Explore The Background To Change Affecting Pizza Hut Business Essay

Pizza Hut is one of the flagship brands of Yum! Restaurant Int. which also has subsidiary businesses and famous brands like KFC, Taco Bell, A&W and Long John Silver’s under one brand umbrella. It is the world’s largest pizza chain more than 13,000 restaurants across 97 countries. Pizza Hut increases his operations in last five years. In India, Pizza Hut has 143 restaurants across 34 cities, including Delhi, Mumbai, Banglore, Chennai, Kolkata, Pune and Hyderabad. Great taste and quality, variety of pizzas and trademark dining experience have made it possible for the company to for double-digit growth and scale up its presence to its current size. With a 27 per cent market share of the eating-out market and over 70,000 footfalls per day across the country

Pizza Hut started its business from India in 1996, and opened its first restaurant in Bangalore. Pizza Hut maintained significant growth and acquires a maximum share of pizza market and sustained growth rate of above 40 per cent per annum. Pizza Hut operates through 95 outlets

across 24 cities in India which gave employment nearly 5000 people by the end of 2009. Pizza Hut

invested about US$ 35 million in India so far through YUM! Corporate franchisee Brands Inc is the owner of worldwide chain of pizza outlets listed in Fortune 300 Company .Since 2008 it generated more than $36 million through sales.

http://www.pizzahut.co.in/dinein/aboutpizzahut.php

Task 1

Outcome: – Explore the background to change affecting the organization

Change can be implemented through various models such :

Kotter’s eight step change model

ADKAR Model

Business process re-engineering

Kotter’s eight step change model

1. Increase urgency – inspire people to move guide and group them to make objectives real and relevant.

2. Build the guiding team – Make the groups with the right people in right place with their appropriate skills and levels.

3. Get the vision right – Arrange and make the team to establish a vision and strategy focus on creative aspects which is necessary to drive service and efficiency.

4. Communicate for buy-in – Involve as many people possible for improve the work, exchange of information and communication between the essentials and give response if any needs from people.

5. Empower actions – Processing to Remove obstacles, make promotive feedback and support from leaders and top management for reward and identify progress and achievements.

6. Create short-term wins – Set objectives and aim which are easy to obtain in big size substantial work. Manageable numbers of initiatives. Finish current working functions and stages before starting new objective function.

7. Don’t let up – Promote the growth of the institution and relating work and encourage determination of ongoing change – support and encourage ongoing progress which reports highlight obtained and big significant prospective work.

8. Make change stick – Recruitment promotion and change of leaders which enforces the value of success.

http://www.associatedcontent.com/article/237685/[email protected]_pg4.html?cat=3

ADKAR MODEL

Change often brings high levels of stress and disturbance to people.ADKAR change method in the corporate world often eliminates many of the negative and harmful effects associated with new procedures.

1. Awareness. Gives benefits to all levels of staff and aware them about need of changes to the organization, changes for the sake of seldom is useful. Change is to apply for improvement of the business operation which helps to be competitive in market. This is very necessary for success.

2. Desire. It is necessity that management responsible to encourage the desire of their employees to support and be active by participating in the prospective change in organization.

3. Knowledge. It is management’s responsibility to provide the training and education to its employee change methods of the new procedures, and software. Sometime it is useless to do work in change environment without sufficient knowledge about the goals desired by organization.

4. Ability. After getting a desired knowledge employee is involved needs to be given the training to achieve and set to new change to be made which affects successful for organization.

5. Reinforcement:- According to study it has proven that any person who perform and repeat the task continuously for 21 days, it will become a habit of that person whether it is good or bad for him. Reinforcing new “habits “of the employees improve the success of the change made.

http://www.kellyservices.com/eprise/main/web/us/hr_manager/articles_aug08_akdarmodel

Business Process reengineering

Business process reengineering is a radical thinking of organizational process; this is a very fundamental consideration. This a fundamental and prime steps undertaken to enterprise resource planning implememtation.basically BPR analyses and suggests the structural changes to be made for organization. This identify very important because it helps organization should be customized and design itself to become ERP friendly. If organization is unable to stands with the external changes then the best way to manage is adopt the changes according to environment and apply the changes in it.

Study has been proven that if any changes are imposed in organization then sudden changes are not all time works in proper way because the improper method applied to it. It need plan to apply it; this can be avoided by the use of BPR in practically.

Davenport (1992) prescribes five approaches to BPR model which are follows:

1) Develop business vision and process objectives

2) Identify business process to be resigned

3) Understand and measure the existing processes

4) Identify Information Technology levers.

