Swot Analysis of Little Caesars Pizza

SWOT Analysis of Little Caesars Pizza

Bryce Sapala

Bartram Trail High School

Swot Analysis of Little Caesars Pizza

Table of Contents

Abstract ……………………………………………………………………………………. 1

Introduction ………………………………………………………………………………... 2

Strengths ………………………………………………………………………………….... 3-4

Weaknesses …………………………………………………………………………………5

Opportunities ………………………………………………………………………………. 6

Threats ……………………………………………………………………………………... 7-8

Conclusion …………………………………………………………………………………. 8-9

Works Cited ………………………………………………………………………………... 10

Swot Analysis of Little Caesars Pizza

Abstract

Little Caesars is a pizza joint that has been up and running for sixty years, delivering

quality pizza to customers. Within each and every company or franchise, there are internal

factors, and there are external factors. These factors give people a way to analyze the culture of a

company, identify trends within the company, and make observations about the well-being of a

franchise. Internal factors include the strengths and weaknesses of the company. Identifying

these components help to establish the organizational success within a franchise and what can be

done to improve. The external factors include opportunities and threats, which can help oversee

what can be done to improve the future of the franchise. All four of these factors collectively

combine to form a SWOT analysis.

That is what this report exists to accomplish. It takes an in depth look at the strengths,

weaknesses, opportunities and threats involved with the franchise of Little Caesars. Delivering

pizzas ‘Hot-N-Ready’ from the Press Corps box gives the company an advantage by allowing

pizzas to be ready to eat as soon as customers walk into the store. Its marketing strategies has

helped to exceed expectations and become the largest carry-out pizza joint in the country, and the

third largest out of any pizza store in the U.S. However, the management can improve greatly, as

different managers are inconsistent in which store they are working at, which creates confusion

within employees of how a task should get done. The opportunities involved with Little Caesars

include having online orders, and allow the choice to create new and innovative crusts for pizzas.

Little Caesars continues to face threats from Pizza Hut, Dominos, and Papa John’s, as each of

those franchises compete with each other. Using new techniques, and taking advantage of

opportunities, such as expanding globally, Little Caesars can avoid dangerous threats that may

keep them out of business.

Swot Analysis of Little Caesars Pizza

Introduction to Little Caesars

On May 8th, 1959, a couple by the names of Mike Ilitch and his wife Marian Ilitch,

founded Little Caesars, a large American pizza carry-out joint. Its first location was in Garden

City, Michigan, which was a little suburb of Detroit. Ten years later, Little Caesars became an

international chain. Today, it is one of the top pizza joints in the United States, competing with

brands like Dominos, Pizza Hut, and Papa John’s. Since opening in 1959, it has become the third

largest pizza chain in the world trailing only Pizza Hut and Dominos (Wikipedia.org). Little

Caesars has at least one location in all fifty states of America, along with twenty countries and

territories around the world. Though proven to be successful, I believe Little Caesars can make

improvements that will benefit the franchise and boost customer satisfaction. The purpose of this

business report is to analyze the internal strengths and weaknesses, along with the external

opportunities and threats involved with the Little Caesars franchise in what is called a SWOT

analysis. The target audience can be for older adults, but is more specifically towards children

and youth from middle and upper classes. Little Caesars is still making new creative and unique

ideas to further market themselves and advertise their newest pizzas including the pretzel crust

pizza, bacon wrapped deep dish pizza, and the popular extra most bestest pizzas. Taking an

analytical approach can single out what the franchise can improve on, which can ultimately bring

out ideas of what Little Caesars can do, even if only a small amount, to gain an edge over its

close competitors mentioned earlier.

Swot Analysis of Little Caesars Pizza

Strengths

A company cannot get to be the third largest pizza chain in the world without having

many strengths, and Little Caesars is no exception. Throughout the years, Little Caesars has

developed the catch phrase, “Pizza! Pizza!” which was first introduced in 1979. This phrase was

coined after launching a new offer for two pizzas for the price of one (“Our Story| Little

Caesars”). Having a simple catch phrase like this grabs customers’ attention and sticks in their

mind. When these customers think of pizza, “Pizza! Pizza” will enter their minds and Little

Caesars will be an option to consider when deciding which place to get pizza from.

