Optimizing Business Strategy for Pret A Manger

In the era of food industries, Pert A Manger's differentiation strategy is a unique presence that improves its competitive standing and decreases dependence on a particular supplier. The company's focus on qualitative food with fresh and natural ingredients sets it apart from competitors, making differentiation a feasible and accessible strategy.

Strategic Decision Making

EXECUTIVE SUMMARY
One of the most crucial processes for entire organization these days is to go through the
appropriate development of strategic decisions. With the help of appropriate strategic planning
company can make good choices in the process of deciding how several issues are being
addressed. On this concern, the present study has been made on the basis of Pret A Manger
which is a UK based fast food. This study presented that with the help of Porter’s generic
strategies company can select most effective and appropriate strategic to attain competitive edge.
In this regard, Pert A Manger can adopt differentiation strategy to make their customers more
loyal towards their company. With the help of this they are able to retain their clients and
enhance their sales and profit margin as well.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
External environment analysis.....................................................................................................1
Competitive Industry analysis.....................................................................................................2
Strategic Choices.........................................................................................................................3
Development of appropriate evaluation criteria and evaluation of strategic choices..................4
Selection and justification of the optimum strategy....................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In order to attain higher competitive advantage one of the most important tasks for
business organization is to develop most effective strategies. An effective strategic choice helps
an organization for making sustainable strategic decisions. With the help of appropriate strategic
planning company can make good choices in the process of deciding how several issues are
being addressed (Meskendahl, 2010). In the present research, Pret A Manger organization is
taken into consideration which is a fast food chain based in the UK. The company was started in
the year of 1984 by Jeffrey Hyman in Hampstead, London. It’s very first door shop opened in
1986 with a mission to create natural food by avoiding all the chemicals.
Today, they are having more than 350 Pret’s worldwide with shops in the UK, USA,
Paris, Hong Kong etc. All their customers are enjoying fresh and healthy menu. Further, Pret A
Manger provides excellent food items like sandwiches, salads and baguettes, as well as hot
beverages like coffee. Strategic purpose of this food zone is to make positive brand image in the
mind-set of customers as well as became the top most ranking within the food industry (About
us. 2016). For this, they are serving proper sandwiches without any additional chemicals and
preservatives. Further; the present study gives total description about the strategic position of the
company with the help of macro and micro environmental factors as well as their strategic
Capability analysis. Moreover, it also critically assesses the strategic options open to it in order
to recommend an appropriate strategy that would be suitable for them.
External environment analysis
In order to analyse that in which environment does Pret A Manger operates, PESTLE
analysis will be made. It determines all the external factors which impact the overall
performance of the company.
PESTLE
Political: McDonalds bought 33% of Pret A Manger’s stakes due to the huge windfall of
investments for Pret A Manger. It has generated more political power for Pret than never before
and due to this company is able to open at least twenty shops in USA and Hong Kong (Chen and
et.al., 2012).
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Environmental: Company is highly focused with the environment friendly factor and do
not use any chemicals and unhygienic content while preparing food. They focus on recycling of
products rather than waste.
Social: Pret is following environment friendly culture coupled with enthusiastic and
over-eager staff. The food is created on a fresh daily basis which highly meets the expectations
of people.
Technological: Pret has embraced technology and utilize it for own advancement like e-
HRM. Through this, workers can create more output in less timing. In addition to this, they can
keep track of all their in-house guests and stocks as well (Sutherland, 2010). This highly affects
their performance in a positive respect.
Legal: On the legal perspective Pret have faced several issues and the company is not
free from intrigue which hampers its performance. Some people filed cases against the sandwich
empire still Pret has managed to keep its slate clear of any negative implications about the brand.
All their employees are paid more than minimum national wages (Chaudhuri, 2015).
Economical: Due to the changing economic condition of country they might face
declining sales stage.
SWOT Analysis
Strengths:
 Unique products and positive brand image
 Loyal followers or customer loyalty Unique and health food chain as well as
its environment friendly approach is
greatly embraced by people.
Threats:
 Intense Competition from other
prestigious brands such as Subway etc.
(Pearson, 2015).
Weaknesses:
 Lack of Scale
 Too many stores sharing the same items Prices are too high for sandwiches and
coffee (Woiceshyn, 2011).
