Pizza Hut Entering Home Pizza Delivery Business in Paris

Posted on July 28, 2010 by master

Case Type: market entry/new market; business competition; market sizing.
Consulting Firm: Capgemini 2nd round job interview.
Industry Coverage: Restaurant & Food Service.

Case Interview Questions #00012: Your client Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo wings, breadsticks, and garlic bread. Pizza Hut is a subsidiary of Louisville, Kentucky based fast food restaurant company Yum! Brands pizza hut pizza delivery Inc. (NYSE: YUM).

Pizza Hut has recently entered the home pizza delivery business in Paris. The market for pizza home delivery is currently dominated by Domino’s Pizza (NYSE: DPZ). Pizza Hut has asked your consulting firm to help it analyze issues that will determine its likelihood of success in the Parisian pizza market. First, what information would you need and second, how would you analyze the pizza delivery market in Paris?

Additional Information: (to be given to you if asked)

An estimate of the size of the Parisian home pizza delivery market. This could be obtained by knowing the population of Paris (10 million in urban area) and making some educated guesses about factors that determine pizza market size.

You may also want to know the size of Domino’s Pizza, the current major competitor, including sales, number of stores, and proportion of Paris that is currently served by Domino’s.

Other useful information: market segments targeted and served by Domino’s; market segments that are neglected by Domino’s; what type of product do they offer; what do they charge for their product; what is the cost structure of their business and what products are most profitable.

Possible Solution:

The best method of analysis would start by determining if any part of the market is not well served currently by Domino’s. Determine what are the needs of any neglected market, and understand if your client could profitably serve this market.

Also, try to understand the likely competitive response of Domino’s to your client’s entry. How will you defend your position if Domino’s decides to fight for market share?

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