STRATEGIC CONTROL

Strategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments. It entails specifying the organisation s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.

MISSION OF PIZZA HUT

The CEO said, We take pride in making a perfect pizza and providing courteous and helpful service on time all the time. Every customer says, "I'll be back!" We are the employer of choice offering team members opportunities for growth, advancement, and rewarding careers in a fun, safe working environment. We are accountable for profitability in everything we do, providing our shareholders with value growth ."

VISION OF TOP MANAGEMENT OF PIZZA HUT

y y y y y y y Not just Good .not just great . But THE BEST. To be the best hospitality business anywhere in the world . The best branded restaurant The best delivery business The best franchise network The best food, service assets and value The best for families.

CORE VALUES OF THE MANAGEMENT OF PIZZA HUT

y y y y y Have a PASSION for excellence in everything we do. EXECUTE with positive energy and urgency. Be individually and collectively ACCOUNTABLE for growth in people, customer satisfaction and profitability. Find reasons to RECOGNIZE the achievement of others and have fun doing it. LISTEN and more importantly, respond to the voice of the customer.

Think SAFETY first.

STRATEGIC PLAN
Strategic plans are vital component of strategic management and they ensure that they are successfully accomplished by the lower levels in the hierarchy. Pizza Hut as a company has always tried to target and satisfy various diverse customer categories in different countries depending upon various factors and situations. Pizza Hut in order to fulfill its marketing objective of maximizing customer satisfaction by providing high quality products, has believed in the following marketing strategy:

Think Global, Act Local From the very start, Pizza Hut aimed to get pizza s to the masses. VALUE MARKETING STRATEGY:
Pizza Hut as far as value marketing is concerned follows y y y Quality strategy Customer- service strategy Time-based strategy

Pizza Hut s pricing strategy revolves around providing maximum value to the customer at an affordable price.

MANAGEMENT CONTROL
Pizza Hut has a system of Franchisee that allows managers to influence other members of the organization to implement the organization s strategies. Besides this form of management control strategies get implemented through organizational structure, human resources management and culture. In addition to financial considerations such as a francisee fee, royalty and advertising fees that frachinees pay, franchise contract of Pizza Hut has a long list of strategies that a frachise must comply with.

Basic controls via contacts are:

y A long list of strategies that a frachise must comply with: In order to asure franchisees are capable of adhering to company standards, chains require entering francisees and their mangers to complete a training course. Conditions for expansions and renewal: A franchisee which remains in compliance may be able to open additional stores. Thus the chain an use its power over renewals and expansions to reward or punish franchisees for following or disobeying company policies. Franchisee organization/comittees: They participate in these to share business expertise, culture, and corporate initiatives, and thus make franchisees feel a personal commitment to the system. They also provide helpful advice and feedback. Inspection of stores: By the chain happens 1-3 times every year Low powered: Company presence and the company s authority in the system is very high. Franchisees also express distrust of career-oriented company personnel who are new to the system. Pizza Hut franchisees are getting used to their new place in a company-dominated system. Limited power to adopt and limited veto power: At Pizza Hut it is maintained through informal social norms and not formal. If a franchisee copies a practice which is common in company stores and the chain objects, any court will find in favor of the franchisee. Limited power to adopt can play a role only when the chain might otherwise withhold an efficient project from franchisees, either to prevent them from adopting it at all, or to extract a side-payment. Limited veto power is established formally in the franchise contract.

y y

y y

Low innovation: In franchisee and chain is responsible for this. Chains within chains: Pizza Hut deals with a few large francises, each of which is a minichain. The advantage of multui-unit franchise is that the top-down decision making is easier. Only one francisee needs to be persuaded, and change will go though hundreds of stores.

GENERAL:
(a) 1-3 times a year, more often if requested by a franchisee. (b) Advertising committee with four members. Tie-breaking vote belongs to chain (c) Company responsible for 70%-90%. Company dominates product development. Franchisee ideas are smaller. Franchisees important for constructive criticism. (d) Rise in corporate resources led to chain s new dominance. Current balance is good. Creativity has been lost.

