Pizza Hut
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Case Study - Pizza Hut
It is difficult to examine this particular case within the confines of 1986, knowing that today, it would be hard to imagine not having the availability of pizza home delivery. Even without hindsight, however, the information provided throughout the case shows that not seeking entry into this segment of the market would have been detrimental to the overall growth of Pizza Hut as a corporation. Continued growth requires not only maintaining current successful business practices, but also taking into consideration shifts in societal behavior. For example, behavior patterns were changing, people were watching more at home movies and consumers perception of pizza was as an "eat-at-home" food. Pizza was also starting to be viewed as another type of fast food. These initial indicators were not just a fad, but signs of a long term trend, where busy people and families would only increasingly utilize this resource as a readily available option.
This data, showing shifts in societal trends was coupled with the initial success of Domino's, which was initially underestimated by Pizza Hut. In reviewing the data one can see that annual sales for Pizza Hut were $1 billion in 1981, and $2 billion in 1986. In researching the Historical Data for Pizza Hut, one can see that while market share had been steadily climbing, ultimately peaking in 1983, the company was experiencing a decline during the years 1984-1986, where market share began to drop. Domino's was not considered a serious threat by Pizza Hut, although their share of the market was on the rise...