Eagle Boys Pizza Report

Founded by a young baker in his mum’s garage in 1987, Eagle Boys now operates more than 335 stores throughout all states of Australia. It is one hundred per cent Australian owned and operated and delivers pizzas to hungry families across Australia – from metropolitan inner city areas to small remote towns. With over 8,000 team members nationally, Eagle Boys makes just under 18 million pizzas a year and generates an annual turnover of more than $200 million. Focused on delivering real taste, real size and real value to pizza lovers across Australia, Eagle Boys is customer-focused and continually examines ways to improve its customer satisfaction and service. Eagle Boys ensures pizza lovers across Australia receive tasty meals and exceptional service every time by training its franchises to commit 110% to customers’ satisfaction.

Explanation of its legal structureEagle Boys pizza is a Proprietary company, meaning that it is private. The shareholders of Eagle Boys Pizza Pty Ltd, have limited liability protection, which means that the most money they can lose is the amount they paid for their shares. Eagle Boys began as a family business, as it was founded by Tom Potter and his mum in 1989. It is an incorporated business, meaning that the business is a separate legal entity from the owners. This allowed the business to be sold and still be operated, in 2007 to Todd Clayton who is now the CEO and managing director of Eagle Boys Pizza. The fact that it is a separate legal entity, allows the company to sue, be sued, buy or sell property and also have perpetual succession.

Identification of the current stage of the business life cycle the business is currently in and give reasons for your views

Eagle Boys pizza is currently at the maturity stage of the business cycle. Its goal is to maintain profits at pre-existing levels. Recently, in February 2011, Eagle Boys responded to the growing sophistication of Australians’ pizza palate by unveiling its new Gourmet Pizza Range featuring ingredients such as, Roasted Potato, Salmon Steaks and Tandoori Chicken. Eagle Boys is also the only Australian pizza maker to offer Ready 2 Go!™, which allows customers to get their hands on some of their favourite pizzas without phoning beforehand or waiting between 5.30pm and 8pm daily. Since Eagle Boys was purchased by private equity firm NBC Capital and the current executive team in 2007, Network store numbers have grown by 63% which is the highest period of growth in the company’s 24-year history.

Eagle Boys saw sales grow 15.4% during the 12 months up to June 2010, bringing total sales growth during the past three years to 43.2%. The company expects the strong double digit growth to continue with the opening of additional stores and the launch of new products.

Identification of one business law and one regulatory body in relation to this business – explain how this business complies

An example of a business law of the Eagle Boys pizza is a privacy law. Eagle Boys is subject to Privacy Legislation, including the National Privacy Principles (“NPPs”) under the Privacy Act 1988, The Privacy and Personal Information Protection Act (1988) and contractual requirements relating to Privacy pursuant to a number of State and Territory Government Licence Agreements. Eagle Boys Pizza complies with this law by collecting information by either specifying or letting the reason be apparent at the time the information is collected. It is not Eagle Boys’ general practice to collect sensitive information and they will only collect sensitive information with the persons consent.

A regulatory body that Eagle Boys Pizza complies with is the Australian Competition and Consumer Commission. Eagle Boys applied for notification of conduct whereby it would grant franchises on condition that franchisees acquire goods and services from specified suppliers. That notification was lodged on 13 August 2009 and allowed to stand on 21 September 2009. Eagle Boys complies by ensuring product safety and liability and does not provide any false or misleading advertising.

Identification of two significant challenges for management in the business life cycle – one challenge management has faced prior to 2011 and one they will face in the future (ensure you state which stage of the life cycle the business experienced /will experience this challenge)

A significant challenge that Eagle Boys pizza management has faced prior to 2011 is responding to the growing amount of different pizza businesses, in competition with Eagle Boys, and the need to introduce new ranges and varieties of products to satisfy the needs of consumers. They had been challenged to introduce new products such as gourmet pizzas, desserts, and sides such as pastas, chicken wings, garlic bread etc. This challenge was experienced during the growth stage of the business cycle.

