Regulation and Pizza Hut Essay

School cafeterias served nearly $500 million of pizza a year. Only frozen pizza was used, however, because freshly prep ard pizza was in topic excluded by a U. S. Department of Agriculture (USDA) regulation that required critique of any pizza with nub toppings that was exchange at wholesale for resale. The homogeneous was true for opposite institutions such as hospitals and prisons. The 39 broader military extend was the resolution of the institutional market to freshly-prepared foods such as pizza and other prompt foods.Pizza shacks overall business strategy was to reach a pizza distri howeverion company, and the institutional market was crucial to that strategy. agree to Roger Rydell of Pizza hut, schools were a potentially enormous business for us. Wed want to have every one of our 4,000 delivery-capable units nationwide serving at least one school. 1 Since Pizza Hut was excluded from the institutional market by the USDA regulation, the task before Pizza Hut was to develop a nonmarket strategy to modify this regulation to allow school cafeterias and ultimately other institutions to order fresh pizza.There were two basic institutional arenas in which Pizza Hut could address this nonmarket foreclosure of a market. One was the regulatory machine of the USDA. From the perspective of a bureaucracy such as the USDA, an exemption from its meat inspection responsibilities would be required. It seems unlikely that the USDA would want to weaken its stimulate inspection program. Indeed, the opponents of an exemption for fresh pizza, as led by the field Frozen Pizza Institute, sought to have the contentious issue resolve by the USDA.A resolution in that institutional arena would look at an extensive administrative process requiring public hearings, publication of proposed regulations in the national Register, a comment period, possible adoption of an exemption, and possible legal gainsay in the federal courts by the losing side. This process would likely be sort of lengthy. (See Chapter 10 for a discussion of this process. ) Pizza Hut first seek to obtain a USDA exemption without an administrative process but failed in its attempt. The second institutional arena was Congress, which could enact legislation to vacate regulations.Pizza Hut worked through Congress to include a provide in a 1991 agriculture bill that would allow fresh pizza to be purchased by school cafeterias without USDA inspection. The amendment directed the USDA to issue regulations by August 1992 allowing fresh pizza with meat toppings to be sold to private and public institutions. 2 Pizza Hut had headquarters in Wichita, Kansas, and Representative Dan Glickman, whose district includes Wichita, commented that the USDA regulation was a Byzantine, outdated and, instead honestly, an anti-competitive regulatory structure. 3.One question was whether this issue was resolved by intimacy group politics or by some public insurance policy process based on a car eful study of the be and benefits. The opposition, for example, argued that an exemption posed a health hazard, whereas Pizza Hut argued that prepare toppings such as pepperoni had already undergone two inspectionsone at the touch plant and one earlier at the slaughterhouse. These arguments likely had little effect on the decision other than to convince members of Congress that there was no health hazard in fresh pizza sold to institutions.This issue was ultimately resolved through interest group politics, with Pizza Hut and other fast-food chains backing the exemption and frozen pizza interests fence it. 1 Wall Street Journal, November 29, 1991. 2 Wall Street Journal, November 29, 1991. 3 San Francisco Chronicle, November 28, 1991. Assignment Questions (30%) 1. What is/are the real issue based on the episode study? (2 marks) 2. Describe the 4Is based on the Pizza Hut Case Study. (8 marks) 3. Describe the roles of news media in this case study. (10 marks) 4. From the case study , where those issues are in their life cycles? Discuss. (10 marks).