Business Strategy and Development: Pret A Manger Case Study Analysis

This case study analyzes the British sandwich chain Pret A Manger, focusing on its international expansion challenges and the controversial twin store concept. The company, known for its high-quality, fresh food and excellent customer service, aims to expand beyond its current six countries but faces issues like customer preference mismatches in the US and employee concerns about the twin store model. The study examines the company's history, including its initial success and subsequent setbacks, particularly in the US market. It identifies the problems, including the failure of the US expansion and the mixed reactions to the twin store concept, and proposes solutions to improve Pret A Manger's operations and facilitate successful international growth. The analysis involves strategic theories, data sources, and findings related to customer preferences, competitor analysis, and potential strategies for market entry and expansion. The study offers recommendations and an action plan to help Pret A Manger navigate the complexities of international business, ensuring sustainable growth while maintaining its brand identity.

Running head: PRET A MANGER
Pret A Manger
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Executive Summary
This assignment is based on the analysis of case study of a UK based sandwich chain Pret A
Manger. They excel in providing high quality food products at a low price. The distinguishing
quality of the company is their freshly processed food at their in- store kitchens except at the
twin shops where the food is delivered from the parent shop. The impressive customer service by
the employees and attending them within a minute is noteworthy. Their stores are located in 6
countries and intend to expand more. The detail of the expansion is further elaborated throughout
this assignment.
The case study has thrown light upon the problem statement of the study. The aim of the
company to expand beyond the limited countries can face two kinds of problems. They have
previously opened 16 stores in the United States which had faced two years of constant loss
because they were unaware of the customer preferences. Another problem lies in their twin store
concept which is partly accepted and partly ignored by their employees. The twin store concept
faced controversy when the customers felt that they were cheated by the company. Although the
twin stores served products which were delivered by the parent companies still their tagline said
made in the shop’s kitchen. That is why it will not be a great idea to start this concept abroad
without a separate branding.
The analysis of the problem aimed to make the operations of the company better so that
they will be able to rectify their previous mistakes and grow in the international market. The
analysis also intended to initiate new concepts and strategies which will ease the operational
activities of Pret and help in its smooth running. It was aimed to solve the confusion regarding
the twin store concept and whether it will be used in the expanded market concept. The aim of
the analysis was to make a business plan for the company keeping in consideration their current
position in the market.
The problem can be analyzed by using the observation method which will help the
company to keep a track on their customers as well as the competitors. A record of the
competitors’ products and services will help Pret to make the necessary changes as per the
market demand. Moreover there are feedback forms at every store which include the valuable
opinions of the customers. The opinions are necessary for the company to keep up to the

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customer requirements. The survey questionnaire will also help in getting a record of what is
essential for the company to internationalize their business.
The findings highlighted that there are different strategies and concepts that can be used
for overcoming the problems that can be experienced while internationalizing the company. The
strategies were mentioned in detail in the chapters. The findings also involved the needs and
wants of the customers and what they expect from Pret. The outcome of the study reflected on
several facts and measures to be considered in the international expansion of the sandwich chain.

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Acknowledgement
This research has helped me to experience the best possible learning of my life. By conducting
this research I have learnt various concepts, models and theories. I thank the almighty God for
letting me complete this assignment in a successful way. Then I want to thank my supervisor
______________ who is my friend, philosopher and guide. I also want to thank my parents for
being supportive and accommodative for completing this research. I want to thank my friends
for giving me the moral support while conducting this research.

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Table of Contents
Chapter 1..........................................................................................................................................6
Introduction to the case study......................................................................................................6
Case study background............................................................................................................6
Statement of the problem.........................................................................................................6
Aims and Objectives................................................................................................................7
Chapter 2..........................................................................................................................................8
Case brief.....................................................................................................................................8
Description of the situation......................................................................................................8
Chapter 3........................................................................................................................................10
Statement of the problems.........................................................................................................10
Strategic theories.......................................................................................................................11
Proposed plan of analysis..........................................................................................................12
Sources of data...........................................................................................................................13
Chapter 4........................................................................................................................................13
Analysis and findings................................................................................................................13
Chapter 5........................................................................................................................................18
Proposed solution.......................................................................................................................18
Recommendations......................................................................................................................20
Action Plan................................................................................................................................20
Timeline.....................................................................................................................................21
References......................................................................................................................................23
Appendix........................................................................................................................................24

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Chapter 1
Introduction to the case study
Case study 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

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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-
a) What can be the reasons behind the failure of twin stores previously?
b) Why Pret A Manger could not expand in the US?
c) Will the twin store system ruin the reputation of Pret A Manger and decrease the
customer value?
Research Aim
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.
Research Objectives
The objectives to meet the targeted goal are as follows-
a) To find out the growth rate of Pret A Manger
b) To find out the customer preferences and buying pattern of those particular countries
c) To find out about the competitors and their market share
d) To conduct a survey of the customers of those countries
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

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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.
Chapter 2
Case brief
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

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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

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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.
Chapter 3
Statement of the problems
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

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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).
Strategic theories
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

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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
 Fresh and healthy food prepared on a daily basis
 An uncompromised approach towards corporate social responsibility
 Effective store locations
 Amazing growth rate of 13.9% in the year 2015in UK alone
 Impressive customer service