External and Internal Factors: Pizza Business

Introduction

The emergence of COVID-19 led to government restrictions that affected the profitability of the pizza business. Regulations such as social distance requirements and the imposition of lockdown led to the closure of many businesses. However, the situation has improved, and the economy is recovering due to the lifting of the previously set restrictions. Although it is assumed that the pizza business will boom, various external factors are likely to affect the profitability of the business. Although the strict COVID-19 pandemic regulations have been lifted, political, economic, and social factors can affect the internal operations of businesses, leading to decreased profits.

External Factors Affecting Internal Factors

The business environment is multifaceted due to the interconnection between internal and external factors. Pizza business culture involves behavioral norms and procedures that are observed by its stakeholders, such as waiters and cashiers, among others (Hong et al., 2020). Teamwork involves the pizza business stakeholders collaborating for organizational success (Sohmen, 2013). The management includes restaurant heads and supervisors who ensure pizza employees are working towards the business objectives. Meanwhile, employee morale refers to the tendency of employees, such as delivery persons and cashiers, to remain proactive and committed to the business (Hong et al., 2020). Internal factors are crucial in determining business success but are influenced by external forces.

Economic, political, and social factors are external forces that are beyond the pizza company’s control. Economic factors are responsible for the discretionary income and purchasing power of clients (Huang et al., 2022). For instance, the increasing fuel prices have a direct impact on pizza business clients. The high price of oil makes life expensive, causing the pizza eaters to focus on their basic needs. Therefore, many customers will prefer cheaper alternatives to pizza, including homemade foods. Political factors include government directions and regulations for a specific industry, such as food to pursue various actions (Sopow, 2022). The increasing debate on the minimum wage could lead businesses to reduce the number of employees in a pizza restaurant. Consequently, there could be a reduction in the quality of services provided to the customers.

Societal developments and increasing campaigns against unhealthy fast foods are likely to affect the pizza business. According to Oesterreich et al. (2022), “Social factors include cultural norms, health consciousness, and population growth rates” (p. 132). The pizza business is associated with lifestyle conditions such as obesity and hypertension, among others (Neelam, 2022). Therefore, some clients are likely to become more conscious of their food choices. The business will reduce its consumer base and consequent profitability. The political, social, and economic factors will be detrimental to the internal pizza business factors.

Factors’ Impact on Pizza Business

The connection between internal and external factors will reduce the pizza sales volume. The formulation of legislation on minimum wages leads to a reduction in the number of employees. For instance, Pizza Hut is one of the businesses that reduced the number of employees due to minimum wage pressure (BBC News, 2020). Meanwhile, the increased cost of living can psychologically affect employees, who may become less productive. For instance, one of my neighbors who works in pizza outlets is a binge drinker because he cannot sufficiently provide for his family with the little salary he earns. Meanwhile, my friends are some of the people who are health conscious and have chosen not to take pizza. It is crucial for the pizza business to consider the factors that affect it for effective organizational change (Kislik, 2018). The interconnection of internal and external factors will likely hurt the pizza business.

Conclusion

The COVID-19 pandemic negatively affected the pizza business due to strict public health regulations. Although the pandemic has come to an end, the pizza business is still susceptible to the external business environment that affects internal factors. Political, social, and economic factors can be detrimental to employee performance and the number of customers. While the reduced number of employees leads to poor customer service, increased health consciousness negatively affects consumer behaviors. Therefore, the company should be aware of the external factors that lead to less profitability in the pizza business.

References

BBC News. (2020). Tesco, Pizza Hut and Superdrug in minimum wage fail. Web.

Hong, J., Guo, P., Chen, M., & Li, Y. (2020). The adoption of sustainable supply chain management and the role of organizational culture: A Chinese perspective. International Journal of Logistics Research and Applications, 1–25. Web.

Huang, Y., Surface, D. L., & Zhang, C. (2022). Corporate social responsibility and sustainability practices in B2B markets: A review and research agenda. Industrial Marketing Management, 106, pp. 219–239. Web.

Kislik, L. (2018). Change management: How to tell your team that organizational change is coming. Harvard Business Review.

Neelam, N. T. (2022). Perception of rural community about fast food patterns (A qualitative study of district, Muzaffargarh). Meritorious Journal of Social Sciences and Management 5(2), 60–69. Web.

Oesterreich, T. D., Anton, E., Teuteberg, F., & Dwivedi, Y. K. (2022). The role of the social and technical factors in creating business value from big data analytics: A meta-analysis. Journal of Business Research, 153, 128–149. Web.

Sohmen, V.S. (2013). Leadership and Teamwork: Two sides of the same coin. Journal of IT and Economic Development, 4(2), 1-18.

Sopow, E. (2022). Living a change: A guide to understanding and leading change. In 2022 Living Change Workbook. University Canada West.