Strategic management is defined as the process that a company needs to undergo, in order to achieve its business goals successfully. The strategic management includes the in-depth analysis of the internal as well as the external environment of the business organization that assists the company to develop their strategic plan for further expansion. This assignment highlights the famous pizza chain of New Zealand, Hell Pizza and their expansion venture in the Indian market (Eden & Ackermann, 2013). Hell pizza is a famous pizza chain of New Zealand that began its business in 1996 (“Hell Pizza”, 2017). Within a few years, the company expanded to various countries such as UK, Australia, Canada as well as Korea. The company has targeted to expand their food chain in Indian market as well (Gamble & Thompson, 2014). This assignment highlights the marketing strategies that the company needs to adopt, in order to ensure expansion in the Indian market. The target market, along with the pricing strategies that the company should adopt has been shed light upon in this assignment. The core competencies, as well as the quality and the product varieties that the company would offer is discussed.
The internal and the external environment have a major role to play, in the strategic management of a business organization. The internal environment highlights the factors that the company has control. This includes the strengths, weaknesses, opportunities as well as the threats (Hoffmann, 2014). The external environment of the company highlights the factors on which the company has no control (Wheelen & Hunger, 2017). In order to analyse the internal environment, the SWOT analysis has been carried out and for external environment analysis, PESTEL analysis is done.
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Strengths · Good quality food · The Gourmet pizza is provided by the company is of high quality (“Hell Pizza”, 2017) · It has a good receptive market in the countries in which the company is operational · High demand for pizza among the people of New Zealand, Australia and UK (Gamble & Thompson, 2014) · On-time delivery |
Weakness · It is a new brand, and might not be accepted by the people · Gourmet pizza is expensive, thus the price of the products are high · Lack of potential buyers (Hoffmann, 2014) |
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Opportunities · Expansion in the Indian market · New investors and shareholder market · Increase in the popularity of pizza in the Indian market (“Hell Pizza”, 2017) |
Threats · High competition in the number of pizza brands in India · Religious oppositions might be faced · Financial risk is a major threat in case of overseas expansion |
The strengths that are highlighted in the SWOT analysis includes the quality of the food is high. Moreover, the market in which the Hell Pizza operates such as in New Zealand , Australia and UK, the demand of pizza is high. Moreover, the company Hell Pizza is also reputed for their on-time delivery of fresh pizza (Hoffmann, 2014). The weaknesses that has been highlighted includes the lack of acceptance of the new brand in the Indian market. This is because, the Indian market has various key players in the pizza market, such as Pizza hut, Dominos, Papa Jones. Thus, a new brand, Hell pizza might take considerable time to establish themselves in the Indian market (Eden & Ackermann, 2013). Moreover, the Gourmet pizza are expensive and might be not as promptly accepted the people, as the pizza could become unaffordable. Thus, the lack of the potential buyers is a major drawback for the Hell Pizza (Hill, Jones & Schilling, 2014). The opportunities of expansion in the Indian market are a good opportunity for Hell Pizza to expand their businesses successfully. Moreover, an inclination of the Indians towards the consumption of pizza is also an opportunity for Hell Pizza (Gamble & Thompson, 2014). However, the potential threats include high competition of the other pizza brands in India. Hell Pizza might face the religious opposition of the Indians, thus resulting in a potential threat to the company.