Perhaps the greatest strength at Little Caesars is the development of the ‘Hot-N-Ready’

technology. ‘Hot-N-Ready’ means that customers can come into the store and order, without

having to call ahead to schedule or wait in line, and certain pizzas will already be made ready to

go. These ‘Hot-N-Ready’ pizzas are all large sizes and offered at an affordable price of $5.00.

This attracts more customers, knowing they can enjoy a meal for much less than the cost of other

competing pizza restaurants. The ‘Hot-N-Ready deal makes Little Caesars unique and

differentiates it from any other pizza chain in the world.

In addition, the franchise has provided the drive-thru option, so customers do not need to

get out of the car to get their pizza. Rather, they can drive to the window, pay, and receive a

‘Hot-N-Ready’ pizza without ever stepping foot into the store. As mentioned in the introduction

on page 1, Little Caesars is very good at marketing and advertising. According to the “Our

Story” page on the Little Caesars website, they began national television advertising in 1988,

where many of the industry commercials received recognition as being some of the world’s best.

Promoting the latest pizzas from the franchise make people think about how a pizza will taste,
Swot Analysis of Little Caesars Pizza

even if they are not hungry, or they already ate. The outstanding efforts of advertising is what

makes Little Caesars one of the largest pizza chains in the world.

The following table analyzes the total market share of the top four pizza chains (Pizza

Hut, Dominos, Little Caesars, and Papa John’s).

Pizza Chain Market Share Percentage

Pizza Hut 14.79%

Dominos 9.86%

Little Caesars 7.85%

Papa John’s 6.45%

Combined, Pizza Hut, Dominos, Little Caesars and Papa John’s make up 43.8% of the total

market share of pizza chains in the country. 7.85 of the 43.8% comes from Little Caesars, which

accounts for 18 percent of the top 4 companies. They are positioned only 2% away from

Dominos, who holds the second spot in the rankings.

Lastly, a strength of Little Caesars comes from the specific locations of the stores. For

example, the franchise chose an option of outsourcing in order to develop stores near sports

arenas, college campuses, military bases, etc. These places are areas where the demand for fast-

food places is greater. These locations greatly expand the popularity of Little Caesars, along with

bringing a consistent group of customers who will often come back and buy more. This was a

smart way of using money for the benefit of the overall future success of the company.
Swot Analysis of Little Caesars Pizza

Weaknesses

While there are several quality strengths included within the Little Caesars franchise,

there are some weaknesses that prevent the company from reaching its full potential. For

example, franchise management can be an issue. Managers cannot always be at the store and do

not work shifts seven days a week, so shift leaders are put in place to help out this situation.

However, at Little Caesars, many employees who become shift leaders are very young and tend

to stress when work gets busy or overwhelming in some cases. This can cause lag time in

delivering the pizzas to customers. If other pizzas are behind one another, and an employee or

shift leader is not watching the oven closely, the products could get burnt, which will cause more

delay.

Another weakness is the wages in which employees are paid and the hiring process.

Recently, Little Caesars has been strict about hiring only those who are age eighteen or above.

This is due to the fact that much of the machinery at the store must be handled by adults and they

are able to work more flexible hours. However, the employees are getting paid at minimum

wage. With other stores or other fast-food restaurants available, the young adults will often seek

employment elsewhere, choosing a path that will provide better pay and better prepare them for

further education.

Another weakness is found in the fact that Little Caesars has no delivery option. Because

of the money being spent to keep the ‘Hot-N-Ready’ deal going, Little Caesars cannot deliver

pizzas to a person’s house if they call for an order. Rather, the customer needs to come to the

store after explaining what time the pizzas should be done, and pick them up at the scheduled

time. This can cause people or families at a social event to forego Little Caesars pizza to choose

a place that will deliver the pizza right where they are.
Swot Analysis of Little Caesars Pizza

Opportunities

Little Caesars is continuing its efforts to expand more globally. Despite starting up as an

American franchise based from Detroit, it has expanded to become an international pizza joint

and has locations in at least 20 countries around the globe. However, it has announced plans to

keep expanding. For example, in 2017, Little Caesars established its first South American

restaurant, which was located in Santiago Chile (“Little Caesars expands to South America”).

That marked the sixth continent Little Caesars has expanded to, excluding only Antarctica. It

also opened its first Philippines restaurant this past January. With locations in all fifty states

already, the extent of Little Caesars’ global expansion is limitless.

