Business Process Management at Pizza Hut - Coursework Example

? Business Process Management at Pizza Hut ID Management Introduction to Report A lot many of us may know whatPizza Hut is and what it offers in the market, but a very few may understand how it operates in the market place and what distinguishes it from the rest of the competition. This report is aimed at providing a detailed account and analysis of business operations management at Pizza Hut. In this report the core focus will be the business operations of Pizza Hut that makes it a renowned and established brand in the Market. The linkage of different business operations over one another and how Pizza Hut maintains consistency in its operations in all the regions of the world where it operates, will also be highlighted. Pizza Hut, Background Pizza Hut originates from the largest economy in the world, United States of America. It is a multination restaurant franchise that offers its customers with a varied range of pizzas as the primary offering. Over the period of time the Pizza Hut Menu has been revitalized bearing in mind the constantly rising needs and demands of the customers and the dynamics of the competition. In the contemporary market environment Pizza Hut offers its customers with sidelines such as chicken and Buffalo wings, garlic breads and salads in addition with to the primary product, pizza. Pizza Hut came into existence in 1958 in America as the first ever national pizza chain and since then it has grown and developed as a major player in the fast food industry. Over the period of time Pizza Hut got a strong standing in the industry and today it has risen as a strong and challenging competitor to one of the largest food brands in the world such as KFC, Mc Donald’s, Indulge, Smart Chicks and Pizza Track. However the recipe, brand loyalty and a specialized offering gives Pizza Hut an unparallel advantage in the market (Pizza Hut, 2011). One of the critical success factors of Pizza Hut is its ability to adapt to the local taste and requirement. Pizza hut has been observed to be operating on the “think global and act local” strategy. To meet the market demands in terms of pricing and affordability Pizza hut came up with its pan-sized pizza that serves to be one of the obvious choice for people with a restricted diet or pockets not deep enough to afford a large sized one. Weekends, midnights and various other seasonalities were introduced by Pizza Hut to make sure that it caters to the needs of all kinds and types of customers in all parts of the world where it operates. This creative and unmatchable value proposition maintained by Pizza Hut has made it operational in more than 90 different countries in the world with thousands of outlets employing more than thirty thousand people (Pizza Hut, 2011). Organizational Structure The formal structure of an organization, the chain of command and delegation of authority are key principles that determine the success of any organization in the market place. Initially Pizza Hut was a co-inception of two brothers Franky and Dan in a small town located in Kansas. The project grew by leaps and bounds, and the business that was initiated with mere $600, now had hundreds of branches across the state and the country. In 1972, the company went public and was listed in the New York Stock Exchange. Pizza Hut was welcomed at the stock market as a blue chip investment with guaranteed returns to its stakeholders and share holders. The company is reported to have issued some 400,000 common equity shares to the investors in the general public. This investment boosted the cash inflows for the company and resulted in an unexpected situation for the management. Pizza Hut instead of growing at a stable and sustainable rate, started to inflate. Some landmarks such as achieving million dollar sales in the US alone and opening of outlets in Munich and Sydney in the very same year. This extraordinary pace of growth and development would have been seen as signs of prosperity and success by the shareholders but the management looked at it in a different manner. The management perceived it to be a flood of inflow that may weaken the control of the management over Pizza Hut a great deal. With the business expanding at lightening pace, management feared a loss in managing the affairs with the same commitment and efficiency as it used to be in the past (John Cronin, 2011). Going public triggered Pizza Hut to expand into untapped and profitable regions like United Kingdom and Japan by 1973. With penetration of the company to newer regions, the stage demanded a revision in the organizational practices. Pizza Hut had to revisit its organizational structure and to make it make a lot of sense, bearing in mind the multinational image of the company a hybrid approach was adopted. Generally a centralized approach to management and decision making was prevalent at Pizza Hut, but with its expansion to newer territories, it was realized that a centralized approach may tend to create hurdles in task execution and thus may deteriorate the efficiency in the system. Therefore a centralized approach was followed at the global level while a decentralized one was adopted at the regional level. This hybrid approach resulted in a development of Pizza Hut as a “glocal” brand. As now Pizza Hut was maintaining its global standards of quality while bearing in mind the local needs for taste and ambience. Quality, taste, recipe and pricing related decisions are made at the central level, while the execution and the freedom to implement the changes in a personalized manner are delegated to the regional managers and executives. Such an approach is impetus to the expansion and emergence of Pizza Hut as one of the largest restaurant chains in the world. In 1977, Pizza Hut was acquired by Pepsi Cola. This lead to the duplication of the Pepsi Cola organizational structure over Pizza Hut, and resulted in further bolstering the brand and helping it continue with the growing trend (John Cronin, 2011). The chain of command and the delegation of authority as practiced in Pepsi Cola and implemented in Pizza Hut is as follows, The figure summarizes the flow of communication that takes place at Pizza Hut. This type of organizational structure is important as this allows a certain set of commands and instructions to be followed at all levels of the organization. With one MD looking over all the departments, empowers him to integrate all the departments and to keep every departmental head at the same wavelength (Pizza Hut, 2011). Business Processes and Systems Producing the best product is not the sole purpose of a business, especially today when the marketing environment has become so complex and competitive. Maintaining quality standards and delivering the customer with not only what he expects but with something extra all the time, has make the market place a fierce battlefield. The customers are so powerful today that they do not pay to compromise anymore. With a large number of options to chose from, the company that excites the customers with its products and produces a “wow experience” every time will only succeed in becoming the top of mind player in the market with the highest share of the customer’s wallet (In Rule Technology, 2012). Pizza Hut has gone a long way in terms of the modifications that it has made to its delivery and supply system. During its early days, Pizza Hut was a restaurant that specialized in serving food to its customers at the restaurant. But now the trend has