Background
The case study is about a sandwich chain named Pret A Manger. It is an incident of the year 2011 which occurred with the CEO of this British company, Clive Schlee. The comparison between the company and Starbucks is drawn where it is seen that the employees of Starbucks are not so customer friendly as that of Pret. The employees of Pret pay more attention to the care about their well- being. They are very sincere and passionate when it comes to welcoming the customers and for this specific gesture they are recruited and rewarded. Being the CEO of the company, he was relieved to find this difference in the attitudes of the employees of his company with that of Starbucks. This made him think about the future of his company because he was assured about the growth by the board of directors. But he was worried about it because it seemed to be difficult to find the appropriate real estate for fulfilling the company’s requirements to become the centre of attraction with sufficient space for kitchen.
The company used the concept of twin store in the year 2005 which was met with mixed reaction. The twin stores had very small kitchens and so the sandwiches were delivered in trolleys from the main shops which were at a distance. But the company was not much developed with this system. While there were employees who encouraged the development of twin stores but on the other hand, certain employees were totally against it. This encouraged the CEO to think if the twin stores will contribute in the growth of Pret or it will result in the loss of reputation of the company.
With the introduction of the case study, it can be understood that the problem statement involves the growth of the company and the strategies to be included. Pret A Manger was opened by the two friends Julian Metcalfe and Sinclair Beecham with the intention to provide the best sandwiches in London. But after some years, the original owners got sidelined from the business and appointed Andrew Rolfe as the CEO of the company. The owners were satisfied with their expansion and success rate but their expansion at the US proved to be complete failure. This is because they could not meet up to the expectation of the customer preferences at the US. They were torn apart in two years when they faced consecutive losses which in turn resulted in the increase of leverage. The outcome of this loss resulted in the expulsion of the previous CEO and Clive Schlee took the place. The previous market shares that were bought by McDonald were also sold which accounted for a large number of transactions. Therefore the strategies to be used for the growth and development of Pret with the expansion of the company were considered as the problem statement for research.
The research questions for the particular statement can be as follows-
The aim of this research is to find out if Pret A manger will be able to find a successful growth in international business and whether their twin store concept will be fruitful or not. The researcher has to find out the reason behind the problem statement and what are probable solutions to the mentioned problem statement. To fulfill the research aim some objectives are outlined below to help the researcher in his work.
The objectives to meet the targeted goal are as follows-
These aforesaid statements will help in the survey to find out the solutions of the research questions mentioned above. The analysis of this case study will further look into the quality of food provided by this sandwich chain as compared to its competitors. It will also take care of the fact that the employees of this particular company are more cordial in welcoming the customers as compared to the employees of their competitors. Pret has won over the competitive advantage because of their real estate expertise. Pret has also taken the support of various strategies which will help them to get more customers. But they need to use other approaches as well to fulfill the aims and objectives of the survey. The remaining part of the report will take into consideration a number of factors including the details of the situation given in the case study, the problem statement and the pertinent models or theories, the required tools for the analysis of the problem. These will be further used for critical analysis of the problem by implementing the techniques and tools which will be helpful in finding the solution and create a business plan for the same.
Description of the situation
After going through the case study and the company websites, it was observed that the problem of Pret A Manger was stated clearly. They are suffering from international crisis and their twin store concept has also suffered a major loss. They did not pay much attention to customer preference when opening their store in the United States. These problems on the part of the company were clearly explained in the case study and also the various websites relevant to the company. Newspaper reports were also a proof to the failure of twin store concept when there was a public outrage regarding their food being made in the store kitchen. the According to the case study, the competition for the company was increasing in the United Kingdom which included strong supermarkets such as Sainsburys and Tesco and premium quality food retailers such as Spencers Simply Food and Waitrose and Marks along with the important chain of coffee shops such as Starbucks and chain of pre- packed sandwich shops such as EAT. It was considered by the CEO of Pret that none of the companies that are mentioned above would be able to meet up to the quality of food that Pret serves or the customer service provided by the employees of the company. The stores of Pret are also located at such important locations that make them easily accessible and available.
