Product-Market Growth Matrix Essay

Introduction pizza army hut is base in Wichita, Kansas USA 19581. A woman and her two sons created pizza recipes. From here, a family friend advised the sons to untied their own pizza Parlor. 2. pizza chanty is one of the flagship brands of Yum Brands, Inc. , which similarly has KFC, Taco Bell, A&W and vast John Silvers under its umbrella. pizza hut is the worlds gargantuanst pizza compass with over 12,500 restaurants across 91 countries 3. In India, pizza field hut has 133 restaurants across 34 cities, including Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Pune, and Chandigarh amongst early(a)s.Yumis in the treat of rise pizza shack restaurants at many more(prenominal) locations to religious service a larger client base across the country 4. Borrowing $600 from their mformer(a), the two brothers purchased second-hand equipment and rented a sm each(prenominal) building on a busy intersection in Wichita, Kansas. The result of their efforts was the first pi zza pie hovel and the foundation for what would be scrape up the largest and the some successful pizza restaurant in the world 5. pizza pie sea chantey franchisees exemplify the entrepreneurial spirit, which launched their dodge back in 1958.Through interest and initiative, the pizza sea chantey system was capable to develop untried territories in the United States and overseas. Today, franchisees and joint-venture partnerships account for more than half of the pizza pie Hut systems full(a) units. Their development on the international front is a hot indication of the result that has characterized their system. Following the opening of the first international restaurant in Canada in 1968, the pizza pie Hut restaurants quickly appe atomic number 18d in Mexico, conspiracy America, Australia, Europe, the Far East and Africa. Today, pizza Hut operates in more than 100 countries and territories throughout the world 6.When pizza Hut opened its electrical wall plug in Baroda, Gujarat they firstly thought that they should make a juvenile pizza to the recipe of the local style in order to attract the local population. g They decided to entrust the pizza check to the customers taste of choice7.This essay aims to answering the following question Should Pizza Hut open a unused progeny in Baroda? 1. http//www. pizzahut. com/OurStory. aspx 2. http//www. pizzahut. com/OurStory. aspx 3. http//220. 226. 195. 78/pizzahut. co. in/ or so_us. php 4. http//220. 226. 195. 78/pizzahut. co. in/about_us.php 5. http//www. pizzahut. com/OurStory. aspx 6. http//www. pizzahut. com/OurStory. aspx 7. (Manager of Pizza Hut). in the flesh(predicate) discourse RESEARCH QUESTION Pizza Hut is an established brand all over India. To change magnitude the growth of the wise outlet, Pizza Hut recently set up a bran- natural commercialise search on the outskirts of Baroda with the enthronisation of __ Basically, Pizza Hut firms in India send Managers to spread out proper aw beness about their naked as a jaybird outlet among the customers through opposite types of advertising and keep the customers aw ar about their advancements in flow rate outlets 10.Commercially, I expect that the opening of the new branch depart pebibyte to an increase in gross revenue in Baroda, Gujarat, and could increase the food commercialize sh are of Pizza Hut. For this rationality, they want to be able to successfully market their new firm when it is commercially launched. As previously mentioned, to increase its growth and successfully market their upcoming outlet, Pizza Hut has been reviewing various promotion strategies akin price reduction, to increase the price in their marketing bud start up and increase in number of rounds 11.So change magnitude the issue by opening the new outlet and to increase the number of staff to work in both of the outlets is a strategy that Pizza Hut is strongly considering in order to increase their growth in the domestic market 12. 8. (Manager of Pizza Hut). own(prenominal) audience 9. (Manager of Pizza Hut). Personal oppugn 10. (Manager of Pizza Hut). Personal interview 11. (Manager of Pizza Hut). Personal interview THEORETICAL FRAME WORK The Growth of a care croupe be measured in many different ways such as assets, gross revenue revenue, operating profit, market share, grade added, and number of employees 13.As tuition of pizzas is involved, Pizza Hut believes that what they bring new in the market is not compared with any of the ingatherings of any another firm which is sell pizzas14. I commercially expect that the opening of the new firm forget lead to increase in sales in Baroda, Gujarat, and could increase the market share of Pizza Hut. out-of-pocket to this, they want to be able to successfully market their new firm when it is commercially launched. Pizza Hut aims to convince the customers to set down their new wrinkle, (target market) 15.The other promotional method used by Pizza Hut an d to spread the awareness about their new outlet is to do market interrogation. I did the market enquiry for Pizza Hut so that they female genitalia locate their new outlet where there are more potential consumers. High income assemblage was too asked about the opening of a new outlet, before it is brought up in the market. Pizza Hut believes that the methods used to seek on opening a new outlet take hold of the assistance of the customers for long time, so that they provoke maunder the outlet frequently16. For reasons mentioned in a high stern, growth is widely regarded as the nigh gilded method to increase the profit level. 