5) Design and build a prototype of the new processes

(valuebased management, 2008)

Pizza Hut has recently undergone a huge change to enhance the business and to give better service for customer; this is due to demand from the customers and improvement suggestion. According to responses Pizza Hut made some changes in their services some of them listed below.

Franchise system: System adopted for store forcast, monitor performance, worker uses and food ordering and inventory management of business. One specific reason behind adopting this to apply technology and service better through management information system. Now these systems are supported by a skilled internal team to make sure customers get the best use from them.

(A pizzahut fanchise, 2008)

http://www.pizzahutfranchise.co.uk/html/technology.html.

Leadership Style: In running business with standard models and ideology of leadership there was something missing about the importance of human beliefs they need some changes and they made it in practical life importance of the human heart in driving a company’s human drive and path of success to inspirational motivation in change management situations.

Real time performance reporting – Development in technology which can monitor the progress of business anytime, anywhere via remote log-in functionality.

Online recruitment system for the applicants and team members only who meet the minimum success criteria added to shortlist.

Online training for managers and team members.

Digital marketing including online and mobile handsets.

http://www.pizzahutfranchise.co.uk/html/technology.html

First of all let us understand the meaning of strategic intervention:-It is a technique of influencing element that is used to modify the existing elements of business process there are three standard strategic intervention methods namely.

HR intervention

Strategic leadership

Team building

HR intervention:

There are different issues and procedures needed to run business organization and being success to achieve their goals. Human Resources comply with these procedures very well.they prepares organization guide for the managers, performance management, succession planning systems, and several other works for the betterment of organization. So HR intervention is always necessary, it stays the organization up to date with legal compliance.

Strategic leadership:

Strategic leadership involves managing through others, managing entire enterprise, making changes according to requirement. Managing human capital is very critical skills of strategic leader. Commercial innovation, and manage the knowledge is also major functional activity of the leader. It’s very important to obtained a good strategic leadership for success of an organization.

http://asso.nordnet.fr/adreg/Hitt%20et%20al%20strategic%20leadership.pdf

Team Building:

A team building can be defined as a group of people who collectively work towards a pre-defined goal utilizing experience and knowledge

in an office helps to nourishes better and open communication between the employees themselves, it also makes fosters to develop the relation between employees and the higher management. It goes a long way in improving professional relation. Team building in the workplace significantly contributes towards employee motivation and building trust among the employees, thereby ensuring better productivity.

http://www.buzzle.com/articles/team-building-in-the-workplace.html

Human Resources intervention techniques I would recommend in introducing ` change:

Since last five year we have seen drastic changes in other departments of Pizza Hut. Whatever the changes made it is working very well. Changes they adopt technology, leadership style and franchise system going well. This is internal part of the business which is basic and playing important role in upgrading the function of business. On the other side of business and decision making there would another change to be happening in Pizza Hut. Human Resources is major body of an organization i.e. Pizza Hut. HR is also responsible for other operations of business issues like training programmers’, individual growth of

employee. Career make progression path drive the culture of Pizza Hut. Finance and accounting is vital for Pizza Hut. But i personally think that they are giving much importance to their function because lack of decision making process, delaying in improper assessment of payment of employees, so there would be need for the change in the same. More than 13,000 thousand employees are working on weekly payroll system and 2000 are working on monthly basis, in present company is using bureau system. it need change to innovative technology for accessing the payment system. The functionality and flexibility of the new system would make simple and help for further improve the HR and payroll services which provide for all restaurant teams. After all Salaries is simply a payment for the supply of services to the company. Wouldn’t HR be better off focusing on Employee Development and other training programmes, rather than dealing with errors in the payroll.

Task 2:

Outcome:- Understand Issues relating to strategic change in the organization

a) Following some generic background relating to strategic change has been introduced in Pizza Hut which shown good improvement in company’s progress. Here I also elaborate some functional areas which have changed it drastically.

1) Customer expectation:

Fast food industry is growing day by day, and new varieties of food are coming in market. so the customers expectation are growing more and something different from other food companies. Food market is going global means international food tastes are available in many restaurants. So the variety of taste demands more from consumers. There is need to fulfill the customers expectation about the change.

2) Competitive edge:

In global market there is always a competition among the food companies. Pizza hut also facing a tough competition. Domino’s pizza is a major competitive player of pizza hut holds approximately 20% of market as compared to pizza hut is 46%.remaining market share is hold by small companies nearly about 32%. So planning and strategy is important to be competitive in market by making some different kind of variety pizzas, pastas etc.

