In 1986 the company named Pert A Manger was established by the two friends who are the founder of the company. The first shop of Pert A Manger was established in London. The shop has done well in London. The company in starting deals in the sandwiches and drinks. The idea of opening a sandwich shop is came to the mind of the founder when they did not find a good quality and fresh sandwich any were in London. In 2001 the company has opened 100 shops in United Kingdom by seen the success of the business the big brand of food industry McDonalds purchase the one third shares of the company and offer them that they will purchase the rest two third share if they will expand the business. To fulfil the condition of McDonalds the company has expand their business in U.S and Hong Kong. However, in foreign market they did not get success because the preferences of people are different. To change the conditions of the company in international market Clive Schlee and Julian Metcalfe join the company. In 2008, McDonalds sold the shares of the company and the Bridgepoint and European company purchase the shares of Pert A Manger. Bridgepoint give Pert A Manger a challenge to open up more shops and expand the business by 15% every year. To fulfil the condition of the Bridgepoint the company has made a decision to open twin shops. The twin shops are small in size and do not have the capacity of installing kitchen in them and this arise as a big issue or problem for the company.
The give case study is all about the problem face by the Pert A Manger by opening a twin shops. There are many people and newspaper who has questioned the quality and freshness of the food which is been served at the twin shop. This report is designed to understand the background of the case study, the problems which were raised in front of Pert A Manger. In this report the problem is been analyses with the help of literature review, the current position of Pert A Manger is been evaluated with help of SWOT analysis and PEST Analysis. For Analysis few finding are arrived and on the bases of findings various solution for the problems is been discussed.
The aim and objective of this case study is to identify the problems that Pret A Manger has faced when the Bridgepoint has purchase the share of company and give them a challenge that Pret A Manger has expanding business by 15% every year. The company has decided to open a twin shops but by establishing a twin shop various problems were arise. The objective of this report is to identify a proper and relevant solution for the problems.
Two college friends Sinclair Beecham and Julian Metcalfe established a sandwich chain in London. The idea of establishing the sandwich chain was developed in the mind of Sinclair Beecham and Julian Metcalfe when they do not found a proper sandwich anywhere in London. In 1986, after taking loan of amount £17000 from bank, they opened a first sandwich shop with name Pret A Manger. The Pret A Manger opened with the assurance to their customers that they will provide simple, delicious food that is served by friendly and motivated staff. In 1998, the Pret A Manger expand its business by establishing 100 shops and in 2001 by noticing the growth of Pret A Manger McDonalds purchase the one third portion, that valued £150 million. McDonald provides an option to Pret A Manger that, they will purchase the remaining two-third share of company if Pret A Manger will grow and expand their business. The offer that is been given by McDonald boost the management of Pret A Manger to expand their business internationally and domestically. The Pret A Manger starts expanding their Shops in London as well internationally in New York and Hong Kong. Pret A Manger opened 16 shops in New York but they did not get success there, the main reason of their failure is they fail to adopt the U.S customer preferences.
In 2003, Clive Schlee has joined Pret A Manger as a CEO and Julian Metcalfe has returned to the business as a Creative Director. They both join the business with the assurance of restraining global expansion and launching back-to-back turnaround. Out of 16, they closed 6 shops in Manhattan and permanently shut down the joint venture in Japan. They provide their main focuses on the company’s core value of natural food and fast and friendly service. In 2008, McDonald sold its share of Pret A Manger and Bridgepoint a European private equity brought a majority share of Pret A Manger valued £245 million.
The Pret a Manager is well known in whole England For their best quality food that is been serve with attentive services. By 2011, the in total Pret A Manger is having 282 shops in Britain, Hong Kong and U.S. The company is under pressured to expand its business by 15% every year. For continue expansion company needs a good and perfect location. For reducing, these two pressures the company has planned to open twin shops. The sizes of twin shops are small so they did not have their own kitchen (O’Halloran, 2013). The sandwich were prepared in a close parent shop and transported throughout the day on a trolley. There are few benefits attached with the twin shop, it allows Pret A Manger to open in great sites that are not large sufficient for kitchen, and it will also provide an opportunity to grow the leadership pipeline.