They not only serve sandwiches but also coffee, salads, soups and pastries. They have kept a consistent trend of not using artificial color, flavor, and preservatives in their food. Rather they have the habit of using fresh and natural ingredients which attract more customers. This is because in today’s world, it is nearly impossible to get food which is rich in fresh and healthy nutrients. The most processed food of the company includes Bacon and its 50% ingredients are imported from the United States and 80% from the European Union. But they never com promised with the quality of food served to the customers. As mentioned by Clive Schlee, the CEO, they cannot compromise the taste in between the war of health and nutrition. According to him, they could provide the customers with high quality of foods because each of their shops involves a kitchen along with.
When it comes to their competitors such as the sandwich chain EAT, they produce the sandwich at a centrally located store with kitchen and then deliver those to the specific outlets. This resulted in the reduction of food processing costs by minimizing the task and equipments so that the product consistency is maintained. Pret is on the advantageous position in this regard because with the advent of their in- store kitchen, the quality of food is enhanced as it increases freshness and decreases left over stocks. With the presence of in- store kitchens, the employees also have a different approach of selling the products. They maintain a production schedule for the processing of sandwiches which include availability of fresh sandwiches in the morning till 10.30 am. Then the employees get a break to prepare for the rush of lunch hours. After that the kitchen is set for the production of 16- 20 sandwiches in a batch and the remnants at the end of the day are donated to the local food bank. This is a good approach taken by the company to help the hungry and the needy people.
One of the important parts of the case study is the customer services provided by the company which made the beginning. The customer service of Pret A Manger is much appreciable than that of Starbucks as it was experienced by the CEO of Pret A Manger, Clive Schlee. The employees are hired and rewarded on the basis of their behavior towards the customers. This is one beneficial part of this company which is incomparable with that of the competitors. The employees of Pret A Manger have a unique way of connecting to their customers. The strange fact is that the employees are not trained on customer service rather their quality of dealing with the customers is what they get the bonus for. The selection of the candidates is based on their enthusiastic, energetic, jovial, sincerity and friendly characteristics. The customers are also benefitted by getting a cup of free coffee or a pastry if they are regular in the store. This increases the customer value on the part of the company and helps in the establishment of personal relationship with the employees. The employee behavior is so much appealing to the stakeholders that when a coffee server of Pret wanted to shift to another job, the company was flooded with letters of plea and requests for him to stay. It is not quite natural for every sandwich chain in any area. Moreover, it was not the only time when such an instance took place in the history of Pret A Manger.
The company also takes care of the waiting tome of their customers. They look into the fact that once a customer enters the store, he must be attended within 60 seconds. They believe in the theory of, ‘Pret A Manger means ready to eat, not ready to wait’. They always take their customers as the first preference and tasks as the second preference. All the stores of Pret have a minimum of five to seven employees constantly working to keep up with the task as well as serving the customers so that they never run short of time. There is other front of the store employees hired to give the timely report of production to the managers.
Their strategy of providing feedback forms to every customer at all the Pret stores actually helps them to make the necessary alterations in their services. The customers are also permitted to contact the CEO of the company regarding anything because they believe that a Pret customer has all the right to be heard and listened to. On an average, the company is presented with 1000 email and 350 phone calls. Pret also has the patience to reply back to all the emails and phone calls because they think it to be their key responsibility. In one such incident when the customers were not happy with the popcorn recipe of the company, Pret changed the recipe at an instant. This is how they cope up with the rising demands of the customers in order to keep them satisfied. The third prime factor, apart from the food quality and customer service that keeps them at an advantageous position compared to the competitors is the location of their stores. They have always targeted the corner locations for low costs and their stores are located at alternative blocks to be reached easily.