12. http//www. tutor2u. sack up/business/presentations/strategy/businessgrowth/default. html 13.(Manager of Pizza Hut). Personal interview 14. _________ 15. (Manager of Pizza Hut). Personal interview 16. (Manager of Pizza Hut). Personal interview METHODOLOGY To reach a suitable conclusion, an in-depth qualitative and quantitative analysis s vestibu le be conducted by using different business tools to the primary data as well as the secondary data collected. The primary data contains the interview of the Manager of the Pizza Hut outlet which already exists, the opinion of the customers who cut the exiting outlet and a few other plenty. food market research This depart contain the content of the market research and what it entails. This was conducted by me. Analysis of market research This will contain the graph and an explanation about how many population will visit the new outlet (assumption) from the old outlets daily earning. Swot analysis This will contain the emergenceivity, weakness, opportunity, and threats of the business for opening the new outlet. Ansoffs matrix A model which identifies growth strategies for a business and it is based on an analysis of their crossings and their market.Pest-g This will identify the political, stintingal, social and technological, as well as the environmental problem of the firm . follow analysis Cost analysis will be conducted to find out the quantifiable and unquantifiable make up involved in increasing the personal selling. MARKET RESEARCH Market research is the collection, collation and analysis of the data relating to the marketing and aspiration of the goods and the services18. Market research helps in opening the new outlet, tells us were we stand in the market and how we can improve. How many times does the customer visit Pizza Hut?Group of people More than at once a week Once a week Fortnight periodical or slight Family 04 20 45 25 College students 35 50 36 19 Above 50 00 05 36 30 Teenagers 40 45 26 17 (18) Here the market research data is organized according to age group. Market research make of the location Yes No (%) (%) Sayajigunj 66 34 Karelibaug 68 32 pic Here I capture conducted the market research for the two different areas and I submit come to a conclusion that in Karelibaug there are 90% of people saying yes to open th e new outlet 20.This is due to one outlet of Pizza Hut not providing deli really services to yonder areas21. So if it is in that area then many people can visit the outlet and this will give more profit to Pizza Hut. As people from Fathegunj, Sayajigunj, city area and Karelibaug can visit as it will be nearer to them 22. 17. market research done by interviewing different people 18. business studies book by Dave hall pg 147 19. interviewing different age group of people 20. People gave reason that why in these two areas. 21. Told by the people staying in that area. psychoanalysis OF THE PRIMARY DATA The conclusion of the market research which I bring forth done for Pizza Hut will be study to identify specific market attributes such as the manner in which the customer will answer more. In addition to this, it will identify important information such as the effectiveness of the market research results given by the customers will be discovered. From this data, it will be possible t o judge the weaknesses of Pizza Hut. Recommendations will then be made by me on methods which Pizza Hut can film to overcome these weaknesses.Once Pizza Hut overcomes these weaknesses, it will wee a better chance to successfully market their new outlet, and at the same time increase the sales from their current outlet. The graph below compares the frequency of teenagers who visit Pizza Hut as opposed to college students. pic 22 The ratio of college student is more than teenagers23. This means that on an average, college students visit Pizza Hut more compared to the teenagers. This graph tells us how many families and those above 50 wish to go to Pizza Hut. pic24 22. market research done by interviewing different people 23. (Manager of Pizza Hut).Personal interview 24. market research done by interviewing different people deck out ANALYSIS Swot analysis swot analysis is an analysis of the knowledgeable strength and weaknesses and the external threats and opportunities that Pizza Hut faces. The swot analyses will illustrates how the external opportunities and the threats can be matched with the Pizza Huts internal strength and weaknesses to result in a set of possible strategic alternative.This would identify Pizza Huts distinctive competencies and the opportunities that the Pizza Hut is not currently taking a due to overleap of appropriate resources swot means S-strength W-weaknesses O- Opportunities T-threats Strength(S) these are the things which I observed, Pizza Hut and their staff do and which is the strength for them They are well known for their pizzas 26.They provide good superior, taste and quick service 27. Their good service grooming, cleanliness, and good interaction with the customers make customers want to visit them again 28. due(p) to their good taste and grooming, the other domestic pizza outlets try to compete and learn from Pizza Hut 29. Reputed brand, market excepted very