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Political |
· Indian legislation is different from that of the legislation of New Zealand, UK and Australia (“Hell Pizza”, 2017) · The labour issue is a major issue in India · Market regulations · The imposition of the goods and service tax (GST) increases the cost of the pizzas · The type of government regime, that is Communist, dictatorship or democratic has a major influence of the business of Hell pizza (Hoffmann, 2014) |
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Economic |
· The economic stability is important for the establishment of the business of Hell pizza (Slack, 2015) · The growing economy of India facilities the growth of expensive gourmet pizza · The economic stability in the country attracts more inventors |
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Social |
· The changes in the social life of the Indians increases their demand for food like pizza · Moreover, with the growing economy, the affordability of the Indians increase, thus they are able to afford the expensive gourmet pizza (Gamble & Thompson, 2014) |
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Technological |
· The technological development and advancements in India facilitates the development of high quality pizza, along with incorporation of high technology · With the technological development, the dough could be prepared successfully, using machines, thus ensuring that the quality of the pizza are enhanced with lesser efforts (Hoffmann, 2014) |
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Environmental |
· The environmental sustainability has to be maintained by the pizza chain · Reduction in the excessive use water and energy, needs to be reduced and controlled (Hill, Jones & Schilling, 2014) · The packaging of the pizzas should be made with bio-degradable materials |
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Legal |
· The legislation of India, along with the labour law, that differ from New Zealand, has to be abided by Hell pizza · The necessary licence has to be obtained by Hell Pizza |
The PESTEL analysis highlights the various external factors that affect the business of Hell Pizza. The political factors highlight the fact that the legislation of India is much different from that of New Zealand and Australia. Thus, the Indian legislation has to be followed effectively, in order to ensure steady expansion in the Indian markets. Though cheap labour is obtained in Australia, yet the labour problem is a major one, in India (Hoffmann, 2014). Thus, the Hell pizza needs to employ the people such that low cost labour could be obtained, thus mitigating the labour issues. Moreover, the imposition of the newly implemented goods and service tax (GST) might result in the increase in the cost of the pizza (“Hell Pizza”, 2017). The company needs to cope up with these political issues and challenges. The economic factors facilitate the expansion of the company Hell Pizza. The economic growth of India enhances the affordability of the people to buy the expensive gourmet pizza (Gamble & Thompson, 2014). Significant changes have taken place in the social lives of the Indians. The changes in the lifestyle increase the demand of the people for the consumption of pizza. With the technological advancements in India, the process of pizza making is also automated, thus reducing manual labour (Groysberg, Vaughan & Preble, 2015). The environmental factors include use of sustainable packaging materials such that the issues of environmental sustainability do not arise (Hill, Jones & Schilling, 2014). Moreover, controlled use of water as well as energy consumption should be done to promote sustainability. The legislation of India has to be followed successfully. Hell Pizza needs to take the required permissions and license in order to ensure a steady growth and expansion in India.
The market strategy that needs to be adopted by Hell pizza, in order to ensure a stable growth of the company in India. The various components of the marketing strategies are as follows:
The target customers of Hell pizza in India are mainly the people living in the urban areas of the popular cities of India, such as Bangalore, Mumbai, Delhi, Kolkata, Pune. Since the people of the urban areas have a higher affordability and acquaintance with pizza, hence the company targets those people to expand their business in India. Moreover, with expansion of the company, it is likely to target people of various other states of India. Among the target states of India, the youths are targeted as the prime customers.
A variety of the pricing strategies is available and the companies use the pricing strategies, according to the requirement of their business. Since Hell Pizza aims to expand their business in India, hence the penetration pricing schemes could be used successfully, to determine the price of the products of Hell pizza (Groysberg, Vaughan & Preble, 2015). In this pricing scheme, the company aims are earning low profit and attracting more customers to the newly launched products. Once the people are aware of the brand, the prices of the products are increased gradually (Hill, Jones & Schilling, 2014). This pricing strategy is helpful while a company is expanding its business. Moreover, price-skimming strategies could also be used. The companies, when introducing a new product use Price skimming (Hoffmann, 2014). Initially, the price of the products are kept low, however, as the target customers get aware of the new products and the brand, the price is increased to be at par with the other contemporary brands (Rothaermel, 2015).
The distribution systems include the logistics and the supply chain management. Since Hell pizza is a pizza chain, hence the procurement of raw materials is one of the major requirements (Groysberg, Vaughan & Preble, 2015). It is important that the inbound logistics that bring in the raw materials have to be maintained effectively to avoid unwanted delay (Eden & Ackermann, 2013). Moreover, the outbound logistics have to be on time, such that the timely delivery of the pizza could be ensured (Gamble & Thompson, 2014). The distribution system also includes the inventory management, to avoid untimely delay.