The problem statement in the case study is the expansion of the company Pret A Manger in the United States. It was mentioned that the company suffered a terrible loss in two years after they opened 16 stores in the New York City as they were unable to understand the customer preferences of drip coffee over espressos and lattes. They thought that the problem will be eradicated gradually but they were proved wrong. Therefore the problem lies with the international expansion of the company Pret A manger (Bowie 2016). Another problem that lay with the growth of the company is their twin store system. There were employees in the store who had gladly accepted the system of twin store but at the same time there were others who contradicted it. A time came in 2009, when a number of customers went against the company accusing them of misleading. They protested against the fact that the company has no right to brag about the fact that the products are made in the in- store kitchen when it was not the truth in case of twin stores (Chiaro and Rossato 2015). The people were also worried about the fact that the off- site processing of food would minimize the connection of the employees with the processing of the food products. This is because when the manufacturing is not done in the store, there is nothing to pull the employees in the selling process. When the stores are located away from the kitchen, it was a problem for the employees in the twin store to make a better selection of the products such as sandwiches. There is always a problem with the correct amount of availability when the sandwiches are delivered in trucks or trolleys. The in- store kitchen helps in the ready availability of food to the customers, but the problem of selection of sandwiches would affect the offers provided by the store which hardly produced any offense against the parent shop (Cook 2016).
As the expansion of the company was considered as the problem statement in this case study there two strategies were used in this regard. The two basic strategic frameworks that can be used by the company to capture the US market include Waterfall strategy and Sprinkler strategy. These strategies are dependent on the product type and lifecycle. The frameworks are built on the theories Innovation Diffusion Models in domination and another competitive Game theory framework in on the basis of business economics (Davis 2013).
If the company Pret A Manger follows the Waterfall strategy, they will be able to spread their business in the international market. To spread their business in the new country, the company has to create their own identity after entering the new market. By creating an identity of their own, the company will be able to get an idea of the possible market size and the revenue patterns, the target audience, create brand awareness, recognize the possible distribution channels, and find out the possible sales strategy to be implemented (Ehrenfeucht 2017). Product identity is the first and foremost work to be done in the new market which is followed by the expansion with almost similar structure. Learning is a less risky process in the strategy formulation in the expansion of business. This strategy is used for the products with a longer life cycle. The Sprinkler strategy is used when the markets are approached simultaneously and when the products have a shorter life cycle. It involves the use of skimming product pricing strategy to produce more profits from the sales.
Fig- The strategic frameworks
Source- Heasman and Morley 2017
Strength
Opportunities
The strengths and opportunities of the sandwich chain Pret A Manger is mentioned above which can be considered for resolving the strategic issues relevant to the company. These also show that the people of UK are eagerly waiting for a healthy lifestyle which comes with nutritious food. Pret A manger has been successful in developing their business in the UK but the problem was found in international expansion.
Fig: Strategic thinking model
Source: (Chiaro and Rossato 2015)
Each and every organizations whether small or big, need leaders at all levels for helping in critical thinking, anticipating issues, problem solving, decision making and implantation of actions. The same is applicable for Pret A Manger too so it should be kept in mind that they remain attached with their long term organizational goals. They must overcome the issues by strategic thinking which should become a part of their daily routine in order to attain success.
Weakness
Threats
As the threats and weaknesses of the company are mentioned above, it can be said that by using the strategic theories and models the company will be able to work on their upcoming challenges. It should be kept in mind that the low prices of the product should not decrease the value. With the preparation of new dishes each week there is a chance that their innovation might face difficulty which in turn will hamper the customer preference of specific food.
The survey on the particular study will involve a proposed plan for data analysis. It is a critical plan because it decides the process of analysis for the research hypotheses. In this proposed plan of analysis, the transformation and assumption of data cleaning is addressed along with the actual analytic strategy that is selected. For the particular research on the problem of the given case study, both qualitative and quantitative data will be gathered for information. The qualitative research will help the company to understand the political, social, economic, cultural, organizational and environmental factors of the area which might affect the business of Pret A Manger. The qualitative research analysis will gather the theoretical data for illustrative explanations and individual responses (Hubbard 2017). On the other hand, the quantitative data that will be collected for the specific research will analyze the standard measures from the large sample. This process uses statistical method of sampling by receiving clustered responses. Random sampling will be used in the process of quantitative data analysis while open- ended and less structured protocols will be used for qualitative data analysis. The tools for the former one include structured data collection instruments and the latter one depends on the interactive interviews.