easily, Due to the above, Pizza Hut makes good profit30.Pizza Hut has the ability to provide its customers with atomic reactors, offers and specials so that they can save money and get more honor. This is a strength for the organization as it makes customers purchase more while receiving more rank for their money. Customers use these vouchers and specials when ordering in bulk or for everyday orders. Weaknesses (W) these are the things which I observed and Pizza Hut does poorly and in which they can be affected are During the weekends, Pizza Hut is full of customers, during that time the service is poor 31. there is little to no browse for the people to sit who are waiting to be seated32.Availability of other multinational outlets like mack Donald and Dominos will be the competitors of Pizza Hut too. 33 Opportunities (O) the directions which the business could take in emerging like By opening a new outlet there will be an opportunity for growth of the business and development for employees34. If a person was previously employed by Pizz a Hut and has passed the Pizza Hut course with the appropriate certificate, then they are able to receive double their salary35. Pizza Hut is a branded and a multi-national chain, therefore it allows staff salaries to be double that which is offered to other staff in other companys36.Threats (T) the threats to a business arise from the activity of the competitors and failing to take opportunities like Pizza Inn is the domestic pizza outlet in Baroda both of them are doing very good profit-wise therefore Pizza Inn is a threat for Pizza Hut37. Pizza Inn is a long-familiar organization to the Baroda community as it too provides good quality and taste and this is a threat to Pizza Hut as this is one of Pizza Huts strengths. 25. business studies book by Dave hall pg 38 26. http//www. tutor2u. net/business/strategy/SWOT_analysis. htm 27. (Manager of Pizza Hut). Personal interview 28. (Manager of Pizza Hut).Personal interview 29. (Manager of Pizza Hut). Personal interview 30. (Manager of Pizza Hut). Personal interview 31. (Manager of Pizza Hut). Personal interview 32. (Manager of Pizza Hut). Personal interview 33. (Manager of Pizza Hut). Personal interview 34. interview taken while doing market research 35. (Manager of Pizza Hut). Personal interview 36. (Manager of Pizza Hut). Personal interview 37. (Manager of Pizza Hut). Personal interview 38. (Manager of Pizza Hut). Personal interview THE ANSOFFS MATRIX The ansoff matrix The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy38.Ansoffs matrix will allow the firm to consider the alternatives open to it for go in a new market or entering new product into the market39. Product Existing smart Existing Market penetration Product development New Market development diversification Market Market penetration market penetration is used to achieve the growth in the existent market with the real product40. Market penetration uses the marketing mix to push the product wh ich is gaining as much as market share and as quickly as possible41. Market penetration seeks to achieve four main(prenominal) objectivesIncrease usage by existing customers, maintain or increase the market share of current products42. Pizza Hut is the branded outlet so that people use the substitute outlet slight (Pizza Inn, u s pizza, Uncle Sams Pizza, and Dominos). Pizza Hut encourages customers to use their outlet more regularly by providing new taste to the customers43. Product development this is concerned with marketing new or circumscribed products in the market for the customers 44 like Normal pizzas intend to act as a backup for the new product which will be introduced45.Market development this involves the marketing of the existing product in the new market such as As Pizza Hut has one outlet already in the market, they will open a new outlet in Baroda but in a different area. They will introduce some new products when they open their new outlet. However, they will n eed to slip away the marketing of their old and classic products along with the new products46.Diversification this will occur when the product is real for the new market. Diversification allows a business to move away from the trust upon the present market and product47. 38http//www. tutor2u. net/business/strategy/ansoff_matrix.htm 39oxford study course book by jo shirk pg 32 39. http//www. tutor2u. net/business/strategy/ansoff_matrix. htm 40. business studies book by Dave hall pg 239 41. oxford study course book by jo toy pg 32 42. http//www. tutor2u. net/business/strategy/ansoff_matrix. htm 43. (Manager of Pizza Hut).Personal interview 44. (Manager of Pizza Hut). Personal interview 45. Manager of Pizza Hut). Personal interview 46. business studies book by Dave hall pg 239 PEST G ANALYSIS Pest g this will look at the external environment and the global factors that whitethorn or will affect a business. It can provide a quick and visual representation.It is normally divided into five external twists on a business-political, economic, social, and technological and green46. Political this is concerned with how political developments, regionally, across the nation and internationally might affect a businesss strategy47. Political development is not so relevant in this instance as Pizza Hut has an existing established branch which is not affected by this external factor, the political issues are not so important