With the few benefits twin shops are associated with problems also, in the era of market saturation, it is very difficult for the Pret a Manger to find a suitable location that can satisfy the need of company for prime street visibility and necessary kitchen space. The other problem that the company is facing is Bridegpoint the company that has purchase the share of Pret a Manager has given them a challenge that they have to expand their business by increasing number of shops by 15 every year. To accomplish the challenges the company has planned to open a Twin shops but there will be no kitchen area available at these shops and that will clearly go against the promise made by the company to its customers that food will fresh and be prepare in the kitchen at the same time.
After going through the case study it is been evaluated, the company is facing few problems while opening the Twin shops in London. In previous the company is open with the motive to provide fresh food by using artificial flavours, colour, and presentation. the company believes that the taste of food is good because they have kitchen in every shop and other shops who sell sandwiches do not have kitchens and the food was delivered to them via trucks which are consider to be not fresh (Almquist, and Roberts, 2010). The In-shop kitchen allows the firms to maximize freshness and minimize stick outs. The management of company believes that speed, genuineness of services and quality are the factors that are providing competitive advantage to the company.
Competitive advantage the Pret’s A Manager has is their expertise in real estate. To open a shop the company allows select the best sites in London. Mainly they target corner locations, even though the rent is 20% more from them. The company has open up the shops only few blocks from each other. They feel that the employees or workers were unwilling to walk more than two blocks for lunch (Gyrd-Jones and Kornum, 2013).
When the Bridgepoint brought the shares of the Pret’s A Manager, they give them a challenge or target that they will expand their branches of sandwich shops by 15% every month. To fulfil the challenge the management of company has decided to open a twin shops. The size of twin shops are small that is the reason the kitchen set up will not fit in there.
On May 2009, the largest selling one newspaper of United Kingdom ‘The Sun’ write an article stating Pret’s A Manager were misleading their customers. They claimed that the promise that company made that food are prepared in their kitchen is not been fulfilled in the twin shop. The area of twin shops are small the company cannot set up the kitchens (Bowie, Brookes and Mariussen, 2016). The food which is been serve in the twin shop is prepared at the parent shop and then delivered to the twin shops through trolley.
The twin shops are facing problems of the keeping a full selection of sandwiches because the kitchen is situated in another shop. The Head of City operation of the company noted that twin shops cut down the availability. The former manager at Pret’s A Manager has stated that it is easier to run shops with the kitchen because of the just in time nature of production. It is hard for twin shop to operate without kitchen and for product they have to depend on other shops to deliver food.
During analysing the case the issues or problems, which arise are:
According to Cummins, Flint, and Matthews, (2014) expansion is the key of success of every business if the company is doing well in their respective field they should thing about expanding the business. With expanding the business, the companies can increase their revenues and can build their brand value in the market. The building a good brand image in the market is the priority of the companies in the present era. There are various mode of expansion is available in the market to expand the business the company can choose the best option which is most suitable for them. Garcia-Segovia, Harrington and Seo, (2015) stated in their article that if the company who are related to or who are producing items related to the edibles like sandwich, burger, pop-corns any many more and their business are doing good in the particular area they should expand their business to another area by opening a chain in that selected area. They also give emphases on expanding the business in domestic country first. The Authors say that if the Food chain want to grow it is important for them to operate with in domestic country first. If the company will successfully expand the business in the domestic market it will be help them in building a good brand image in the market and sue to the good in house image they can expand the business internationally. Domestic market creates a strong base for the expansion internationally. Samapundo, et.al. (2015) stated in their article that for better option of expansion it is important for the company to expand their business abroad. If the product did not get success in the domestic market they may get chance to expand their business in other countries by adopting various options like joint venture, partnership, franchising. If the business is successful in the domestic market, it will be easy for that business to expand internationally.