The researcher must be able to find out the sources of data to form a basis of their research work. The primary data will be collected using surveys, interview, experiments or direct observation methods. These are collected by the researcher with the intention of finding solution to the specific problem. It refers to the collection of data from the original first hand source. Although not published but still it is the most authentic and reliable source of data collection. The process of secondary data collection will be done by gathering information from a range of documents which include census and market studies (Kim and Mauborgne 2015). It is already collected and published by the previous researchers. Primary data once used become the source of secondary data for another. These are less expensive and easily accessible than primary data. For the given case study analysis, both primary and secondary data will be used for the data collection methods. The researcher will have to take into consideration the in- depth insights for the convenience of the company to enter international market. For this particular research study, the researcher will use the survey method for 10 respondents who work in the company along with the two managers. The response received by the survey is provided below.
According to the information gathered in chapter 3, it can be analyzed that at present, the CEO of the company, Clive Schlee is in a dilemma of expanding the twin concept. Both advantages and disadvantages of the system were considered to check if it will be beneficial for the company or not. It was realized that if Pret starts to expand their stores at the rate of 15% every year, then they will have to make some necessary amendments in their business model. The research will be able to find a solution to the question if the twin store concept was an appropriate change or not. It is also a matter of thought if the twin concept was responsible for the devaluation of Pret. The CEO was also worried about it that if he did not approach the twin concept then what else was there to help the company in achieving their target. The study of the market of this sandwich chain has showed that they are way ahead of their competitors so they should only pay attention in making their services better with every passing day (Mohamed 2013).
According to the survey of the primary level workers of Pret A Manger, it was found out that some of them were in support of the twin store concept while the others were against it. As they had responded in the survey, the people who supported the twin store concept mentioned that the system was good as the people can get ample food at close intervals. In this way, the company will be able to get hold of the customers away from the competitors. If the competitors’ stores were located nearby then the customers would get the option when there lay a probability that they might not choose Pret over the competitors. The five people who responded in support of this concept provided almost similar reasons except one. The odd one mentioned that he is in support of the twin store concept but the company needs to think something about their tagline which states that all the food is made fresh in the kitchen. In twin store concept the food is processd in the parent shop and delivered to the twin stores of that area. He also contradicted himself by stating that this might reduce the number of customers because people mostly prefer freshly made food but if the food is brought from outside it mode lose its freshness which will lead to customer dissatisfaction (Slavin 2014).
The workers who replied against the twin store concept mentioned that it is not worthy for the development of the company. The customers will not easily accept the change in Pret when they were used to freshly made food from the kitchen. Moreover, they are more comfortable working in such stores which are attached with kitchens. The in- store kitchen motivate them to sell the product properly with appropriate style and gesture.
The managers, on the other hand, when interviewed, mentioned that twin store concept is a matter of confusion among them too. What they added along with it is the international expansion and their innovation with the dishes. They understood well that the innovation in food and the ethics that they are maintaining will make them slow in the competitive run. But they are not assured if they move from their traditional method of operational activities they will be able to retain their image or not. They are also worried about the global expansion because at present they are only spread in 6 countries which are not enough for the development of the company. But the two managers spoke in the same language when they mentioned about their massive failure in United States when they had opened their outlets there. They had mentioned that they are working on the strategic challenges by using theories and models which are relevant to the business model of Pret A Manger (Smith 2016).
The responses that were received by the researcher in the form of survey and interview centered on the same problem of global expansion of the company. They are in a dilemma what are the necessary steps required by them to successfully make an impact on other countries. Although they have figured out certain steps but they are not confident about those. They are worried whether the steps found suitable theoretically will make a practical impact or not. Still they are trying to work on their aims and objectives to meet the targeted goals.
The situation analysis of Pret A Manger includes the leading micro factors of customers, suppliers, employees and competitors. The buying habits of the customers are among the intrinsic factors to enhance the business. It becomes an important factor in the cities because of more population and a large number of people to serve. With more orders the local businesses gain more profit. The suppliers must be sure that the distributors match the quality of sustainable food served to the customers. Pret is recognized for its fast, sustainable and ready food. The employees work in cooperation and collaboration with the customers to provide them with the best possible services. Their brand message is consistent and it is revised every week in the Wednesday meetings along with the discussion to improve their ways of operation (Spence and Piqueras-Fiszman 2014).
