PEST ANALYSIS

PEST Analysis of Pizza Hut in UK

PEST Analysis of Pizza Hut

Introduction

Pizza Hut is an international franchise which offers various types of pizza, with the other side dishes including pasta, breadsticks, salad, wings, sandwiches, garlic bread and different deserts.

Pizza Hut came into existence in 1958, starting off as a local pizza restaurant in Wichita Kansus. Two brothers were the founder of Pizza Hut, Dan and Frank Carney. It started of as a small company , but in fifteen years, Pizza Hut opened its first restaurant in UK and became the largest Pizza Company around the world. It offers a diverse, scrumptious range of Italian fast food for customers to enjoy. It has 12,500 franchises across 91 countries. Pizza Hut, being a major brand of Pizza has to consider the factors outlined in PEST analysis.

Discussion

Types of Business Environment

Generally the business environment can be classified into two major types:

Internal Environment

External environment

Internal Environment

Internal environment includes factors that can be in control of the business. The elements are amendable. The areas that can be worked are on management, finances, marketing strategies and human resource (Goyal & Goyal, 2006 p. 8).

External Environment

External environment consists of elements that are not in the control of the business. The external environment can be further divided into two categories (Goyal & Goyal, 2006 p. 10):

Micro Environment:

Micro environment is the external factors that directly affect the operations of the business. The prominent participants of micro environment are customers, suppliers, labour and competitors

Macro Environment

Macro Environment is made of elements that are more uncontrollable and which has an indirect effect on the business. These unpredictable forces are determined in the PEST analysis

PEST Analysis

PEST analysis includes - Political, Economical, Social and Technological factors. It gives an external environment assessment and determines the global factors affecting the business. Once these influences are identified, it will be easier to improve the business situation (Hall et.al, 2004, pp. 38-39) .

Political Factors

The political factors under PEST analysis outline the government policies affecting the business. It includes legal elements such as government regulation, tax policies and the law and order situation encompassing stability of the government (Henry 2008, p. 51). In Western countries, the stability might not be an issue but Multi Corporation such as Pizza Hut that has franchises that are in most part of the world may have an impact if there are political changes globally.

Government regulation

Sudden change in government regulation will affect Pizza Hut. For instance, if the government decides to privatise or increase investments by inviting fast food chains in UK, it will enhance the indirect competition. The new entrant will bring innovative products and may sell at a subsidised rate attracting the customers. This will lead Pizza Hut changing in market strategy such as competing in terms of prices, campaigning and quality.

The term of the government will assure the stability of the political condition. Frequent changes of government will mean new regulations and Pizza hut ...