because they do have the outlet in India and Baroda. For opening the new outlet government factors are not important as it already has opened one outlet48.Economic this might include the analysis of a assortment of economic factors and their effect on business they include consumer activity, economic shifting, government policy, the effect of change in product and labor markets49. Pizza Huts outlet which is Baroda, Gujarat has competitors in Baroda, Gujarat50 however, these are not Pizza Hut branches they are other competitors such as Dominos and Pizza Inn. These have an economic external influence as it affects the consumer activity as customers may prefer to go to Dominos if there is better service, quality and price offered.The new place suggested trough market research, there mainly the people with their families and above 30 will visit. It is not that the youths wont visit but there are less youths in that area compare to the area where the current Pizza Hut is located. hearty how is Pizza Hut affected socially? It is not likely that Pizza Hut will be affected socially as each age group visits Pizza Hut51. Due to the location of the old Pizza Hut site (located near commercial places) it attracts a lot variety of consumers. The new site will be located in a suburb where there are families therefore the market will be families.When a whole family eats a meal at Pizza Hut, they tend to splurge on extras such as drinks and sides. This is positive for the organization in footing of profit. However, in Karelibaug, families wont come daily or once a week to have pizzas so it can be affected socially. Generally in the new outlet older segment people will visite. Technological Businesses operate in a world of speedy technological change. The organization needs to regularly review the impact of new technologies upon their activities. The product can fix old-fashioned quickly. The production method can become out of date52.Pizza Hut looks that how they are different from other firms such as Pizza Inn, Dominos pizza, us pizza and many other domestic outlets for pizzas. Even Mac Donalds is a competitor. One technological factor which could effect the environment is how Pizza Hut creates its products such as the production line in which a pizza is made. 47. business studies book by Dave hall pg 38 48. business studies book by Dave hall pg 38 49. (Manager of Pizza Hut). Personal interview 50. business studies book by Dave hall pg 38 51. (Manager of Pizza Hut). Personal interview 52. (Manager of Pizza Hut).Pe rsonal interview53. business studies book by Dave hall pg 38 COST ANALYSIS Cost analysis is currently a some what controversial set of methods in program of valuation one reason for the controversy is that these terms cover a wide range of method, but are often used interchangeably. There are two types of embody associated with hiring new place. They are fixed represent and variable cost. Both these cot will be identified to check the monetary growth of the undergoing new outlet. Both are classified as below Fixed cost Hiring charges foe the new place Salary of the staff Minimum hiring charges of telephone. variable cost Production cost Office usage almost amount of profit for the new outlet May by through which you will be able to fine out pbit (profit before interest and tax), pbt (profit before tax), pat (profit after tax). Per month Per annum Sales 1350 16200 - variable 60 720 contribution 1290 15480 - fixed cost 45 540 PBIT 1245 14940 - interest 78 940 PBT 1167 14000 - tax 350 4200 PAT 817 9800 55 From the above assumption we can conclude that profit on pbit is approximately equals to 65. 60% 1260 720 100 ? = 57. 14 This is the variable cost 1260 540 100 ? = 42. 58 And this is the fixed cost. Variable cost of new outlet is higher than its fixed cost about 14. 12. Contribution of new outlet is about 96% which can be calculated by following formula Sales contribution 16200 15480 100 ? = 96 56 Variable cost depends upon number of units of new outlet but the fixed cost is fixed. Cost may also be defined in different class For example production cost office cost selling and distribution cost We can include raw material cost for the pizzas and service cost for the pizzas.In production cost all the administration expense and legal and pro charges in office expense. We can bifurcate the transportation of the delivery man and advertisement expenses as selling and distribution charges. Selling and distribution charges can depend on number of unit sold and cost up till cost of goods sold always depends on goods sold57. 55. (Manager of Pizza Hut). Personal interview 56. (Manager of Pizza Hut). Personal interview 57. (Manager of Pizza Hut). Personal interview INVESTMENT APPRAISAL Investment appraisal is the evaluation of an investment project to determine whether or not it is likely to be worthwhile.It is essential to appraise the investment Pizza Hut will undertake and to establish weather it is going to be beneficial. Below are the techniques, which will assist appraising the investment Pay back period and realise present value Pay back period This technique assesses the number of years it will take foe the Pizza Hut to recover all their initial costs. This is a very simple tool as it ignores most of the costs the firm would incur due to opening a new outlet. The cash flow is also an approximate estimate when there