The positioning of Pret A Manger on the positioning map can be described as follows-
Fig- Brand positioning
Source- (Tiberius 2014)
According to the current positioning statement, Pret A Manger provides high quality of products at a lower price because they want to capitalize their sustainability and at the same time maintain customer retention with their unbeatable prices. But they strictly maintain the quality of food even though the cost is reduced. By this approach they will be able to pull the young group who will refer to their peers to go to Pret. Pret can be considered as the suitable catering services for the domestic business that can treat their employees well without affecting the overhead expense.
Their proposition is to maintain their position as the market leader even with the rise of their competitor, Starbucks by increasing their unique values. For this they will need to increase the loyalty and work on customer satisfaction in spite of Starbucks’ global appeal. Their concept is to appeal to the urban customers with their products that range from $3.89 to $6.99. They excel in making faster casual food because they brag about serving the customers in a minute. Although Pret faces competition from the horde of restaurants in the New York City but their brand has managed to create a unique segment of expensive, healthy and transferable food lovers who want speed and pace (Wicks et al. 2017). They provide an equal balance of flavor, protein and bread which is an amazing product positioning point at the striking rate of obesity and the desire of the consumer for nutritional food.
The problem statement included the expansion of the company globally and the sustenance of their twin concept. Since their inception, the company has managed to create their image with the feeling of tradition and authenticity by adding sophistication in their menu and providing food to the homeless people. The company can further seek to internationalize for profit and growth, better opportunities that the foreign markets in Europe provide, scale of economies and uniqueness of the product offered by the company. International expansion provides better scope of diversification and adds revenue. To keep up with the overseas competitors Pret A Manger has to keep a track of their customers in order to understand the reason behind the preference of buying a certain product and what influences them. The proposed solution for the problem of Pret can be selling at lower price along with focus on the connoisseur of instant food which might fill the gap in the market.
Pret has to take into consideration the cultural differences of the various places which affect the taste preferences of the customers. For instance, the people in US drink filter coffee and not espresso based drinks like the people in Europe. Again in Asia, the market is totally different where sandwich is not considered as a whole meal so Pret has to look into those factors while expanding in the Asian market. It must be kept in mind that not every promotion and product will be gladly accepted in all the countries so they will have to identify the taste of the people by a market research in order to make a stronger impact on their target audience. Pret has to use an insight- driven approach which will enable them to identify the potential customers and make amendments in the service as per their needs. If these strategies are executed properly then it will not be hard for expanding business in another country. There are other factors which need to be considered while making entry in the foreign market and those are FDI, joint venture, strategic alliance, franchising, licensing and exporting.
Pret can also take a strategic approach to reduce their impact on the environment and make a positive impact on the surrounding communities. To make their business sustainable they can also move away from the typical meal models and make something unique of their own. Their current sustainable business strategy includes health and nutrition, resources, sustainable farming, society and people. They strive to make the greatest impact on these areas to make a better influence on the larger industry.
Out of all the available options, the best fit solutions can be Foreign Direct Investment or FDI which will be compatible with the company culture too. It would permit Pret to have a complete control over their daily operational activities as well as the financial decisions. There is a lot of risk involved with this approach of entry in the market but this is the only option which is most appropriate for the future mission and vision of the company. It is best suited for Pret to use their common sense approach. They cannot work alone to make the necessary modifications therefore they should work in collaboration with the experts from NGOs, peers of other industries, academicians in order to attain their target goals.
It was also a problem if the twin store concept will be suitable for the expansion of the company. Well, it can be said that as the twin store concept had failed previously so it will be better to brand the products of twin store differently as they always brag about their freshly made products. To retain its image and reputation they should keep the brand’s unique value proposition consistent. The twin stores at a close distance from each other can be used in the new expansion strategy but the company should make the branding separately so that the customers do not feel deceived.
