The Impact of E-Business on Pizza Hut - Essay Example

? Management in Context: The Impact of E-Business on Pizza Hut The research is undertaken to analyze the key implications of e-business on some aspects or function of Pizza Hut and evaluate how this has impacted on the way it is managed. Specifically, the following concerns would be addressed: (1) a presentation of a critical analysis of e-business on Pizza Hut’s operations and the potential challenges and opportunities it creates for modern business; (2) a discussion of the background of Pizza Hut with the rationale for choosing e-business as influencing current operations; (3) a critical evaluation on how this issue is being addressed within Pizza Hut and how this impacts on the way it is managed; and (4) a presentation of conclusions and recommendations, as deemed appropriate. The Impact of E-Business on Pizza Hut The significant impact of the fast pace in technological development is seen in the way contemporary organizations operate and manage their business. Some business enterprises need to redesign their policies, systems and procedures to adapt to the demands of the times. The onset of the internet paved the way for changes in strategies in the marketing mix of companies in order to sustain the future requirements of the organization given their resources and competitive advantages. The proliferation of e-business, for example, required organizations to adjust and accommodate policies on information management systems consistent with organizational mission, goals, and plans. One of the organizations that actively accommodated e-business solutions and strategies in their management system is Pizza Hut. It is in this regard that the research is undertaken to analyze the key implications of e-business on some aspects or function of Pizza Hut and evaluate how this has impacted on the way it is managed. Specifically, the following concerns would be addressed: (1) a presentation of a critical analysis of e-business on Pizza Hut’s operations and the potential challenges and opportunities it creates for modern business; (2) a discussion of the background of Pizza Hut with the rationale for choosing e-business as influencing current operations; (3) a critical evaluation on how this issue is being addressed within Pizza Hut and how this impacts on the way it is managed; and (4) a presentation of conclusions and recommendations, as deemed appropriate. E-Business at Pizza Hut Net essence defines e-business as “using the internet to connect with customers, partners, and suppliers. But the term also implies the transformation of existing business processes to make them more efficient” (Net essence, n.d., par. 1). For Pizza Hut, e-business through online ordering has significantly increased their volume of sales in various strategic locations worldwide. In the UK, for example, the official website of Pizza Hut revealed that “since we launched www.pizzahut.co.uk in March 2007, our online sales have increased at an average rate of 25% per month - and this month we celebrated our millionth order placed through the website!” (Pizza Hut UK, 2008, par. 1). In Australia, the online ordering option was implemented in 2001 and has been found to be successful especially in the 18 to 24 years old age ranges who are frequent users of the internet (IBM, n.d.). Aside from online ordering options provided by e-business, Pizza Hut, through Aladdin’s eToken, “a fully portable USB authentication device, provides remote Pizza Hut UK users with a simple, yet strong method of protecting their digital identity. Replacing the organization's previous RSA SecureID solution, eToken heightens security while also streamlining the authentication process for users when remotely accessing networked data” (Fox, n.d., 1). This system uses a USB devise to authorized business managers from remote locations to access crucial information using a personal identification number. The e-business applications and solutions for Pizza Hut provide them with opportunities for sales generation and to ensure that security in access of relevant information remain confidential and private to business managers and authorized users only. Brief Corporate Background of Pizza Hut The origin of Pizza Hut is traced in 1958 when Frank and Dan Carney envisioned the opening of a pizza restaurant in Wichita Kansas. In a span of 14 years, 1000 Pizza Hut stores all over the United States were opened. By 1973, “Pizza Hut went international with restaurants in Japan, Canada & England. The first UK Pizza Hut opened in Islington, London” (Pizza Hut UK, 2011, par. 28). In an article on the history of the internet, it was revealed that in 1994, “shopping malls arrived on the Net. You could order pizza from Pizza Hut online or bank at First Virtual Bank, the first cyberbank” (History, n.d. par. 4). Since then, the importance of e-business on Pizza Hut’s operations, particularly in encouraging increases in sales, has been highly significant. Peters (2004) reported that “Pizza Hut Inc.’s PizzaHut.com is seeing an increase in orders from customers who prefer the speed of one-click online ordering to the frequent experience of waiting on hold to place a phone order, Kelly Rader, manager of Internet ordering, tells Internet Retailer. The web is particularly helpful in smoothing out peak ordering periods on weekends, she adds” (Peters, 2004, par. 1). The benefits of fast, reliable and options for recognizing repeated orders from past online visits accord regular customers with the ease of ordering Pizza Hut products at the comfort of their homes or offices, as the place may be. Evaluation of the E-Business Due to the positive response of the customers and the increased sales generated from online ordering options, Pizza Hut outlets continue to review their strategies in the light of further improving customer service. As stated in their official website, Pizza Hut continues “to invest in upgrading and developing online services. Customers can already enjoy freshly baked pizzas, delivered at a time specified by them. We've gone one step further recently, for those customers who do not live near a Pizza Hut Delivery store; they can now make an order online and collect it from one of our dine-in restaurants. In the last two months we've also introduced an online table reservation tool, making it even easier to organise a night out with friends and family” (Pizza Hut, 2008, par. 5). In an article written by Melanson (2010), the latest developments on mobile technology are seen to be