The distribution system of the Hell Pizza could use direct distribution or franchising for expansion in the Indian market (Peppard & Ward, 2016). Hell Pizza can open their stores for ensuring direct sales, or use franchising as an option. Both these forms of distribution could be used for the expansion of Hell pizza in India.
The competitor positioning defines the way one brand differentiates itself from the other contemporary brands. In the Indian market, the major players of pizza chain are Dominos and Pizza hut (Hill, Jones & Schilling, 2014). In order to ensure the strong positioning of the competitor, a unique selling proposition of the company needs to be devised, in order to ensure that Hell pizza is able to differentiate themselves from Dominos and Pizza hut, and gain competitive advantages (Eden, & Ackermann, 2013). The uniqueness of the Hell pizza is the way it presents its stores and websites. Moreover, the menus and its names are unique and have a unique way of attracting the customers (Wang et al., 2015).
The Hell pizza is themed as hell and the menus along with the theme are similar to that of hell. This is unique, since the other competitors of Hell pizza, namely Dominos and Pizza hut have conventional names of the various pizzas (Gamble & Thompson, 2014). However, the menu, the theme, as well as the approach of Hell pizza is unique, thus gaining competitive advantages over Dominos and Pizza hut.
The core competencies include the unique features that make Hell Pizza unique and gives in advantages over the other competitors. The components of the core competencies are as follows:
One of the major components of the core competencies is assurance of quality. The quality of the products of Hell Pizza is high, and thus ensures competitive advantage over the other competitors (Groysberg, Vaughan & Preble, 2015). The raw materials that are procured are of high quality and ensure that high qualities of the products are also maintained. Hell pizza has to maintain hygiene, so that the customers could be served with hygienic food (Hill, Jones & Schilling, 2014). Stalled raw materials should not be used in making the pizzas and the other products sold by Hell pizza.
The varieties of the products are large in Hell Pizza. The products include pizzas, anti-pizzas, sides, desserts, ambrosia as well as drinks. The concept of anti-pizzas and ambrosia are new and this is a competitive advantage over the conventional pizza stores of India, namely Dominos and Pizza Hut.
The value chain needs to be given adequate importance, such that the components of the value chain could be successfully implemented in order to gain competitive advantages.
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Serial Number |
Hell Pizza |
Pizza Hut |
Dominos |
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1- Quality |
The quality of Hell pizza is much superior to that of its competitors. The quality management team incorporates risk assessments and quality assurance, thus making it a superior brand |
The quality of Pizza hut is good. However, it is not as good as Hell Pizza. This is because, there is overall quality management, but the individual pizzas that are delivered are not checked for quality |
The quality of Dominos pizza is also good. However, the raw materials used is not as superior as that of Hell Pizza |
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2- Variety |
Hell Pizza offers a wide variety of products. This includes pizza, anti-pizza, sides, desserts, salads, drinks and ambrosia |
The variety in pizza hut includes pizzas, desserts and side dishes. However, the variety is much less in Pizza hut. |
The variety offered by Dominos is more than that of Pizza hut. They offer a larger variety of side dishes than Pizza hut. However, in comparison to Hell pizza, the variety is much less (Hill, Jones & Schilling, 2014). |
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3- Value chain |
Hell pizza has a strong distribution system and value chain. The raw materials are timely supplied by the inbound logistics, along with the timely delivery of the pizzas, on time. |
Pizza hut uses very basic distribution system, and unlike Hell Pizza, high end technology is not used (Groysberg, Vaughan & Preble, 2015) |
Like Pizza hut, Dominos also follows the basic supply chain and value chain management |
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4- Unique feature |
Hell themed website, store and menus |
Unique flavour of pizzas |
30 minutes guaranteed delivery or free |
In order to ensure a stable growth and expansion of Hell Pizza the company has planned to exploit the weaknesses of Pizza Hut and Dominos. One of the main weakness of these two brands include the over priced products, including the pizza. The high price of the products often makes it unaffordable (Hill, Jones & Schilling, 2014). Thus, it is important that the products of Hell Pizza are low priced, to make it easily affordable. Thus, the future plan of Hell Pizza includes lowering of the prices of the pizzas, to give a tougher competition to the competitors, Dominos and Pizza Hut (Peppard & Ward, 2016).
