Pizzahut Case Study

MNET568

21 JAN 2019

Pizza Case Study

Guilherme Rodrigues & Maddie Hartz

1. DEFINE CENTRAL PROBLEM (ISSUE)

1. The competitive advantages that became the focus in order to compete with off-campus eateries (and gain/maintain market share) are now being directly threatened by the new establishments opening on-campus.

1. LIST RELEVANT FACTORS

1. (+) BSB, Inc. is a large, nationally operated food-services company.
2. (+) BSB, Inc. is under contract to provide food services for the entire campus of 6,000 students and 3,000 faculty, staff, and support personnel.
3. (+) BSB, Inc. has been [solely] operating the campus food services for the past 10 years.
4. (+) BSB, Inc. has three different locations on campus.
5. (+) The campus itself is a “walking” campus.
6. (+) The campus is somewhat isolated from the rest of town.
7. (-) A large amount of food being consumed by students was not being purchased at the BSB facilities (43%).
8. (-) Students not eating at BSB facilities: prepared food in dorm rooms (20%), had food delivered from off-campus (36%), and consumed food off-campus (44%).
9. (-) 84% of students on campus have a car.
10. (-) 62% of students on have a refrigerator or microwave in their dorm room.
11. (+) The new pizza offering, and delivery service was an immediate success.
12. (+) Sales steadily increased, along with profits, after the decision to offer pizza service.
13. (-) The demand for pizzas put a strain on the grill’s facilities.
14. (-) As the demand for pizzas grew, so did the need for space and equipment.
15. (-) The capacities of existing equipment and space allocated are now insufficient to meet demand.
16. (-) Deliveries are being delayed.
17. (+/-) Groups are now ordering pizza in volume for on-campus functions.
18. (-) Pizza sales are beginning to level off, possibly due to the capacity problems.
19. (+/-) Requests for pizza toppings and combinations not on the menu has steadily increased.
20. (-) In a departure from past university policy, a new food court will permit and accommodate food-service operations from three private organizations.
21. (-) Increased competition is expected from other types of snack foods (Dunkin’ Donuts) and fast foods (Taco Bell).
22. (-) More concerning, Pizza Hut is going to offer limited menu on a walk-up-and-order basis, no phone orders or deliveries will be supported at this time.

1. LIST ALTERNATIVES

1. Stay the course.
2. Close shop and cease operations.
3. College Students enjoy late night snacks, giving them the option of grabbing a personal pizza, during the day, that they can cook up whenever.
4. Retaining its cost advantages on pizzas because their competitors, such as pizza hut, will not lower prices.
5. Add new types of items, such as; dessert pizzas, bread sticks or wings to compete with the other franchises.  
6. Conducting a campus survey and seeing what students want and don’t want on the menu.
7. Pizzas are a hit on college campuses.  Do a survey to see what is profitable on the grill side and get rid of stuff on the menu that is costing you and use that for the pizza side.  
8. Having promotions, for example, the engineering college is having a staff meeting and needs so many boxes of pizza.  Giving them a discount in return for ordering that many.