instrumental in transforming future ordering options to include latest mobile applications. As Melanson (2010) averred, “Pizza Hut CMO Brian Niccol is quoted as saying that "mobile accounts for almost 50 percent of our orders" and that mobile orders have actually surpassed orders via the Web from home” (Melanson, 2010, par. 3). There are eminent advantages of ordering online. As reported by Sophie (2008), ordering from Pizza Hut online would give the following perks and discounts to first-time customers: a 20% off for first time customers, an acknowledgment electronic receipt sent through one’s email indicating the time and amount charged for the order, and future options for promotions and deals (Sophie, 2008, 1). Although, some customers believe that placing one’s order through the phone is still a faster option. Further, the only other set-up was the choice in making one’s payment: through credit card or cash. With the success of Pizza Hut’s online ordering system, Litz (2010) reported that “the company is upping its online "fun factor" by expanding the type of engaging features that helped its separate online ordering app garner awards and fast adoption after its debut last July.  The new website's features include "iconic ordering" that allows people to see their pizzas as they customize them, intuitive design that recalls user information for "two-click reordering," and Spanish ordering capability” (Litz, 2010, pars. 3 & 4). With a reported 20% of online sales, Pizza Hut have strategically managed e-business solutions and applications taking into account customers’ needs and aimed at achieving customer satisfaction at its utmost level. The significant factors that Pizza Hut should maintain in addressing online orders is its reliability in meeting delivery time and in complying with the highest standards expected from their products. Concurrent with improving online ordering system, Pizza Hut management recognizes the need to invest in upgrading and improving the physical facilities of its stores. Their official website boasts of the organization “not just investing in its online service but also in its bricks and mortar sites. We've recently announced a ?17m investment in refurbishing the estate over the next couple of years. 100 stores have already been refitted with a new look interior and logo, and we're making significant changes across other areas of the business, too. This includes improvements to our service, a wider menu range with improved variety and improved nutritional profile of products, and a new kids menu with hidden veg and free salads with every kids meal” (Pizza Hut UK, 2008, par. 6). Conclusions and Recommendations With the trends in corporations focusing more on e-business and expanding into global markets, the challenges faced by fast food restaurants like Pizza Hut is the influx of competitors serving the same clientele and using the same online medium. In this situation, Pizza Hut has repeatedly being pegged against Domino’s. Actually, the competitive advantage of Pizza Hut is more pronounced in terms of social media, mobile marketing and on equal footing with Domino’s in online advertising. According to Young (2009), “both Domino's and Pizza Hut just about tripled their investment in online advertising in 2009 vs. the previous year. Pizza Hut tied back into its key product calendar pushes online, sending users to its website to order. It appeared to target a younger and more female-skewed audience on sites including ETonline, Cosmo Girl, Elle, Fandago and FoxNews” (Young, 2009, pars. 19 & 20). In this regard, Pizza Hut must focus on strengthening its foothold in the online ordering to top Domino’s competitive strategies. Focus must be made in fast and reliable service, as well as delving into giving promotional discounts and perks to their target group with the capacity to frequent internet sites and prefer home deliveries. In addition, since frequent and regular customers information are already in the organization’s data base, other proactive promotional campaign must be directed to this target group to solicit repeated orders and encourage increases in sales. The effect of e-business on the financial success of Pizza Hut is significant. The online ordering strategy has been deemed effective as seen in one of the merits and awards received by the organization. In 2010, Pizza Hut has been named “Best Pizza Restaurant Chain at the 2010 PAPA awards, the Oscars of the pizza and pasta world! PAPA judges award the Best Pizza Restaurant Chain to “outstanding” companies which “set a standard for others to follow”. The honour is recognition for our passion to continually elevate our customer experience by offering new and exciting food at affordable prices” (Pizza Hut UK, 2011, pars. 1 & 2). Overall, the research was successful in achieving its objective of providing an analysis of the key implications of e-business on the sales and financial performance of Pizza Hut and was able to evaluate how online ordering has impacted on the way it is managed. As global organizations continue to expect an increasing trend in e-business as it influences various aspects of the organizations’ operations, stakeholders must continue to assess its role in terms of providing increased benefits to consumers in various markets worldwide. References Fox, R. (n.d.). Pizza Hut UK Cooks Up Strong Security for Remote Employees. Retrieved 05 February 2011. < http://www.it2trust.com/reference/aladdin/SS_eToken_Pizza_Hut.pdf> History of the Internet. (n.d.). Retrieved 05 February 2011. IBM. (n.d.). Pizza Hut reaches for bigger slice fast-food pizza with Web ordering. Retrieved 05 February 2011. < http://www-07.ibm.com/services/pdf/pizza_hut_case_study.pdf> Litz, J. (2010). Pizza Hut revamp spurs new wave of online ordering. Retrieved 06 February 2011. Melanson, M. (2010). Pizza Hut Says Half of Orders Will Come From Mobile [Update]. Retrieved 06 February 2011. Net essence. (n.d.). Business to Consumer. Retrieved 05 February 2011. Peters, K. (2004). 1-click ordering boosts sales at PizzaHut.com. Retrieved 06 February 2011. Pizza Hut UK. (2011). Our History. Retrieved 05 February 2011. Pizza Hut UK. (2008). pizzahut.co.uk celebrates its millionth online order. Retrieved 05 February 2011. < http://www.pizzahut.co.uk/restaurants/news/millionth-order.aspx> Sophie, S. (2008). The Pros and Cons of Ordering from Pizza Hut Online. Retrieved 05 February 2011. Young, A. (2009). Pizza Hut vs. Domino's: Who Delivered the Best Media Strategy? Retrieved 06 February 2011. Read More