It can be recommended for this research on Pret A Manger that the company should look into diversification in their menu while keeping the original product value intact at the same prices. They can use the method of TQM or Total Quality Management in a better way to keep up with their quality of meeting the customer requirements even in other countries. It is the best method considered for continuous improvement of Pret A Manger. With a proper management system the company will be able to able to operate smoothly and achieve their long term goals. They should have a good cash management system and a proper budget management system for sustainable operation. The company will be able to grow at full length if they can ensure that their products are meeting or overshooting the customer expectation by using quality assurance. They should always plan and execute new strategies.
|
Objectives |
Tasks |
Success Criteria |
Time frame |
Resources |
|
To expand in a global market |
Bring diversification in the menu |
Increase in the number of customers |
1 year |
More employees |
|
To keep up the high quality |
Training the employees in the suitable way |
More sale in the product |
2 years |
The same ingredients |
|
To be the market leader |
Keeping their product value consistent at the same price |
No fear of competitors |
5 years |
The same food along with some innovations |
|
To keep a track on the customer preferences |
Conduct a market survey |
Increasing revenue |
1 year |
Feedback forms and questionnaires |
|
To keep a track of the competitors |
Observe the new strategies and innovations of the competitors |
Increase in the annual turnover |
3 years |
The products of the competitors |
|
To keep the customers satisfied |
Maintain good relationship by reducing their waiting time in the store |
Visit of more customers over their competitors |
1 year |
A cup of free coffee or an extra sandwich |
|
To maintain the nutritious value of food |
Include more natural and organic products than artificial colors and flavors |
The name of Pret will be spread world wide |
1 year |
Import ingredients from the best places such as coffee beans from Equador |
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|
Expand globally |
|||||
|
High quality of products |
|||||
|
Be the market leader |
|||||
|
Track on customer preferences |
|||||
|
Track on competitors |
|||||
|
Customer satisfaction |
|||||
|
Maintenance of food value |
The study had certain limitations such as the framing of research aims and objectives. These were mentioned too widely and needed more specifications. In a small study as this, fulfillment of all the aims and objectives are not possible. The researcher also required more sample survey in order to derive a proper conclusion. The analysis was done only on the basis of few random samples.
The primary data that have been collected for this particular research will be used as a source of secondary data for further research on this subject. For working more on this subject in the future, the next researchers will have to take care that the data is gathered properly by suitable methods of sampling. In doing so, the particular subject will be able to gain valuable considerations.
References
Bowie, D., Buttle, F., Brookes, M. and Mariussen, A., 2016. Hospitality marketing. Taylor & Francis.
Chiaro, D. and Rossato, L., 2015. Food and translation, translation and food.
Cook, S., 2016. Food for Good.
Davis, B., Lockwood, A., Pantelidis, I. and Alcott, P., 2013. Food and beverage management. Routledge.
Ehrenfeucht, R., 2017. Do food trucks and pedestrians conflict on urban streets?. Journal of Urban Design, 22(2), pp.273-290.
Heasman, M. and Morley, A.S., 2017. Earning a Crust? A review of labour trends in UK food manufacturing.
Hubbard, P., 2017. Fast Food, Slow Food. In The Battle for the High Street (pp. 169-198). Palgrave Macmillan UK.
Kim, W.C. and Mauborgne, R., 2015. Red ocean traps. Harvard Business Review, 93(3), pp.68-73.
Mohamed, K., 2013. SUCCESSFUL OPERATIONS STRATEGIES: A CASE STUDY OF” PRET A MANAGER. International Journal of Management Research and Reviews, 3(12), p.3850.
Robb, K., 2015. London, When We. River Teeth: A Journal of Nonfiction Narrative, 17(1), pp.143-146.
Slavin, J., 2014. The Nutrition Elite. Cereal Foods World, 59(4), pp.212-213.
Smith, A.F., 2016. Fast Food: The Good, the Bad and the Hungry. Reaktion Books.
Spence, C. and Piqueras-Fiszman, B., 2014. The perfect meal: the multisensory science of food and dining. John Wiley & Sons.
Tiberius, E.D., 2014. Multinational Companies and their Impact on the World Economy. Ovidius University Annals, Economic Sciences Series, 14(1), pp.12-15.
Wicks, A.C., Wicks, A.C., Mead, J., Mead, J., Wicks, A.C., Wicks, A.C., Mead, J. and Mead, J., 2017. Caffeine with a Conscience. Darden Business Publishing Cases, pp.1-12.
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