According to Reisch, Eberle and Lorek, (2013) location plays a vital role in success of every business especially in case of food and drinks related business. Location is the factor that provides a competitive advantage to the company. Zaitseva, (2013) with the help of the specific location the businessperson can ensure their success by targeting their target market. The locations will that is desired by the person to open up the food chain or restaurant need to be those place that is easily accessible and has a good visibility. According to Tolmay, (2017) the location of business should have a parking space, in present condition the availability of parking space become a very necessary or a perk.
To identify the issues in the Pert’s A Manger first step which is been taken is read the case study at least two time. By going through the case study two times it will help in identify the minor issues that can be miss at the time of first reading. By reading the case study, the writer will analyse and evaluate the problems that the company is facing. Here in this case study the company is facing majorly three problems (Melo and Galan, 2011). First is they are not getting right location to set up their twin shops, second the size of twin shop is small that’s why they cannot install kitchen at the shop and third problem is of expanding business on continues bases. Regarding these problem writer has found out the related articles and journal in which they find out the various mode of expansion the reason behind expansion, benefits of domestic and international expansion and the advantages related to the location (Pomering, Noble and Johnson, 2011).
Pret A Manger is a British most famous and environmental friendly company, who are specialised in supplying fresh drinks and sandwiches to people of London, U.S and Hong Kong. The food is not which the company supplies do not contain any chemicals and are made in the in-shop kitchens at very branch of Pret A Manger. To analyse the aspects of the case study and for the company it is important to consider external and internal factors that are infusing working of company positively as well as negatively. To analyse the case study here in this writing SWOT analysis and PEST analysis is been conducted.
SWOT analysis is the strategic planning that is used to analyse the threats, opportunities, weaknesses and strength of the selected business. Strengths of Pret A Manger state that the company provide fresh and tasty sandwiches that are chemical free and environment friendly. These approaches provide edge to the company over their competitor, because now day the people are more health conscious and care more about their health (Backhaus and Tikoo, 2014). Pret A Manger has created a strong brand image and brand name in United Kingdom that will provide a support to the company when company will go international to set up their more branches in the international market. Pret A Manger has given their full emphasis to the staff servicing and the quality of food, the food need to good, tasty and health and the staff should serve the food quick and with effective impression on customers (Davies and Miles, 2010). This strategy will help the company in keeping the quality and standards of their products and will make their customers to be loyal. While choosing the location for the shop the company have chosen a place, which is at the corner of the street, especially where there the population is dense, and consist of office workers and affluent people. Pret do not provide franchise they handle all there shop under their supervision to maintain the quality of the food and services (Morrison and Thomas, 2011). With strengths, the Pret A Manger has some weakness. Few weakness of the company are Pret A Manger do not invest their money on marketing in other words they do not engage in the direct marketing and mass media presence. This will provide the bad impact on the sale of the company as pr the survey conducted, lot of children below the age of 25 do not know much about the brand because of lack of the marketing and due to lack of knowledge of the brand, they prefer going for eating to the competitors of Pret A Manger. The Pret A Manger do not design the shop to provide a facility of family treat as other joints do, they mainly focus on the customers who are office worker and affluent consumers. Apart from United Kingdom Pret A Manger is facing problem in global presence.
Opportunities for the companies are, integration and globalisation process give Pret A Manger an excellent opportunities to penetrate into new markets. Pret A Manger has spread their business in the three countries, United Kingdom, United States and Hong Kong. They have few more opportunities like European countries (Zuber, 2011). The Pret A Manger are specialised in sandwich and drinks there is an opportunity lies with them to introduce new product in the market that are trending in present conditions. One more opportunity that the company have is introducing new technology in the business that will help them in increasing business efficiency and make the work quick. By adopting, the cost cutting method into business the company can increase their profits the cost cutting can be done in certain areas like manufacturing and designing the latest coffee making machines. With opportunities, some threats are also associated with the business of Pert A Manger. The company deals in sandwich and drinks the market of food chains and restaurant is really wide and competition in rising at huge rate (Staff, 2011). There are so many competitors are available in the market to face the competition while maintaining quality of food and service becomes a challenge for the company. The prices of petrol is rising on continues bases and because of this the number of customers may got reduce.