Opportunities:
 Due to the high consumer loyalty it is
easy to retain them
 Expansion in other countries
Competitive Industry analysis
PORTER’S 5 FORCES
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Supplier power: High
Buyer Power: Low
Competitive rivalry: Low
Threat of substitution: Low
Threat of new entrants: Moderate
Strategic Choices
One of the most important tasks for organization is the selection of their growth
strategies. These choices highly determine that business choosing when and where to compete
and how to win against the competition. For this, one of the most suitable technique is Porter’s
generic strategy through this they can determine how a company pursue higher competitive
advantage. There are mainly four types of competitive strategies i.e.
Cost Leadership: Under this strategy, company selects to become the low cost producer
in its industry. Company can achieve higher competitive advantage by the way of reducing cost
and increasing market share. It is all about minimizing cost by delivering high quality products
and services (Reimann, Schilke and Thomas, 2010). In this strategy all those companies lies
under which a company either sells its products at average prices to earn higher profit and market
share than its competitor or it sells below industry prices to earn high profits.
Differentiation: It is considered as a most important strategy for all those organizations
that are facing huge competition. It involves making the products and services different and more
attractive from competitors. For this, company need good research, development as well as
innovation. In order to attain success in this industry it is quite essential for company to have
appropriate access to leading scientific research and a creative product development team as well
as strong sales team (Ho, Xu and Dey, 2010).
Focus: In this type of strategy, organization particular focuses on the niche market by
understanding the particular needs and demands of customers. Further, company is highly
focused with the changing desires. Differentiation Focus: It highly focuses on the differentiation in its target segment from
its competitors. Cost Focus: Here, with the help of this strategy company can develop uniquely low cost
and well specified product for their market.
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Both the above given technique clearly determines that company is adding something
extra as a result of serving only that market niche (Burlton, 2010).
Development of appropriate evaluation criteria and evaluation of strategic choices
In order to succeed in today’s highly competitive and globalized world it is quite essential
to go through the selection of appropriate and most suitable strategy. Pret A Manger Company
wants to display on its every shop window and in its website. It creates handmade, natural food
by avoiding chemicals and preservatives. From the above Porter’s generic strategy it can be
determine that company can select one of the best strategy among differentiation and cost
leadership. Evaluation of best strategic choices can be done by the way of using SAFe model
which is a criterion for evaluation.
Differentiation Cost leadership
Suitability  
Accessibility  
Feasibility 
From the above given model firm can easily test its strategic choice feasibility and
acceptability in the market. With the help of this model has been founded that differentiation is
the strategy which is highly suitable for Pert A Manger as they have a relatively high market
share and the market is growing at a good rate. Fast food industry is becoming one of the most
preferable industries for families, students as well as kids. In this, needs and demands of
customers are changing day by day. However, food is a source which customers prefer to be very
hygienic and nutritious. Due to these factors it is quite essential for Pert A Manger to
differentiate its products from competitors (Triantaphyllou, 2013). There must be a USP which is
highly liked by customers. As per the above evaluation it has been determine that differentiation
is suitable, accessible as well as feasible too while on the other hand, cost leadership is suitable
at some extent as company is already having high market share.
Suitability: Organization is serving within the fast food industry which is highly
demanding these days. As per the above given situational analysis it has been founded that there
is a moderate rate of threat of new entrants. By achieving differentiation Strategy Company can
build its unique presence in the era of food industries. It improves the organisation’s competitive
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standing and also decreases dependence on a particular supplier (Werbach, 2011). On the other
hand, Cost leadership is somewhat suitable but due to company’s high market share it is not
more important to minimize the cost of company.
Feasible: Differentiation strategy is feasible as well as it can be implemented
successfully. One of the major factors behind its feasibility is that organisation is capable of
performing to the required level i.e. quality level, service level etc. They can easily serve high
quality product to their customers. On the other cost leadership is not a feasible strategy as Pert
A Manger Company is not able to sell its products on below industry prices to earn high profits
(Ferrell and Fraedrich, 2014).
Accessibility: Differentiation strategy is highly accessible by customers as they do
require change due to their changing preference. Taste of consumer varies according to spices
used by industry. Due to this, Pert A Manger can add some different products in their menu card
as compare to their competitors. On the other hand, cost leadership is highly accessible by
customers due to the low prices products. Majority of customers like to buy low prices products
and enjoy such services as well. Further, it can be determine that both these strategies are
accessible by customers.
Selection and justification of the optimum strategy
From the above table of SAFe it can be determine that in order to attain higher
competitive advantage it is one of the most crucial factors for firm to take better strategic
decision. However, there are several ways to attract number of customers but the differentiation
strategy is adequate in the organisation’s environment. Pert A Manger is highly focused with its
qualitative food, giving the best to its customers in terms of fresh and natural ingredients.
