Which Degree of Competition Best Describes the Situation of Pizza Hut in Hong Kong
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The degree of competition best desribes the situation of Pizza Hut in Hong Kong is Monopolistic Competition. The following point will gonig to support my point of view.
Pizza Hut is a pizza multiple specialty restaurant which imported from U.S.A. As everyone knows Pizza huts attainment in Hong Kong. Althought it is successfully operating, it is not the only one pizza multiple specialty restaurant which running in Hong Kong.
Pizza Hut has numbers of compertitor in Hong Kong, eg.: Pizza Box, Pizza and Chicken, Pizza Express, Pizza cheese Either they are all selling pizza, most of them serving as both Dine-in and Takeaway. Thats means they have identical products.
Althought Pizza Hut have plenty of competitors, it still stands out from most of the restaurant in Hong Kong. It usually be the first choice for the customers who want pizza because Pizza Hut always launch new products which always seasonable or festive, which makes it differentiate with other competitors.
Beside on their products, they have very similar prices too. Customers can easily find out and compare their price, which force the different company can not raise thier price wilfully to keep thier competitiveness.
Another superiority of Pizza Hut is they do not needs a large capital investment to expand their business, which is running as franchising: Anyone who wants to join Pizza hut needs to invest not less then $5,000,000 asset, which is 70% of the total investment. Thats means Pizza Hut is helping for 30% of investment to having a new chian store.
In every specialitys of Pizza Hut, firstly it is NOT the only one pizza multiple specialty restaurant in Hong Kong. Secondly, it try differentiate with other competitors. Third, large number of buyers relative to it applies potential limits to prices. And lastly, it only needs a small capital investment to entry the market. They all shows us the degree of competition best desribes the situation of Pizza Hut in Hong Kong, “Monopolistic Competition” is the most sultable one.