INNOVATION BY FRANCHISEES:
(a) International Pizza Hut Franchise Holders Association (IPHFHA): Dominated chain for decades; now just advises. (b) Operational suggestions important. (c) Innovative effort i. Innovate within existing procedures and processes. Mostly natural outcome of running a good business.

ii. Franchise Operator Committee facilitates. Not much encouragement, but not much needed. Recognition sometimes given. iii. Improve business performance. Improve the system (F2). (d) Rejections i. 50%-90% eventually rejected. ii. Not profitable ideas. Persuasion the norm, not conflict. Company glad to let chain incur costs of testing ideas. (e) Power to adopt i. limited, informal. tradition. ii. Violation would get franchisees upset. Franchisees patient; let corporate debug the system in its own stores. (f) High autonomy for seasoned operators.

COMMUNICATION:
(a) Chain most important, but IPHFHA also important. Franchise networks most important. (b) Distrust of corporate staff pushing pet programs. (c) Minor things spread anarchically, but when it s significant, the chain eventually gets involved and may even adopt it.

INNOVATION BY THE COMPANY:

(a) Changes in standards apply to whole chain. Limit to financial expenses of franchisees. Chain has controlling vote for advertising. (b) objections: i. SET process for individuals, IPHFHA for groups. ii. 5%-15%. But they do it [comply] anyway . iii. Marketing decisions: excessively low prices and excessively high costs. Fear of corporate blunders more than conflict of interest . Urban versus rural market have differences. Have to refuse politically and occasionally they change their minds. (c) veto power i. limited, formal.

ii. Important to maintaining a good relationship

PERSUASION:
(a) Data. Adoption in company stores. No side payments. (b) Adoption in company stores helps. But fear of blunders undermines this.

Operational Control
The operations standards are the key path defining elements in any business. Without set procedures optimal results cannot be obtained. The operations standards at pizza hut have multifaceted challenges and opportunities. The standards and procedures for doing business are well defined but some of the possible factors can cause to the deviations and variances. Those possible factors can be eradicated through extra efforts into the process. However the small chances of variance will remain the same because the real business scenarios may vary sometimes than the forecasted one.

OPERATIONS MANAGEMENT:
Traditionally it is believed that the operations management is as a transformation process that takes set of inputs and transforms them into the output. The output can be the goods or services. This includes the effective planning, scheduling and control of the activities that produce the required outcomes. Operations management plays a key role in determining the success or failure of an organization. To carry forwards the inputs of each unit all together and getting turned it into the outputs is the real synergy, which helps organization to set the directions towards climbing the heights of success.

OPERATIONS STANDARDS AT PIZZA HUT: Functional Units:

The activities of business organizations are mostly divided according to the functionality, the management of the personnel and the responsibilities. The operations at Pizza hut cannot be highlighted for any of the single functional unit. Rather it is the collection of several set of the activities that take place within the unit and make things possible by turning customer expectations into the reality.

Main Work Stations:

 Preparation: The preparations is the process of getting things ready, that will help to carry the out the operations in store. This involves activities like defrosting of dough, starters and cheese. So that

can be used for the next day operations. If preparations for the following day operations is not up to the mark then that will cause difficulty or shortages of items that are necessary for the conversion process. The preparation is done on the basis of the next business day forecast. If thefore casted goods will not be made ready for the next day operations that will be virtually difficult for the next day shift manager to carry out the business operations.

 Make Table: The job of the make table is to make orders that are received from customers and appears on the micros system. Order work on FIFO system, unless there is any collection customer. It is because the collection time is 10 to 15 minutes as compare to the delivery which is 30 to 35 minutes. The preparation of make table is a critical part of the operations at pizza hut. The right level of products, ingredients condiments and sauces are prepared to the specifications. That is to be considered vitally that the make table items character, aroma, freshness, and taste are appropriate and kept at right make table temperature between 2 and 5 degree centigrade. According to the set bench marks for the topping rules it should be implemented in the same manors as mentioned in the pizza hut manual guide. There are set rules for the pizza saucing and cheesing, if not followed then it canresult in soggy or salty pizza. This will cause dissatisfaction of the customer.