To analyse the business of Pert A Manger here the Pest analyses is been conducted the first factor of pest analysis is Political Factor when the big brand McDonalds show their interest in Pert A Manger by purchasing it 33% share. Brand value of the Pert A Manger increase in the market of United Kingdom by the act of McDonalds. People also show their interest by visiting the place more. Economic Factors includes, the prices of petrol increases due to with the reduction in customers visit is been noted. The prices of indigents which the company is using to make sandwich and drinks also goes high which is reducing the profit of the company. The devaluation also becomes a factor that is influencing the business between United Kingdom and United States. Social factors the products that the company is making is certified product, Fairtrade and Rainforest Alliance provide the certificate to the company. The certificate includes all conservation in it few are, fair treatment and water conservation, good employee’s conditions at work, ecosystem conservation, integrated pest management, wildlife conservation and integrated management of waste. Technological Factors, it helps the business of Pert A Manger to grow by adopting environmental friendly technique. The company is using trolleys, which are operated technically with the help of a remote to deliver food to the twin shops. Technology help the company in manufacturing and designing a modern coffee and sandwich making machines with the help of which they can save time and human capital.
While reading the case study some findings are made which are been discussed here, Pret A Manger is a British sandwich chain which is been established by the two founders Julian Metcalfe and Sinclair. The idea of opening a sandwich shop in generated in the mind of these two founders came when they did not find good quality sandwich anywhere in London. When Pret A Manger has opened the sandwich shop in London the aim is to deliver quality food and service to their customers. When the company reaches to the benchmark of 100 shops in 2001 McDonalds a big food chain of the world shown their interest in the company by purchasing 33% shares and give them an option that if Pert A Manger will expand their business more they will purchase the remaining shares of the company. This offer pushes the Pert A Manger to expand the business on large scale (Pert a Manger, 2012). To expand the business the company start opening their shops in abroad the chosen countries by Pert A Manger are United States and Hong Kong. In Unites States, the company has open 16 shop but they did not get success because they got problem or they got failed to meet the taste preferences of customers of U.S. To meet the demand of the people of U.S and Hong Kong in 2003 Clive Schlee joins company as CEO and Julian Metcalfe returned to the business as Creative Director.
Later in 2008, McDonalds sold the share of Pert A Manger and Bridgepoint bought a majority of Pert A Manger share valuing 345 million. In additional Bridgepoint give a challenge to the company to expand their business 15% every year. Hence, by 2011 Pert A Manger had 282 shops in Hong Kong, United states and Britain (Pert a Manger, 2012).
In U.S market Pert A Manger is facing lots of competition and it is increasing continuously, the other companies who are the competition of Pert A Manger are supermarket like Sainsbury and Tesco, high quality retail food chain Waitrose and Mark and Spencer simply food, there are several major coffee shops are also their like Starbucks. But the management off Pert A Manger believes that none of their competition companies could match the food quality, customer service and prime shop location.
The company mainly offers the sandwiches, salads, soups, pastries and coffee. In all its foods they promise that they only serve fresh food which is environment friendly. They exclusively use natural and fresh ingredients. Pert A Manger source its 50% ingredients from the united kingdom and 80% from the European union. The management of Pert A Manger sates that the food which is served at the shop are very fresh because every shop of the Pert A Manger has In-Shop kitchen. At In-Shop kitchen the food is prepared at the same time when it is been ordered. Further, the management states that the other sandwich shops like EAT made their sandwiches in the central facility and deliver them on trucks to various shops (Pert a Manger, 2012).
The management of Pert A Manger stated that the speed, quality and genuineness in service is one of their advantage. The employees who work at shop are always encouraged to engage with customers by adopting unique ways. There is not customer training is been provided to the employees they hire those candidates who displayed characteristics such as genuine friendliness, sincerity, enthusiasm, happiness being themselves and ability to create a sense of fun (Pert a Manger, 2012). The employees are given an authority to offer free coffee or pastries to regular customers.
