I. Marketing Background A. Overview of the Industry 1. Market Size Pizza Hut's smaller format store is about half the size and cost of its iconic red-roofed buildings. Chain began developing smaller stores three years ago. It so far has opened more than 300 and sees potential for 2,000 more in next five to 10 years. Pizza Hut is ordering up smaller restaurants. The iconic red-roofed chain, which saw its heyday in the 1980s, says downsizing and remodelling will allow it to open more restaurants and turn a profit faster for franchisees. Pizza Hut began developing this new model, dubbed Delco Lite, about three years ago when it realized delivery--which is the way most people prefer to receive their pizza--wasn't representing as much of the business as it once did. The new model opens up another 2,000 potential sites for Pizza Hut over the next five to 10 years. Pizza Hut, which is part of Yum Brands Inc. YUM, +0.60% has about 8,400 locations, most of which are the traditional, dine-in restaurants. Delco Lite trades the red roofs and dining rooms for a more contemporary design that fits in to tighter places and focuses more on delivery and carry-out. Pizza Hut has opened more than 300, and is mostly building them, in favor of the larger, stand-alone ones. The new model is about half the size of Pizza Hut's traditional restaurants and costs about half as much for franchisees to build, opening up more potential sites in the U.S.

2. Market Trends (Past 3-5yrs) Pizza Hut, Domino’s Pizza and Papa John’s once again rank first in sales and unit counts for the past 3years. Pizza Hut holds the top spot, with 7,595 units, up slightly from last year’s 7,542, and accounting for 10.57% of all pizzerias in the world. With these locations, Pizza Hut captures 14.68% of all pizza sales.

B. Market Profile

C. Environmental Analysis

1. Analysis of