 Cut Table: The job of cut table is to receive the pizza and cut them according to the order guest check, and pouch them accordingly. The special consideration is to be paid when pouching that the right order should go with right guest check. If it goes with wrong order then it breaks down the flow of the cut table and can cause the mess up of the customer.

 Dispatching: The dispatching is tricky and critical work specially when there are more orders on the shelves and less drivers. The geographical are divided in to the zones according to the post codes. The Guest checks print with address and the postcode. So the shift manager s sharpness is to dispatch the deliveries that can betake two at a time. This effort saves time and effort.

Usually it take less than 30 minute to deliver the order to the customer on his/her door, but the timing standards may vary according to the availability of work force and the level of peak that business receive in particular moment of time.

PROCESS MAP

Operational Controls:
The aim of the business unit is to achieve the complete operational standards practices. Optimal strength is always utilized into the process to get the maximum results and maintain 100% product quality standards. The manager ascertains that, All dough should be identified with an accurate timing system, as it is very critical to good dough management, good quality and wastage management and the wastage control is very important to save overall cost of doing business. He believes that the wastage at the end of the day gives a big off set to the profits.

 Defrosting: The quality without waste is the driving force behind dough shelf lives and timing system in pizza hut. If not followed, leads to the variance of operations that ultimately take to the bad quality and dissatisfied customers as a result and can likely to decrease the customer base.

 Topping Standard: Overlapping of the toppings, give a bad taste of the pizza and damages the expectations of the customer.

 Dating Standards:

The dating standards are set for every ingredient used in the business. The items are labeled with correct MRD (Made, ready, discard) label. These labels must have either date made, date ready, date discard and time details or color dating system.

 Product Shelf Life: In order to maintain the product quality up to the standard, that is very important to follow the set rules for the product shelf life. Different ingredients used in the pizza making process, carry different shelf life.

The taste and the quality highly determine on the freshness of the ingredients, and the resultant the happiness of the customers. According to the Deputy Manager of Pizza hut , If there is variance observed in the product quality that will overall affect productivity and finally the customer satisfaction level. This is not acceptable at all and if company is spending a huge amount of money on the product promotions and marketing activities that are for the business. And also company provides the training to the employee to how to maintain the product quality. So every single person should have to ensure the quality of the product and happy customer makes more return in the future .

QUALITY ASSURANCE:

The quality throughout the supply chain rests with the overall team. This is done by setting rigorous standards during product development. In order to ensure the standards, there is regular auditing and monitoring system in place. The one of the regular system to check quality is CHAMPS Excellence Review. Cleanliness Hospitality Accuracy Maintenance Product Speed

These has

six

items

define the

the

very which

core

of drives

customer

expectations. Excellence

CHAMPS into

become

vehicle

Operations

business

and

is

also

supported

by

reward

and

recognition

scheme

for

the Team members.

Quality assurance is achieved through the complaints monitoring system and their corrections through available remedial methods.

Core Competence
The pizza hut has got high degree of core competence in the basic product. The pizza hut s dough is treated as core competence of the business. This makes pizza hut different then the competitors.

Cost & Variance

The cost of sales and the sales revenue are the actual things that support the managers to run the business on track. If the numbers seems going out of the track they need be highlighted and called as variance. The variance is the difference between the Actual cost and Theoretical Cost.

Reasons of Variances

Miscount:
The chance of miscounting always prevails during the operations. In the case of miscount the chances of wrong order increase and finally will increase the variance.

Wastage:
The several reasons for wastage may occur during the operations. However if forecast made is not effective then the chances of unexpected results may increase. That applies with the product forecast as well. If product is defrosted without realizing the demand for the product then this may cause to one of potential wastage. In other case the wastage can increase if no proper product forecast is being made and or staff make mistakes while making orders or at the time of dispatching orders. In any case if wrong delivered to customer the customer will complaint against it and in order to make customer happy the order is to be resent. This will certainly increase the cost. Higher the number of complaints more is the cost. These two factors are directly proportional.