A significant challenge that Eagle Boys pizza management will face in the future is decline, in the Recession stage of the business life cycle. As the business would have been running for a while now, it will have become a high-risk business. Products may become obsolete, leaving the business with unsold stock. Another factor influencing decline is well qualified employees beginning to leave and seek better job opportunities. Due to the ongoing introduction of new businesses in the same field, Eagle Boys will be affected by consumers no longer buying the businesses products, resulting in a large dent in the cash flow. Consequently, profits will also decline.

Identification of the business environmental influences, both internal and external, that have impacted upon this business

Internal environmental influences that have impacted Eagle Boys Pizza include product influences such as the range of menus that it provides as well as services provided. E.g. Delivery services. Location influences also have a large effect on the business. The location of franchises is vital as a prime location means the business will attract higher numbers of customers as it is convenient and visible. The proximity to customers, suppliers and support services is also essential in determining the location of the business. Another internal influence is resources.

Employees, being the main asset to the business are an extremely important resource. Other important resources include cooking and servicing equipment and machinery as well as raw materials that allow the business to create and sell their products. Management influences control the workers and help to provide a more organised structure and easy way of communication and co-operation.

External environmental influences that have impacted Eagle Boys Pizza include Legal influences such as increasing legal obligations and business requirements. Political and institutional influences include taxation, employee superannuation, approval of new development and alteration applications. These influences have a strong impact on how and where the business is run. Another external influence is financial influences. Financial influences create changes in the financial market which can cause risk for the business. Geographical influences heavily impact the opportunities for the business. Demographic factors such as population, age, and income control the popularity of the business.

Explanation and critical analyses of how management has responded to the above range of challenges and influences

The first Eagle Boys Pizza opened in Albury, New South Wales. Eagle Boys advertised their products as semi-gourmet pizzas that quite unique to the larger chains, yet cheaper due to the high production output. This successful idea caught on, and the first store in Albury was quickly creating a generous profit. Within less than a year, Eagle Boys opened up two more stores in the neighbouring cities of Wagga Wagga and Dubbo.

As the company sustained its growth, it put a lot of energy into researching ways to meet consumer demands in different regions. With stores opening up in rural, suburban and urban areas throughout Australia, the company became very popular due to operating in areas that other large fast food businesses would often ignore. One particularly successful store model was the development of a drive-thru pizza store in 1999, a concept which was unheard of at the time.

Australia’s first drive-thru pizza store demonstrated to be immensely popular, as it was easy and convenient. Expanding on this quick pizza delivery system, the company launched the Eagle Boys Pizza Express Store shortly after, which was designed to provide quick service pizza out of a small location in highly populated foot traffic areas.

This express system proved to be very popular, and new locations started to spring up at airports, shopping malls and pedestrian malls around the country. Many locations were now generating up to forty precent of their sales. As the company started to experience increased competition, it had to do something to differentiate its express pizza service from other companies offering similar products.

Eagle Boys eventually developed a popular offshoot menu for Eagle Express stores: “Ready, Fresh Go!” in 2008. This idea meant that while it is an express delivery system, the pizzas are made fresh and held in specially-designed slow-cook ovens that ensure their freshness. The company’s dedication to research and response to consumer trends and the development of new, quality products quality concluded in the largest reformation of the Eagle Boys menu in its history. Launched in early 2010, the new menu featured a variety of new items.

Apart from new pizzas, new items such as a chocolate fudge mousse dessert, pasta dishes, additional side dishes and drinks were introduced. Customers have responded with a resounding satisfaction, and throughout 2010 Eagle Boys enjoyed one of its biggest increases in sales in company history. Eagle Boys continues to develop new and accessible ways to respond to challenges and internal and external influences. Creating innovative and unique products is what has propelled the company to success, and it continues to be a mainstay of Eagle Boys’ activities today.