, Pizza Hut Singapore has adopted the cost-effective casual dining notion which gives prominence to the provision of fun and appealing environment for the clients. Being a market leader, the company ensures that the customers get an outstanding dining experience and friendly customer service to safeguard against loss of market share to competitors. In addition to the sale of pizza and other foods, the company provides catering and events, and kid's workshop services where children participate and learn how to make Pizza's with the help of the top pizza resident chefs of the firm. The catering services are provided for events such as corporate functions, official openings, anniversaries and birthdays.
The PESTLE analysis is a business tool used for strategic and marketing planning by studying external influences on a company emanating from factors such as political, economic, social, technological, legal and environmental. The analysis provides marketers with an understanding of how the macro-environmental issues may impact the company thus making informed decisions. The political risk faced by Pizza Hut in Singapore is relatively low since the country currently enjoys political stability which promotes a safe environment for conducting business. The employment laws and trade regulations in Singapore must be adhered to by all companies. The rules do not pose any threat to Pizza Hut since they are designed differently to suit various industries. The country applies a sound tax policy that seeks to ensure collection of adequate finances that can sustain the government while maintaining a favorable environment for investors to do business. The trade restrictions in Singapore also do not pose any threat to Pizza Hut.
Singapore has a free-market economy which provides companies with a vibrant and conducive environment for conducting business. The various elements that may affect Pizza Hut from the economy include interest rates, unemployment policies, inflation rates and economic growth. The low inflation rates and the growth experienced in the country's economy enhance the company's productivity and ability to remain in the market. The revenues and profitability of the company are affected by fluctuations in the exchange rate and the cost of labor. The Singapore economy experiences an increasing shortage of workforce which results in a rise in its price in line with the laws of demand and supply.
The sociocultural factors present in the business environment in which Pizza Hut operates in Singapore influences consumer choices and preferences. An increase in the demand for a healthy lifestyle poses for Pizza Hut since it provides a chance to grow the sales and in turn improve profit levels. The changing demographics in Singapore in which the number of the elderly is crowding out that of the youth may pose a threat to Pizza Hut in the long run. This is because the target market of the company is the youth and middle-aged people and a decline in their number suggests a possible reduction in sales. Trends in cultural diversity may pose a threat to the company. For instance, it may be difficult for Pizza Hut to offer foods that satisfy people's cultural preferences.
The technological trends do not pose a significant threat to Pizza Hut since the services it offers are people-centered. Being a player in the hotel industry, the firm cannot rely on technology to fully execute the responsibilities within the workplace. However, a factor such as increased automation is an opportunity for the enterprise since it helps to streamline operations and reduce the time taken to complete tasks. For instance, Pizza Hut Singapore can utilize technological advancements in business automation to enhance service delivery through easing the ordering process and reducing customer waiting time. The technological trends influence the competitive landscape of the industry and Pizza Hut ought to be on the lookout to avoid being outshined by other market players. For example, if a competitor adopts a technological practice that enhances service delivery, Pizza Hut must be on the lookout since it faces a threat of losing customers if their services do not match those of the other market player.
Pizza Hut Singapore is required to comply and adhere to the laws and regulations that govern the hotel industry in the country. The external legal factors that may affect the company include reforms on tax laws, food and safety regulations and employment laws. The food and safety laws must be adhered to, and the enterprise should use them as an opportunity by providing quality food and services that meet the industry's stipulated standards. Any tax reform that seeks to increase the amount remitted by the enterprise to the government poses a potential threat to the business that is beyond the company's control. The enterprise can effectively make the employment regulations in Singapore an opportunity by enhancing the human resource management practices. The advantage can be successfully achieved by aligning the activities of the employees' department to the standards set out by industry regulators. Complying with the legal rules in the business environment gives the company an opportunity to create an excellent image to the public and the regulators as well.