3) New technologies:

Sometimes only advertising is not the only way to sell the product, technology will definitely play important role. For pizza hut upgrading technology, advertisement through social networking websites, Online advertising, mobile marketing, sponsorships, tie up with local but popular brands, etc are technological ways to get marketed. Online advertising, mobile marketing, sponsorships, tie up with local but popular brands etc. need for change for better result.

4) Economic changes in market

Every year there is a fixed budget to run the business including the extra money is given to them for flexible financial operation. But external environment are not remains constant, like economic policy of government, prices of commodities, increase in tax etc.it impacts the financial policy of business, pizza hut is direct customer oriented business so if the external forces or environment changes it directly effect on business so they need to change at that time.

Drivers that motivated Pizza Hut to above consider Change as follows:

Technological Advances

Loss of markets

Economics

Technological Advances:

To attract customers and to give him better and fast service it is necessary to adopt of technological changes, so it could help them to be competitive in global market. if we consider pizza hut there is good scope to introduce Online ordering system, discount E-coupons, Happy hours schemes etc.result of this new technology adoption pizza hut could get good response from customers, these technological advances will give satisfaction of good service to customers, instant service.

Loss of markets

In competitive market the business progress is reflect by their market share data. Loss and gain of market share is depends upon quality and service given to customers, so it is a very critical to obtain a market share and keep it progressive. Pizza hut is a competitive with domino’s pizza, compare between them is at present pizza hut is holding approximately 46% and dominos 20%.this means dominos losses their market compare to pizza hut. So in business, market share is plays important role for prospective growth of business.

Economics

Every business organization having its own economic policy to run business in market. business economics is diversified towards market means external forces always impact internal structure of the economic policy of individual organization. Financial status, liquidity of funds etc are related to finance matters of company, demand and supply are integral part

which depends upon the requirement from the external market, external forces such as economic downturns,policy,inflation and deflation in market, interest rate, are directly affect economy of business. If Pizza hut is doing their business so above economical factors effect on pricing of product increases in pizza prices due to cheese price increased.

So above three are main drivers of change in business organization.

2.b) The main resources that pizza Hut needed for the implication are as follows:

1) The HR department: – It has a desirable reputation and is a fully integrated part of the organization, playing a key role in most business decisions. HR supports the restaurants and the Restaurant supply chain where it is really needed. Pizza Hut made good improvement in human resource so ensure that 70% of all vacant positions are filled internally. Pizza hut also arrange annual achievement award programmes to employees who achieved special in current year. Fast-moving, sociable atmosphere keep by company to work friendly in workplace.

If HR failed to respond to need for strategic change then it could be going difficult to handle the training programmes, supply change management system, decision making.so to give a better prospective to company then HR should not be failed work.

2) Information technology: – Pizza hut shown its changes in IT department since 5 years. IT department doesn’t just cover the RSC but it’s responsible for all the systems across more than 680 Restaurants. Company upgrade IT services which are looking at the process of bank reconciliations, maintaining infrastructure.

IT reduces the work pressure and give more accurate service, so in pizza hut for customer satisfaction it plays very critical role because ordering the menus, online order coupon etc.are targeted online customers. If IT failed then it will directly impact on turnover of business. so IT must work regularly and perfectly.

As a department we’re very dynamic and forward-thinking, driving change from the inside of the organization out. What’s more you’ll benefit from the long-term job security of working for a big global brand and enjoy a favorable work/life balance, without compromising on the sort of technical challenges that keep the job interesting.

Task 3

Outcome: Develop systems for understanding and involving others in the process of change

a) Key stakeholders

Tricon global restaurants:

TGR is a famous largest restaurants company with brand name Yum! based in Louisville, KY having restaurants with more than 36,000 restaurants in over 110 countries and territories and more than 1 million associates. Yum! Is got his position numbered #216 on the Fortune 500 List, with nearly $10 billion in revenue in 2009. Four of TGR restaurant brands – KFC, Pizza Hut, Taco Bell these are the global player of the chicken, pizza, Mexican-style food and quick-service seafood categories.

http://www.yum.com/company/ourbrands.asp

Suppliers:

Suppliers to pizza hut for the products like toppings, cheese,chicken will help to make the product more successful and give assurance that the product will not make a loss to company. Suppliers are always belief on pizza hut for making a good relationship between them. They is interdependent to each other. They have bound to give good business to each other in any circumstances. So supplier is also major stakeholder of pizza hut.

Customer and public:

Customers and the public the final major stakeholder of pizza hut because will be the ones that will buy and consume the product, every company design their product keep in mind to customers only. Not all stakeholders want the same thing. So besides industrial stakeholders or any other business organizational stakeholders are indirectly dependent upon consumers and customers.

