Pizza Hut Case

I chose Pizza Hut Inc. to follow for the next 11 weeks. This company is interesting to me because I have been a consumer of it for years and thought it would be interesting to learn about how much work goes into maintaining such a popular and demanded product. Most people do not understand what it takes to operate a business that large, including me, so this will be a great learning experience with a firm I have put so much money into over the years.

Like every business, you must determine what should be produced, how it should be produced, and for whom it should be produced. With Pizza Hut, two college students from Wichita, Kansas, Frank and Dan Carney were approached by a family friend with the idea of opening a pizza parlor. The rising popularity in Pizza, especially amongst college students, made the suggestive family member approach Frank and Dan with this idea. The three did some research of their own and found this to be a good risk. The brothers borrowed $600 from their mother, purchased secondhand equipment and rented a small building on a busy intersection in their hometown. With that, the first Pizza Hut opened its doors in 1958. One year later, the company incorporated and the first franchise opened in Topeka, Kansas.

To operate a firm this large requires many major resources. The main resources used by Pizza Hut are the inventory of food to prepare these pizzas and the equipment to cook them in. To open just one restaurant requires $4,000 - $8,000 in grocery inventory and $120,000 - $125,000 in food preparing equipment such as the main ovens and prep utensils.

While Pizza Hut is affordable and can be found in most urban communities, it's target audience is the 25-34 year old male. Through internal research, Pizza Hut knew that value was also a key driver for mealtime decisions for its audience of young men – so much so that the company refers to this group as "eating machines."

I've chosen "choices involve tradeoffs – we always give something up to get something else" and "we make choices in small steps, and choices involve incentives" as my two Big Ideas towards my organization.

Choices