The ecological factors that may affect Pizza Hut Singapore involve environmental conservation. In the modern day society, there has been increasing demand for companies to ensure that their activities are aimed at conserving the environment. The external environmental factors that may impact the enterprise are the preference for environmentally friendly products and business sustainability. A change in customer's choices to support eco-friendly products may influence the company in deciding the nature of items to use. For instance, the trend may pose a threat to the firm if the material it uses to package takeout food is not safe for the environment. The enterprise can efficiently convert it to an opportunity by ensuring the use of eco-friendly products and engaging in environmental conservation campaigns and initiatives. Business sustainability for Pizza Hut can be achieved by improving operational efficiency through cost-cutting and increasing sales thus maximizing profits. Environmental conservation is a principle which firms must ensure is adhered to while undertaking their activities. In the case of Pizza Hut, ecological consciousness can be achieved by making sure that the waste from its chain of restaurants in Singapore is disposed of in a safe and eco-friendly manner.
Porter's Five Forces
The Porter's five forces is a model used by marketers to analyze and understand the competitive factors present in the business environment which may affect a company's profitability. The framework allows market players to determine industry viability by assessing market attractiveness, the impact of trends on competition and how firms can effectively position themselves in the market. The elements of this strategic tool are an indicator of the magnitude of rivalry within the industry. Unlike other vital tools that analyze a sole business and its competitors, the five force model considers the entire industry. Porter's model comprises five elements which are;
The Threat of New Entrants
The Singapore economy provides a pleasant environment for companies to do business and as such the threat of new market entrants is strong. New companies that join the industry pose a threat to existing market players in ways such as the risk of losing market share which may cause a decline in sales and company profits. The hotel industry in Singapore is lucrative, and therefore, Pizza Hut must adopt measures to address the sharp intensity of threats posed by new market entrants. This element of Porter's model is influenced by external factors such as the cost of doing business, cost of investment and brand development. The ease of undertaking business activities in Singapore intensifies the threat since other investors can join the industry without much difficulty. The amount of capital required for setting up a business that matches the level of Pizza Hut Singapore is significant thus reducing the number of potential entrants. However, investors who choose to join the hotel industry as small-scale players pose a threat to Pizza Hut since they may influence a decline in the company's market share. This threat is actualized into a risk if the new entrants can offer similar quality to that of Pizza Hut at a lower price. The costs of developing a new brand to match a market leader are high thus presenting a moderate force of threat to existing companies such as Pizza Hut.
Bargaining Power of Buyers
Powerful buyers influence a decline in the profitability of an industry and increase competition by forcing a reduction of prices in the market. Pizza Hut Singapore experiences a low magnitude of bargaining power of buyers in the hotel industry. A large number of buyers make it difficult for them to impose pressure on the company and other market players. However, the presence of buyers who are fully aware of the market information poses a threat since the knowledge gives them leverage against the company. For instance, buyers who are well versed on the level of prices charged at Pizza Hut and its competitors pose a threat since they may influence other consumers to prefer restaurants with lower prices. The availability of substitute products offered by other restaurants also increases the power of buyers. Other factors that strengthen the ability of buyers include similar products, low switching costs and a high threat of backward integration. Pizza Hut Singapore must ensure that there are adequate policies put in place to handle the threats that emanate from the strong bargaining power of buyers in the hotel industry.
Bargaining Power of Suppliers
Strong supplier power can influence an increase in competition and a decline in the profitability of an industry by raising prices of products and reducing their availability. The bargaining power of suppliers in the hotel industry in Singapore is influenced by the number of suppliers, buyer switching costs, and forward integration. Pizza Hut Singapore experiences high supplier power due to the nature of raw materials such as farm products used in the preparation of delicacies in its chain of restaurants. Quality is of importance, and the possibility of suppliers altering the standard and condition of supplies poses a significant threat to Pizza Hut. An increase in the price of supplier's products would, in turn, affect the profitability of the enterprise since it results in additional costs for the buyer. The strong power of suppliers is, however, countered by the low switching costs and undifferentiated products. The cost of changing suppliers for Pizza Hut Singapore is minimal, and as such, the company can choose not to renew contracts with suppliers who use their bargaining power to sabotage the operations of the buyer.
The Threat of Substitute Products
Pizza Hut Singapore is a brand in the hotel industry whose primary service is to provide fresh and delicious products with a bias to pizza and other fast foods. The company experiences severe threats from the avai...
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