The third advantage which Pert A Manger has is its real estate expertise. The management of Pert A Manger states that they are fortunate enough to have some of the best location for the business. Pert A Manger target corner location for opening shops even though the landlord demanded 20% extra money, they believe through corner shop is much better visibility and natural light (Pert a Manger, 2012).
The company who have purchased the share of the company has given them a challenge to expand the business by 15% every year to meet the requirement of company has decide to open a twin shop. The decision made by Pert A Manger because they thought the size of twin shop will be small and with small size they can expand their business in various areas (Pert a Manger, 2012). There is one problem lies with the twin shop the size is small and in the small size shop it is not possible to install a Kitchen so it was decided that the food is been prepared in the parent kitchen and delivered to the twin shop via trolley. This concept is not fulfilling the main promise of the company of serving fresh food.
In order to fulfil the conditions or challenge given by Bridgepoint to Pert A Manger the company has to expand their business up to 15% every year. To fulfil the requirements of the company has made a decision to open up a twin shops but there is many problems arise with the open up of twin. Here in this section all the possible solution is been discussed.
The main and most important issue which is been arise by maximum number of people is the twin shop do not have a kitchen and that is the reason they sell at Twin shop is not fresh and healthy. The food was prepared at the parent shop and then it derived to twin shop in this time spume the quality of food get disturbed and the freshness has gone. To change the mind-set of the people about the twin shop Pert A Manger can use following solution:
Many times it is been seen that many of the ideal customers did not chose the company because they are not aware about the real facts behind the screen. The same is happening with Pert A Manger at twin shop they sell the fresh and quality food but some newspaper and few people spread rumours that the twin shop did not have kitchen that is why they do not serve fresh food. Due to these rumours, the company is bearing huge losses. To make people aware about the reality of the twin shop it is important that Pert A Manger required to adopt the brand exercise.
Iit is imporntant for the company to place the brand image of the twin shop slighly different from the actul shop. They can diffenciate the twin shop by using a diffenent anme which is expaling the atucal working of the twin shop e.g. Pert Express or Pert A Manger (Parker, 2012).
To positin the brand in themarket it i important for the company to provide a enough amount of the physicial evidence. The physical evidences will prove that the sandwiches which are sell at twin shop are fresh. The avidence will prove that the ssnadwich which was brought by the trolly are prepared at the closest parent shop and were bring by the employees with motor transport (Gordon, 2012). The twin shop should display the loaction of the parent shop fron where the food is been delivered. The package of the sandwich nad other food items will state that the food is safe andd fresh (Frow, and Payne, 2011). Twin Shop should have a display board which is desigened to tell the numbder of orders served, next delivery number and should provide its enphhasis on providing fresh food.
when the customers visit to the shop or at the twin shop the employees of the company will givethem a index card and ask them to fill the card the will contain the problem that they are facing ta the twin shop annd if not then mention the positive side of positive aspect of twin shop. In that index card the visitors will fill thedetails and deposite them in a box those cards will be sent tothe managemt of Pert A Manger (Menegaki, 2012). When the index cards isbeen delivered to the management they will read all positive and negative comments given by the people who were visited to the shop. After reading the comments they will start their planning to adders the sated problems and be the best brand. The people and brand are similar both have personalities or archetypes responate with teir ideal coustomer. Here the company have to establish a good brand persona or pesonlity of the twin shop in the market (Parker, 2012). To build the brand image of the twin shop the mnagemnt can hire some movie or shops pesonility to promote the brand of the nad the twin shop. When the company is going to hire the personlity with the help of the celebrity image the comapny can mix the image of twin shop. It is very imoortant for the comapny let the customer know about the fact and actual condation of the twin shop.
Conclusion
To conclude, when Bridgepoint provie a challange to the Pert A manager to expand a busiess by 15% every year the company ahs decided to open up twin shops in the market. With the opening of the twin shop various problem arises the main issue is the size of the twin shop is small and due to that they cannot install kitchen in there. The ideal consumers things that the food which they serve is not fresh. To spread awareness among people the company need to spread awraness among ideal customers by developing brand image and by providing physical evidence of the freshness of the food which is served at twin shop od Pert a Manger.
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