Company has set is strong standpoint on its value for which there are no compromises made. By
following this concept only they can take effective strategic decisions regarding the
differentiation strategy (Gigerenzer and Gaissmaier, 2011). Here, in this company can launch
any unique selling proposition for their food items in term of quality, prices, ingredients,
hygienic factor etc. or they can also introduce latest product in comparison to their competitors.
Pert A Manger is highly dynamic in terms of its resources and environmental strategic
perspective. It can be determine as Environment - Values – Resources. They not only serve an
excellent place to eat but highly healthy and wonderful food as well. Lastly, they had introduced
some of the new food items such as fruit sticks, British berries fruit bowl, vegetarian sushi,
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summer ham salad, and Chef's Italian chicken salad. With this, they are able to make their
customer’s eating experience more memorable (Zsambok and Klein, 2014). Within this concern,
it can be determine from both the selected strategy differentiation and cost leadership,
differentiation is one of the most suitable for Pert A Manger and helps them in setting their own
standard. Through this, they can attain higher competitive advantage and it could be considered
as a much easier option for growth. Further, it is considered as most optimum strategy which
provides high customer loyalty to company and they can enhance their entire profit margin
(Gigerenzer and Gaissmaier, 2011). Moreover, it is the best strategic choice by which firm can
entail higher competitive advantage.
CONCLUSION
From the above whole study it has been founded that there are Pert A Manger has lot of
potential but due to the increasing competition within the food industry they are facing several
difficulties. It has been founded that as per the SAFe analysis company can adopt differentiation
strategy which is one of the most suitable strategic choices for them. Through this, they are able
to attract more number of customers and enhance their sales margin. From this whole study it has
been analysed that by taking effective strategic decisions firm can easily attain higher
competitive advantage.
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REFERENCES
Books and Journals
Burlton, R., 2010. Delivering business strategy through process management. Springer Berlin
Heidelberg.
Chen, C. C. and et.al., 2012. A business strategy selection of green supply chain management via
an analytic network process. Computers & Mathematics with Applications. 64(8).
pp.2544-2557.
Ferrell, O. C. and Fraedrich, J., 2014. Business ethics: Ethical decision making & cases. Cengage
learning.
Gigerenzer, G. and Gaissmaier, W., 2011. Heuristic decision making. Annual review of
psychology. 62. pp.451-482.
Ho, W., Xu, X. and Dey, P. K., 2010. Multi-criteria decision making approaches for supplier
evaluation and selection: A literature review. European Journal of Operational
Research. 202(1). pp.16-24.
Meskendahl, S., 2010. The influence of business strategy on project portfolio management and
its success—a conceptual framework. International Journal of Project Management.
28(8). pp.807-817.
Reimann, M., Schilke, O. and Thomas, J.S., 2010. Customer relationship management and firm
performance: the mediating role of business strategy. Journal of the Academy of
Marketing Science. 38(3). pp.326-346.
Sutherland, L. A., 2010. Environmental grants and regulations in strategic farm business
decision-making: a case study of attitudinal behaviour in Scotland. Land Use Policy.
27(2). pp.415-423.
Triantaphyllou, E., 2013. Multi-criteria decision making methods: a comparative study. Springer
Science & Business Media.
Werbach, A., 2011. Strategy for sustainability. Strategic Direction.
Woiceshyn, J., 2011. A model for ethical decision making in business: Reasoning, intuition, and
rational moral principles. Journal of business ethics. 104(3). pp.311-323.
Zsambok, C. E. and Klein, G., 2014. Naturalistic decision making. Psychology Press.
Online
About us. 2016. [Online]. Available through: < https://www.pret.com/en-us/about-pret>.
[Accessed on 16th January 2016].
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Chaudhuri, S., 2015. Pret A Manger to Tap the Accelerator on Growth. [Online]. Available
through: < http://www.wsj.com/articles/pret-a-manger-to-tap-the-accelerator-on-growth-
1429869932>. [Accessed on 15th January 2016].
Pearson, B., 2015. The Price of Loyalty: What Pret A Manger Can Learn From Starbucks.
[Online]. Available through: <
http://www.forbes.com/sites/bryanpearson/2015/05/06/free-pret-a-manger-starbucks-
caribou/>. [Accessed on 16th January 2016].
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