Proposed system to involve stakeholders in the process of change

By taking a thread of above discussion about the stakeholders in Pizza Hut, like business organization, suppliers, customer and public. We are going to make a proposed system or any model to describe the involvement of above in the change of an organization.

We have discussed Tricon Global Restaurants, suppliers, and customers as a public. So Pizza hut need to be any change in future for making any business strategy, company should consider above participants for decision making process. To expand or to make objective of company pizza hut to discuss all the ideas and matters regarding to funds within the corporate context to its business enterprise stakeholder i.e. TGR because this company invested a major money and gives financial support to pizza hut. So the concern about TGR is must for pizza hut. Secondly suppliers who give his best service by supplying cheese, pizza bases, toppings, paperroni etc. to make product like pizza and other variety products.

Customers and public without it would not be possible to achieve success for any company because they are the final destination where any product gets consumed from the market. So public are crucial part of the business organizational change.

Now we can interrelate the above categories in following manner

Tricon: – Financial support to pizza hut.

Suppliers:-Immediate supply of cheese, cheesebase, supply on demand.

Cutomers and public:-final destination of consumption.

b) By considering the above factors which are involves in system change management also have some advantage and disadvantages described below.

Advantages:

1) If Stakeholders is a business organization then good advantage is fund flow from such a stakeholders is always good on the other side they also have investor of another companies which will beneficial to make their business grow in market and wider range of objectives.

2) If the stakeholder is major stakeholder in company then his company personally incorporates in financial matters of investing company for getting better business in market.

Disadvantages:

1) We know that supplier is a playing a key function in business but he is not only one to whom company liable to tie up for business. Pizza hut can’t concentrate his function on suppliers to give specific business from him. and totally depend on demand from the external environment.

2) Pizza Hut business is running only upon consumers. Where they always have their likes and dislikes. taste and variety of foods, different menus, and special deal on menus are the main attraction of customers.if the pizza hut is able to give good service then it directly affects’ the profit of the business.

3.c)

Change management strategy with the key stakeholders

1) Identify stakeholders: Stakeholders can be identify by making survey and ability of stakeholders to take stake in relative company, think of all the people who are affected by stakeholders work, who have influence and power over it.

2) Prioritize stakeholders: our company has a long list of people and organizations who affected by our companies work. May be some of them having a power to block or advance.and another one is they are interesting in our companies work.

3) Mapping profiles of stakeholders:

Pizza Hut can map the profile of stakeholders in four categories:

High power, interested people: these people our company must fully engage and make the good efforts to satisfy.

High power, less interested people: Limit the work with these people to make them satisfied but not beyond their capacity.

Low power, interested people: keep communicate with these people adequately and talk to them to ensure that no major issues are arising. These people are always be helpful and concerns about project work of investing company.

Low power, less interested people: keep monitor these people but not exceed communication about certain limits.

http://www.mindtools.com/pages/article/newPPM_07.htm

( Mind Tools Ltd, 1996-2011)

d) Strategy for managing resistance to change is discussed as follows.

1) Open communication :- Pizza hut undergone changes in last five years, company needs more changes to be done in nearest future I would be started with open communication with employees ,workers, and other participants of business .first I would like to tell them why we need the changes? Then which change particularly they need and what are benefits for all peoples relating to it. Open communication always plays crucial role because with this we can exchange the information of both the sides and understand the opinions. so it is very good medium to managing resistance to change.

2) Involvement: – I would like to discuss about the role of employees and worker in Change in pizza hut would also change their role and gives more responsibility and will increases the opportunities on achievement, also to give specification on involvement in decision making process that could motivate employees.

3) Feedback:- Getting feedback from the employees,subodianates is always important because it helps to understand their views and opinion about change happened in organization.So it would be a better way to managing resistance in change in organization.

Task 4

a) I here chose McKinsey’s 7S model for implementing change of Pizza Hut:

1) Strategy:-

Pizza hut strictly follows norms to attain the quality product for best operational strategy to attain the customer satisfaction namely C.H.A.M.P.S

a) Cleaningness: Of all restaurants to give quality foods and serve better to customers.

b) Hospitality: Good way of communication, respect and entertain customers.

c) Accuracy: Serving food in time with accuracy and maintaining quality of taste.

d) Maintenance: Handling of staff, relationship with customer, and servicing of equipments.

e) Speed:- delivering food in time

2) Structure:-

Consider an individual outlet as a business organization pizza hut design their management structure like support manager who manages the shift of working team member, deputy designed manager handling training of new recruits, deputy manager works for operational departs like profit and target business, restaurant general manager looks for the functioning of all finanve,orders,quality.etc

