Five Forces Competitive Framework
Pizza is a kind of Italian origin and cuisine; it was spread to Australia by Italian immigrants from early 1920s. The pizza restaurants or shops main made and sold the pizzas. Toto's Pizza House (Toto's) is the first pizza shop established in Australia, it opened for business on July 1961, where the business has remained since. (Wikipedia,
2012) Nowadays in Australia, there are more than 3000 businesses of pizza, includes notable pizzerias and pizza chains. Some of those originated in Australia, such as
Pizza Haven, Toto’s Pizza House, etc; some of those are international chains, such as
Dominos’ Pizza, Pizza Hut, etc. The following we will analyze the competition of pizza industry under the Michael Porter’s ’Five Forces Competitive Framework’.
Market definition
Market definition mainly focuses on two aspects, product terms and geographic terms.
We consider the product terms to pizza restaurants. In pizza restaurants, their main products are traditional pizza, gourmet and specialty pizzas, pizza sides and others.
The pizza sides are some specialties with pizza, such as salads, chips, etc. It is a tool for differentiation between the industry players. The ‘others’ are some non-pizza related offerings, such as beverages and desserts. In this industry, the variable cost accounted a majority of total cost, the mainly include the purchase of raw material.
Fixed cost, as depreciation and rental, just occupied a small part of total cost.
In geographic terms, the pizza industry has more competition in an area which is higher populations. The higher populations are more advantageous because of the significantly larger number of consumers to target. It has more attractive to new players entering the industry. So the competition will be more incentive. In Australia, the Victoria and New South Wales are the two leading states in terms of competition of pizza restaurants, Queensland and Western Australia behind them.
Internal Rivalry
Before that, we
2012) Nowadays in Australia, there are more than 3000 businesses of pizza, includes notable pizzerias and pizza chains. Some of those originated in Australia, such as
Pizza Haven, Toto’s Pizza House, etc; some of those are international chains, such as
Dominos’ Pizza, Pizza Hut, etc. The following we will analyze the competition of pizza industry under the Michael Porter’s ’Five Forces Competitive Framework’.
Market definition
Market definition mainly focuses on two aspects, product terms and geographic terms.
We consider the product terms to pizza restaurants. In pizza restaurants, their main products are traditional pizza, gourmet and specialty pizzas, pizza sides and others.
The pizza sides are some specialties with pizza, such as salads, chips, etc. It is a tool for differentiation between the industry players. The ‘others’ are some non-pizza related offerings, such as beverages and desserts. In this industry, the variable cost accounted a majority of total cost, the mainly include the purchase of raw material.
Fixed cost, as depreciation and rental, just occupied a small part of total cost.
In geographic terms, the pizza industry has more competition in an area which is higher populations. The higher populations are more advantageous because of the significantly larger number of consumers to target. It has more attractive to new players entering the industry. So the competition will be more incentive. In Australia, the Victoria and New South Wales are the two leading states in terms of competition of pizza restaurants, Queensland and Western Australia behind them.
Internal Rivalry
Before that, we