Competitive Advantage Of Pizza Hut

Conducting a value chain analysis provides a snapshot for identifying a firm’s relative competitive performance, core competencies, and for focusing on customer centric activities. Costco’s customer driven focus allows primary and support business activities to work in unity creating a stronger competitive advantage and thereby increasing profitability. Profitability and shareholder value rely on coordination of both sets of business activities to create a firm’s competitive advantage.

Value chain analysis (VCA) attempts to understand how a business creates customer value by examining the contributions of different activities within the business to that value.” (Pearce & Robinson, 2004) To Southern Style, this statement means that customer satisfaction should be a number one goal for the restaurant. Repeat customers are a good way to get word out about how good the food is and wonderful the service is at the restaurant. Word of mouth travels faster than any advertisement that has ever been invented.

Effective value chain as a competitive advantage can contribute significantly to the prosperity of a firm in the competitive arena, but it can cause dire situations if not operated properly (Guy, 2011). However, there are conflicts among companies as to how stakeholders think they gain competitive advantage. Porter (1996) suggests: A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at lower cost or do both.

Pizza Hut Restaurant: Siblings Dan and Forthright Carney obtained $600 from their mom to open a pizzeria – then a novel idea – in Wichita in 1958. It was an enormous hit (giving without end free pizza on opening day didn't hurt), and diversifying started a year later.

The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.

Value Chain analysis evaluates each step business goes through from inception to finality. The goal is to maximize the value for the total cost. Costco's mission is to provide their members with quality goods and services at the lowest possible prices. The company’s mission, values and strategies suggest Costco uses a broad enterprise strategy which fits in the societal framework. To ensure employee motivation, Costco offers them a unique banquet of benefits. This include; paying health benefits for them, 50% higher wage, employee retention of over 90 percent, and maintaining employees even during recession periods (Costco, 2010). The Company’s strength is its primary value chains which split into two distinct functions: Demand fulfilment and Demand generation. Demand fulfilment includes input logistics, operations, and output logistics. Demand generation involves sales, marketing, and service department which breaks down into sub-tiers. Costco’s support activities include HRM, technology development, firm infrastructure and procurement. Costco’s weaknesses are difficult to pinpoint; one weakness is persistent low operating profit margins. Bigger profits can occur by not paying employee benefits and with demanding higher returns from their suppliers. The problem would be at what cost?  Costco receives cost advantages from value adding major (brand items) activities. However, it continues to experience a challenge

Value add services: Mouth to mouth to promoting our product and using social media for advertising as the same time , Put more customers service for making value

The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.

Keane (2008) stated to design, manufacture, promote, offer and facilitate its product or services, all organization engages in some activities. All of these activities of an organization are shown through the use of value chain process. The manner in which organization performs its varying activities along with the firm’s value chain mirrors the organization’s background, strategy along with the way in which the organization executes its strategy. Ponte (2008) stated that the analysis of value chain of an organization is used to develop the organization’s competitive strategies along with formulation the connected and interconnectedness between all the organizational activities that formulate value. Francis, Simons, and Bourlakis (2008) stated that value chain analysis is a helpful tool as an organization looks to attain competitive advantage. Furthermore, Rieple and Singh (2010) stated that a value chain is a useful tool in conceptualizing the varying activities

Kotler, P. , Wong, V., Saunders, J., Amstrong, G., 2005. Principles of Marketing 4th, edition Pearson educational editorial.

The whole history of pizza hut has been achieved through innovation, but the history of pizza hut really took off with amalgamation into the Pepsi Company and more aggressive marketing techniques especially in the take out market.It was founded in 1958 by Dan and Frank Carney. Their friend suggested opening a pizza parlor they agreed with the idea that it could prove successful, so that they borrowed $600 form their mother to start a business. At that time the original Pizza hut was at

Pizza Hut got their start in 1958 when two brother borrowed $600 from their mother open a pizza place in Wichita, Kansas. Since, then Pizza Hut has grown from just one pizza place to having them in over 100 countries today. I believe what make this pizza company so successful is their hospitality and their quality of food.

Value chain is an approach to know how an item or activities create value for consumers. The most of value provides to consumers, the most of competitive advantage an organization build. In this analysis, value chain model has separated into primary and support activities. Primary activities are included in the physical creation of the item and service. On the other hand, support activities give the inputs and infrastructure that enable the primary activities to happen. This value chain model can be refer to below figure 5.

The value chain analysis (shown in appendix) was also generated by Michael Porter. This model is referred to “identifying ways to increase the efficiency of the chain” (Investopedia, n.d.). Furthermore, the overall objective is to produce maximum value with minimum total cost and establish a competitive advantage.

➢ 1958: The legacy of Pizza Hut began, when two college-aged brothers from Whichita, Kansas, Frank and Dan Carney opens first Pizza Hut restaurant after borrowing $600 from their