3) System:-

The great thing about pizza hut is ,it is a business of franchises system, Delivery system is a major function of business and almost 20% of orders done by delivery mode.frinchises and head office staff work are closely together to achieve their objects.

http://www.whatfranchisemagazine.co.uk/franchise-finder/franchisor/pizza-hut/food-HYPERLINK “http://www.whatfranchisemagazine.co.uk/franchise-finder/franchisor/pizza-hut/food-&-catering/”&HYPERLINK “http://www.whatfranchisemagazine.co.uk/franchise-finder/franchisor/pizza-hut/food-&-catering/”-catering/

2010 What Franchise Magazine

4) Shared values:-

Pizza hut have a special quality of organizational life. Cultures determine much of every transaction happens which is centralize across an organization. While managers are aware of their cultures, they are often unsure about how to influence.emlpoyees and each participants in pizza hut business respects the beliefs and principles of pizza hut.

5) Skills:-

Pizza hut is always respecting the skilled employees, something innovative and different ideas are always welcome in pizza hut, new recruiters also get training to ensure and to put up their skills from knowledge to practicle life.

6) Style:

Every menu of pizza hut has its unique style; they always try to make something different from other competitor’s recipe. Unique approach to customers attract with diff.styles adopt by pizza hut.

7)Staff:

Pizza hut staff members always like to greet and serve the customers and preparing great food behind the scenes, team members are friendly, outgoing and eager to please. They are passionate and enthusiasms tic, they have ability to handle fast paced working environment.

b) How would you implement one or more model(s) in your chosen organization, what improvements do you expect to achieve by implementing your chosen model(s), and how would you measure these? (AC: 4.2, 4.3)

4. b) Change Implementation Plan with Business Process Re-Engineering (BPR):

Business process reengineering is a radical thinking of organizational process; this is a very fundamental consideration. BPR analyses and suggests the structural changes to be made for organization. Implementation of BPR in pizza hut explained below:

Davenport (1992) prescribes five approaches to BPR model which are follows:

1) Develop business vision and process objectives:

A vision of the Pizza hut after the change takes place; the school which provides high quality education with new technology and supports updated curriculum that helps to increase the ratio of university entrance exam success

Pizza hut holding a great share in US and European market rest of these they want to dominant in china brands with profitable expansion. They have good plan to be the best at providing branded restaurant choice with multibranding.

2) Identify business process to be resigned

Day by day competition being so strong in food servicing industry. There will be a threat of imitation products which will surely be a problem to be dealt with. So in future if other imitated products come in market then pizza hut will have to adjust or to find out variety of product to accommodate change in market.

3) Understand and measure the existing processes

If we consider the promotions and marketing of pizza hut they may have to be bigger and better than the competition of nowadays, if think about product development the product may need to be altered to give it that little bit of competitive edge. Forexample stuffing the crust with cheese or giving a free topping with the purchase would help give Pizza Hut an edge over the competition.

4) Identify Information Technology levers.

See pizza hut using IT since many years and changes has been made according to requirement. in the IT business context the online ordering system will going to be very competive,so that we need to be adopt more technological appliances and advanced technology in prospective years.

5) Design and build a prototype of the new processes

If we basically think about the business process it will need flexibility in operation and product life cycle stages to be a market leader. It will need a great marketing plan which will be suited in new product segment .Promotion and advertising will be using for marketing so it will make target a very profitable.

Reference

Internet References.

1) (A pizza Hut company, 2010)

http://www.pizzahut.co.in/dinein/aboutpizzahut.php

2) (A pizzahut fanchise, 2008)

http://www.pizzahutfranchise.co.uk/html/technology.html.

3) (A Associated Content , 2011)

http://www.associatedcontent.com/article/237685/[email protected]_pg4.html?cat=3

4) (A kelly services incorporation, 2011)

http://www.kellyservices.com/eprise/main/web/us/hr_manager/articles_aug08_akdarmodel

5) (Strartgic leadership)

http://asso.nordnet.fr/adreg/Hitt%20et%20al%20strategic%20leadership.pdf

6) (A Buzzle.com, 2010,2011)

http://www.buzzle.com/articles/team-building-in-the-workplace.html

7) (A Yum corporation , 2009)

http://www.yum.com/company/ourbrands.asp

8) ( Mind Tools Ltd, 1996-2011)

http://www.mindtools.com/pages/article/newPPM_07.htm

9) (magazine, 2010)

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