1. ANALYZE THE ALTERNATIVES

1. If BSB, Inc. stays the course the question is ‘will they stay in business for the future?’  likely, no they will not stay in business once the new food court is up and running.  The best college foods would have to be pizza and tacos and the new food court is bringing in both option with Pizza Hut and Taco Bell.  These two franchises alone will run her out of business if she doesn’t change what she is doing.  
2. Would it be feasible to close shop’s down?  Since she has been the campuses main food service for the past 10 years it can become a challenge to change it up, starting fresh could end up helping Renee.  Her best bet is to keep the Dogwood Room open, allow the buffet style still, where students can grab and go as they please.  Renee could also expand the restaurant and serve popular items that students loved at the grill.  Having this option would give her the opportunity to focuses and do more with the pizza side.  
3. Most college campuses close dinning halls or “fast food chains” between the hours of 7 and 9 pm.  Renee then can allow, on an app like tapingo, for students and facility to create their own personal pizza.  Since students have their own ovens and microwaves right in the dorms it would give that opportunity to be able to cook up and have a pizza anytime after closing hours.  
4. What would happen if Renee retained the prices on pizzas or offered different solutions to students?  Chains do not really do any promotions or will cut down on the cost of there pizza’s so this could end up helping Renee in the long run.  Renee could offer up different things, such as, Student Tuesday, ever Tuesday with a valid ID you get 10% off your entire order.  For an entire month have a combo day, “For $15 dollars you can get a medium size drink, one pizza slice and your choice of side” etc.  Giving this option will increase Renee’s profitability over the competition.
5. As stated above with the “for $15 dollars you can get a drink, pizza and your choice of sides.”  If Renee brought in different options such as dessert pizzas, bread sticks, cinnamon sticks, brownies, wings or pasta it would allow students that opportunity that say Pizza Hut would be guaranteeing as well and probably at half the cost.  You want to make broke college students lives easier and if Renee can offer the same things or more that Pizza Hut is offering but at a lower price it will help her keep sales up in the end.  
6. At all three of Renee’s location she could have students take a short survey to see what student do and don’t like about the menu choices.  With this being done Renee could eliminate a lot of things that is costing her money and not making her money and she could turn that around to put into the success of the new pizza place.  
7. As stating in F.  Every time a student came into the grill and ordered something give them a paper and tell them that you are conducting a survey to better improve the grill.  Get input on what college students like most about her place and then get rid of the things that students do not eat much of.  Getting rid of a couple items on the menu and getting rid of some equipment would give Renee the opportunity to expand her pizza joint right in the grill.
8. As stated in part D.  “Would giving deals on certain things be beneficial to Renee’s business?”  Say if there was a facility meeting and they decided to order 10 large pizzas, not only are you making a lot of money, but you are also putting in more labor with rushing to make those 10 large pizzas.  By giving a promotion on bigger orders, “if you can get this large order into me 48 hours in advance, you will receive 15% off your entire order.”  That way it’s going to make the customer make sure the order is in on time to receive the promotion and it will give you enough time to prepare your workers and the labor hours.  

1. LIST YOUR CONCLUSIONS

1. The alternative of staying in business is at question because now Renee is competing with Dunkin Donuts, Pizza Hut and Taco Bell three huge franchises that people know and love.  When dealing with college students and people in general they tend to migrate more towards the names they know and choose the places that they know will satisfy them.
2. If Renee closed down everything and kept the Dogwood Room open and just migrated everything else into one restaurant it would help her a little by giving student that one stop option.  A con about doing this is that she is now losing two other restaurants that she had around campus and giving students more of that option of “well if I’m already walking over here why don’t I just get pizza from Pizza Hut or a $5 meal box from Taco Bell.”  
3. Allowing students, the option of creating their own pizza, picking it up, storing it in their room and then cooking it when would be beneficial because dining halls do close at inconvenient times and then when you get hungry you must go off campus for food.  The down fall about providing this option is that when you are awake late at night a lot of the times you don’t want to get up to make a pizza and wait.  Most of the time they will change minds and end up getting something else and wasting a pizza and probably never using that option again.
4.  With retaining the prices on pizzas or allowing different promotion will give students that opportunity to spend less.  In the end she could end up loosing money if she always has a promotion, then she is spending more then she is making.  Also, Pizza Hut or Taco Bell or even Ducking Donuts could get the hint and occasionally end up doing a little promotion as well which franchises and promotion will make students go there instead.
5. Expanding on the pizza side and adding in different options, such as bread sticks, dessert pizzas, pretzels, wings, etc.  is a good idea giving students that option, like big name pizza joints, while it’s a good idea, in the end it will cost Renee just extra money.
6. On college campuses it’s always a good idea to hear students and facility’s feed back on different things.  It gives whoever given the survey the opportunity to make that place even better for the customer.  Not ever student will end up taking the survey, you could end up getting rid of a menu item that say a lot of college students do enjoy.  
7. With getting rid of certain things on the menu allows you to maybe get rid of a bulky machine that you may not need anymore.  With doing this it now allows you to expand on the pizza side and really focus on that now.  In the end this idea may work for a couple years but as you get going and the pizza aspect becomes popular, you’re going to run into the error of not having enough equipment.  
8. With every college comes facility members and they must have different meetings throughout the year and what do they usually end up getting to eat?  Pizza.  By allowing this promotion you are not having to panic at the last minute for say needing to make 10 large pizzas by tonight’s facility meeting.  Not everyone is perfect, and people are in a rush so you do have to worry that this promotion isn’t secure so more times than not someone will forget and put in the order for the pizza at last minute.  

1. MAKE RECOMMENDATIONS

1. . . .