In addition, Little Caesars has the option of online ordering. While there is no delivery

straight to a person’s house, customers still have the choice to order online. Often times, this

choice is made available so that people who order many pizzas can receive their pizza without

waiting an extreme amount of time for their order to come out and be ready.

One thing that can make a pizza company unique is its crust. Little Caesars is mainly

generic when it comes to crusts. The franchise did spark creativity when it took in the pretzel

crust pizza. The pretzel crust vanished, though, with the addition of a bacon-wrapped deep-dish

pizza. Continuing to crate new crusts like the pretzel crust is a great opportunity for the company

to branch out to new venues and appeal to more people’s senses. As of today, Little Caesars has

included a stuffed-crust pizza and a thin crust pizza into the menu. A stuffed-crust pizza is one

that has cheese located inside the crust, rather than the cheese being just on the sauce itself.

The opportunities surrounding the Little Caesars franchise encourage expansion of the

company, and seek to further the number of customers that Little Caesars gets on a daily basis.
Swot Analysis of Little Caesars Pizza

Threats

As I mentioned earlier, Little Caesars faces constant threats from outside competitors.

The following image was taken from Forbes.com to display the competitors Little Caesars along

with the impact they have on U.S sales.

Independents make up the majority of the pie graph, which is reasonable considering the

numerous pizza restaurants around the world. Sborro’s in New York City would be an example

of one of these independent pizza joints. While the information above was taken from 2014, it is

still very relevant to exemplify the threats and the competition that Little Caesars faces every

day. The franchise is the third largest pizza joint in the world, yet only makes up a small fraction

of the total $38,524,732,336.00 in sales.

The rise in prices in ingredients can also pose a threat to the franchise. For instance,

cheese is one of the main, if not, the main ingredient in pizza. If the cost of cheese, along with

the prices of other ingredients such as flour, constantly increase, more money will have to be
Swot Analysis of Little Caesars Pizza

spent on ingredients. This will hinder the company’s ability to spend the money on other useful

products, such as better technology. Better technology allows employees to get their job done in

a more efficient manner, but in a way that will produce better quality products to its customers.

Final Evaluation

Overall, Little Caesars is a very successful franchise. It has proven that with the large

amount of U.S sales accrued over time, including its success to other pizza restaurants.

Internally, the strengths outnumber the weaknesses of the company. The ability to deliver pizzas

‘Hot-N-Ready’ greatly reduces the amount of time customers have to wait for their orders to be

ready. Shorter time leads to greater satisfaction. Little Caesars’ outstanding advertisement and

marketing campaign also helps to boost the recognition of the company, which attracts to more

audiences. On the downside, Little Caesars does not have a delivery option. Customers can order

online and pick their order up at the store, but orders cannot be delivered to their specific

location. This can turn away some customers who do not feel like driving to a location to pick

their pizza up. Paying at minimum wage can also be a problem as older teenagers and young

adults are looking for jobs with better pay in order to provide for college or education past high

school. Externally, competition from other pizza restaurants pose constant threats to the Little

Caesars franchise, but that is natural for being a service selling food. Taking advantage of the

opportunity of online orders and experimenting with new pizza crusts will help establish

creativity that will make more sales, ultimately eliminating the threat of going out of business.

Little Caesars is a tremendous franchise and does many things right. However, I recommend

being less strict on the age requirement to work at the store so that younger teens, around age

fifteen or sixteen, can earn money at an early age. That way, they won’t worry about how much

they are getting paid. I also propose starting a delivery option. It may cost money to start up, but
Swot Analysis of Little Caesars Pizza

the revenue generated from this option, I believe, will greatly outweigh the cost to start it. I am

excited for the future of this company and to see the heights that Little Caesars will rise to.
Swot Analysis of Little Caesars Pizza

Works Cited

Our Story. (n.d.). Retrieved from https://littlecaesars.com/en-us/rooted-in-detroit/our-founders-

history/

Little Caesars. (2019, April 09). Retrieved from https://en.wikipedia.org/wiki/Little_Caesars

Little Caesars Expands to South America, to Open 31 Locations in Chile. (2018, December 13).
Retrieved from https://www.dbusiness.com/daily-news/little-caesars-expands-to-south-
america-to-open-31-locations-in-chile/