Pizza Hut Case Study

Case Summary

• 1984 Celebrated the opening

• Added value to PepsiCo

• Pepsi was organized into 3 business

• Plan to target Brazil

• Political Background

• Economic Background

• High Inflation

• Oil Shock

• Low Per capita Income

• Entered In Brazil 1985

Q1: What are the location-specific advantages that Brazil has to offer? How do these advantages differ from those offered by other markets in Latin America?

Ans: In 1994, Pizza Hut celebrated the opening of its 10,000th restaurant worldwide by featuring the former Brazilian soccer star, Pele, kicking an autographed soccer ball through a ceremonial ribbon to open a store in Sao Paulo, Brazil. Pizza Hut’s ten year plan in the mid 1990s would put Brazil as the second or third largest market in the world by 2005. In this context, Brazil offers a number of location-specific advantages, which someway differ from the other market in Latin America. The advantages are-

• Massive Size: Its massive size is the first location specific advantages than of other countries in Latin America. In compare to other countries in Latin America, Brazil is the largest country. For example-Mexico, Colombia, Paraguay, Uruguay, Argentina etc. which are small countries than Brazil in compares to land area.

• In 1998, Brazil was the fifth largest country in the world of population with 156 million

• The 12th largest country in the world with respect to Gross National Product(GNP), but it only ranked 103rd in per capita income.

• It was also the seventeenth largest country in the world in land mass.

• Brazil is very urbanized with Sao Paulo, the second largest city in the world after Cairo and Rio de Jeneiro the 16th largest city in the world. It has ranked 42nd in the world in urbanization.

• The population is clustered in the major cities on the coast so Brazil ranked only 175th in population in the world density even lower than that of the United States.

Figure 1 : Land area of Brazil and other countries in Latin America

Q2: Should Pizza Hut put more of its efforts in expanding in Brazil or somewhere in South East Asia? Why?

Ans : Brazil would be a better way to go since they are more Americanized and it would