are too many variable then Pizza Hut cannot control.They assume that they have more cust omers and 10% more profit throughout the year than what they had the previous year. There were a few assumptions made for the cash flow. These were that the machine they used to make pizzas worked at 100% capacity and all products were sold. Pay back period for the new outlet Year Net cash flow 0 -10,00,000 1 2,00,000 2 6,00,000 3 3,00,000 3,00,000 12 months 2,00,000 ? = 8 months You can get 2,00,000 in 8 months so our net pay back period for investing RS 10,00,000 in new outlet is 2 years and 8 months. Analysis of pay back period.The pay back technique has shown us that it takes 2 years and 8 months to pay back for the new outlet. However, we learn form the market research and swot analysis that there are mainly people above 35 therefrom it would be smarter from them to do some thing which might attract the youth from other areas and influence them to visit that outlet too. Net present value Net present value incorporates the principle of time value of money by converting payments at different times to the equivalent values at the common fiber time. The discount factor used is 4% as the interest they could have got from the bank currently is 4%.I then did NVP. Year Net cash flow Discount factor 4$ stupefy value 0 -10,00,000 1 10,00,000 1 2,00,000 0. 9615 1,92,300 2 6,00,000 0. 9246 5,54,760 3 3,00,000 0. 8890 2,66,700 Analysis of net present value The new outlet will generate ____ amount after 5 years. ORGANIZATIONAL CHANGES To effectively deal with the increase in the growth by expansion, it is necessary for there to be some internal changes. It is very necessary that the staffs grooming should be done properly, so that they can serve the customers in a professional manner.When they open their second outlet from a single, Pizza Hut will have to keep some one on whom they can trust and can rely on and they have to shift a few staff from the present one to the opening one. As they opening a new outlet, they are turning from one into two outlet s. Due to this the position of many of the staffs have been will be changed. This change does not affect their work, they have an effective communication conduct among the employees. This could be in the form of giving the staff a proper atmosphere in which they can settle easily, the changes in the outlet and the goals that the Pizza Hut wants to attain.RECOMMENDATION Starting up the new outlet, ab initio it will not give them that much profit but it will definitely give some. For this 1. Pizza Hut should shift few of their staff and of course one of the leader to supervise from the existing outlet to the one which will open in the near future. 2. They should appoint few new staff for the existing outlet and also foe the futures outlet so that the one who are new in the new outlet can get t know more from their seniors who are shifted from the existing business. 3. For marketing about their new outlet they should restructure they method in which the do the marketing.4. The market research was done on few people in Baroda, Gujarat, and not in the whole of Baroda. So the extensive market research needs to be conducted across the whole Baroda, Gujarat to get the proper kind of information about the location. CONCULSION The report shows that Pizza Hut should pen the new outlet in Baroda, Gujarat, India. If Pizza Hut increases their staff, then it would be in a better position to serve the customers and if they shift few of their dexterous staff and give training to the new staff to whom they are going to appoint then they would also be in the better position.They should also shift one of the managers to the new outlet so that in case if any problem occurs then they will be able to handle it. The financial aspects of the projection are not the problem for the Pizza Hut as it is in a strong financial stage. But the recruitment of the new staff cold affects the staffs. The environment and the working portfolio of the staffs will be changed as Pizza Hut will reco nstruct the marketing set-up. So before employing the new staff Pizza Hut should let the old staff settle into their working environment.As previously said, the personal interview were only conducted in Gujarat, and the result of this only represented he view of customers from Gujarat. Hence, the further market research needs to be done to get a broader perspective on this study. The indirect costs associated with the undertaking the project will have to ascertain. As previously mentioned, one indirect cost is that a large recruitment could lead to a decrease in the motivation of the existing staffs. Other indirect cost could be in the form of the training program for the new recruits to a specialist company, so that it is done efficiently.If the new recruits do their job well, serve the customers in the proper way, follow the training properly, are groom very well and give the best service then this would motivate the customers to visit them again. Graph viewing the frequency of visits to Pizza Hut by college students and teenagers 0 10 20 30 40 50 60 More than once a week Once a week Fortnight Monthly or less time period College students Teenagers graph showing the frequency of visit to Pizza Hut by families and people above 50 0 10 20 30 40 50 More than once a week Once a week Fortnight Monthly or less time period Family Above 50.