changed. The customers do not want to limit their freedom by sitting inside the restaurant. To keep the pace up with the moving world and its dynamics, eating habits of the customers have changed. Nowadays customers prefer to enjoy food at location of their convenience. Considering the dynamics in their environment, Pizza Hut introduced its home delivery service that helped it become a more obvious choice for the customers because of the convenience that it offered in terms of the delivery of the product at their doorstep. To deliver the value promised to the customer, efforts made by one single department may never be sufficient. Therefore any organization that has to succeed in the market has to make a bigger effort to look after the customer and to satisfy him in the best possible manner. For this to happen, each and every department in the organization has to shoulder the responsibility of contributing its bit to the customer value chain. A concept that is taken into account in this regard, in the contemporary world, to ensure that the organization takes a holistic perspective of looking after the customer through continuous process reengineering is called Business Process Management (BPM). Pizza Hut, too, has adapted to this concept (In Rule Technology, 2012). The previous figure is the depiction of a typical BPM process. BPM addresses three core areas in general including Workflow, Business Activity Monitoring and Business Process Modelling. Reflecting this model on the Pizza Hut operations then it has been observed that the development of policies, procedures and the desired standards are predefined by the top management. These policies and procedures are communicated to the departmental heads, who then communicate them to the lower level managers and employees. This communication phase is of particular importance as even though top level management defines what needs to be done, but the execution is completely dependent up on the lower management and staff. This interdependence of departments over one another and the unity of command as observed in the organizational structure create synergy and this is reflected in the uniformity of its operations and the delivery of standardized services by thousands of Pizza Hut outlets to millions of customers worldwide (In Rule Technology, 2012). Business Activity Monitoring is a significant part of the BPM. At Pizza Hut this is the phase of the process where customer is actually incorporated into the process. The customers are frequently questioned and surveyed to identify the loopholes in the entire process and to recommend ways of improvement. These questionnaires filled by the customers and comments are forwarded to the branch managers at Pizza Hut and a reverse communication takes place as these comments ultimately reach the management levels that do the decision making. Once the decision makers are onboard with the customer feedback, prevalent practices in the customer value delivery process are revisited. This leads the organization to a new phase in the BPM, the Business Process Modelling. The decision makers make new policies and standards of delivering value to the customers in a manner that customers have actually chosen for themselves. With the comprehensive analysis of BPM practices at Pizza Hut it can be suggested that Pizza Hut adds value to its process at the level of Business Activity Monitoring. This is where Pizza Hut holds the edge and can be said to have been doing things the right way. In this modern world, where consumerism has empowered the customer to the maximum possible manner, customers want the best value out of each penny that they spend. This has made it ever more difficult for the organizations to satisfy the customer demands. With its strategy of incorporating the customer and taking him onboard with the process reengineering and product design, Pizza Hut has definitely made a right step forward in the right direction (In Rule Technology, 2012). In light of the personal business and management acumen, it is advisable for Pizza hut to make the best use of internet technology and social networking to further enhance its communication with the customers. Word of mouth is one of the most influential and powerful tools of communication. Social networking will enable Pizza Hut to stay ahead of its competition and to influence the customer’s buying behaviour in a positive and cost effective manner. More importantly the target market of Pizza Hut have somehow transformed into people belonging to younger age groups, from the initial family centred image, so to take them onboard social media may become the best possible platform available. Getting people to talk about Pizza Hut, conducting online surveys and demonstrations at an elevated scale across the globe shall be the next steps taken by Pizza Hut to further boost its market share. Quality Pizza Hut operates on the principles of Total Quality Management. Pizza Hut focuses on three main areas when it comes to quality management, Product, People/ Processes and Marketing. To maintain a particular environment at all the Pizza Hut outlets and to deliver the same quality and taste of food to the customers, extensive training sessions are organized to impart learning to the employees. The training sessions are aimed at transmitting a particular mindset to the employees and making them aware of the responsibilities that the organization expects them to fulfil (John Cronin, 2011). On the marketing side a more local approach is followed. The marketing department and R&D work in close contact with each other to ensure they deliver the best possible solutions to the customer needs. Adapting to the local taste has been one of the salient features of Pizza Hut. For instance in India, bearing in mind that the local vegetarian population, Pizza Hut has developed vegetarian Pizzas, similarly in other south Asian Markets, Pizza Hut has developed local recipes and flavours of pizzas that are not available in Pizza Hut franchises located in other regions. So standardization of Product and People/ Processes and customization of Marketing processes has casted the magic spell for Pizza Hut and over the recent past has resulted into a successful strategy for this company in a highly competitive market. Conclusion In a nutshell, Pizza Hut has adapted itself well enough to survive and prosper in the contemporary market environment. The most significant factor that has enabled Pizza Hut to have a strong holding in the market is its focus on BPM. With a holistic approach to customer satisfaction, Pizza Hut has become the ultimate brand in the market that satisfies its customers and also take them onboard with the decision making process. In light of the entire discussion, following recommendations shall be forwarded to Pizza Hut, Focus on the digital medium for advertising and communication Use social networks to take the customers onboard with the two way communication Train and develop employees to maintain quality standards as per the international and local environments Look to diversify by investing into different product categories Provide ultimate experience to the customers by putting them first in the priority list References In Rule Technology, 2012. In Rule. [online] Available at: http://www.inrule.com/products/business-rules-BPM.aspx [accessed 6 February 2012] John Cronin, 2011. Business Franchise. [online] Available at: [Accessed 6 February 2012] Pizza Hut, 2011. Our History. [online] Available at: [Accessed 6 February 2012] Read More