The development plan also includes use of Indian spices to flavour the pizzas. This will ensure that the Indian flavoured pizzas of Dominos and Pizza hut get a tough competition from the Hell Pizza, in the Indian flavoured pizzas. This needs to be ensured, since the company has targeted to expand in India and hence incorporation of the Indian flavours has a major role to play in the successful expansion (Groysberg, Vaughan & Preble, 2015). Another competency that Hell Pizza can use is the high quality of the pizza and the maintenance of hygiene, along with the assurance of the quality of each product they sell (Peppard & Ward, 2016).
The marketing campaign of Hell Pizza has to be done effectively. Since the company aims at expanding its business in India, hence adequate marketing of the brand needs to be done effectively (Hill, Jones & Schilling, 2014). The social media, along with the print media could be used as a promotional media.
Once the core competencies of Hell pizza are identified, the next step is to develop strategies for sustainable competitive advantages of Hell pizza. These strategies need to be incorporated in every level of the management, in order to ensure that Hell pizza gains competitive advantages over Pizza hut and dominos (Groysberg, Vaughan & Preble, 2015). The strategies that could be implemented in the various organizational levels are as follows:
The strategy that needs to be taken by the top-level management includes assisting the employees to understand the organizational goals and the vision with which the country has been expanding their business in Indian market (Hill, Jones & Schilling, 2014). The top-level management should guide the lower level employees about they should enhance their skills in order to ensure successful expansion in India. The required guidance, along with the training needs to be imparted among the employees have to be identified. The work of the top-level employees starts from market analysis of Indian market for pizza and understanding the requirements of the Indian market.
The middle level employees have to carry out the instructions given by the top-level employees. The actual survey of the Indian market and analysis of the survey results are done by this level of employees (Hill, Jones & Schilling, 2014). The middle level strategies include understanding the Indian culture and devising themselves to expand their market in India. The first strategy is to study the Indian market. Next, strategies need to be taken, in order to ensure successful market analysis. Moreover, the gaps between the demand of the customers of the Indian market and the supply of Pizza hut and Dominos or other contemporary brands needs to be identified, in order to exploit those gaps and expand the business of Hell pizza. The supply chain strategy needs to be taken up by the middle level employees. The quality assurance of the raw materials needs to be ensured, such that Hell Pizza could use fresh raw materials to produce fresh pizza.
The employees at this level have to execute the instructions that are given by the above levels. This includes assurance of the suppliers to supply best quality raw, materials, truck drives ensuring on-time delivery of the raw materials. This will enhance the working of the above two levels, thus ensuring success of the expansion of Hell pizza, in the Indian market.
Conclusion
This assignment highlights the complete strategic management plan of Hell pizza, trying to expand their business in the Indian markets. The SWOT and PESTEL analysis has been carried out and highlights the various internal and the external factors that have a key role in influencing the business. Hell pizza is one of the most famous pizza chain and they have found the Indian market most suitable for the expansion of their company. The various strategies that they need to take up, in order ensure the successful expansion and gaining competitive advantages have been highlighted in this assignment. Finally, the various strategies that the various management levels need to take up, in order to ensure success in the expansion has also been discussed.
References
Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.
Gamble, J. E., & Thompson Jr, A. A. (2014). Essentials of strategic management. Irwin Mcgraw-Hill.
Groysberg, B., Vaughan, J. D., & Preble, M. G. (2015). MOD Pizza: A Winning Recipe?.
Hell Pizza. (2017). Retrieved from: Hellpizza.com
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Hoffmann, S. (2014). Regulation of Food Advertising to Children in New Zealand.
Peppard, J., & Ward, J. (2016). The strategic management of information systems: Building a digital strategy. John Wiley & Sons.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Slack, N. (2015). Operations strategy. John Wiley & Sons, Ltd.
Wang, X., Chen, H., Cheng, Z., & Ling, H. (2015). Negative Spillover of External WOM in Supply Chain Partnership. In PACIS (p. 148).
Wheelen, T. L., & Hunger, J. D. (2017). Strategic management and business policy. pearson.
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