Executive Summary
The paper provides an analysis of the Pret Case study. Pret A Manger is commonly known as “Pret”; an international sandwich shop chain which is based in the United Kingdom. The company was founded by college friends Sinclair Beecham and Julian Metcalfe in the year 1986. Pret is defined by the quality of the food offered, the customer service and the prime shop locations. Because of the pressure to expand, the company started opening what it called ‘twin’ shops that lacked their kitchen. While there were numerous benefits of the ‘twin’ shops, the idea had its problems. The primary challenge for the current CEO is whether to expand the twin concept.
The report has provided for an introduction and the importance of case studies in helping managers become better. Secondly, a background of the company and its current situation has been detailed. Moreover, the major problem areas that Pret is facing are listed. These issues are marketing management, human resource, organizational behaviour, international business, marketing and strategic management. Additionally, the problems identified from the case provided are customer service problem, logistics problem, training problem, global expansion issues, location selection problem, cannibalization, shop spreading issues, twin concept, hiring and recruitment, and motivation problem. A model has been selected on each of these problems. Some of the considered models are gap model, blue ocean strategy, Porter’s 7p, Ansoff Matric, benchmarking, value discipline and BCG matrix among others.
Consequently, this report has provided a solution for each problem, a recommendation and an action plan. The final section of this case analysis provides a five-year forecast for Pret.

Introduction
The topic of this paper is integrated case study of Pret A Manger. The case provides an analysis of Pret A Manger since inception, tracing its growth and challenges faced until 2011. A background of the company has been detailed including how it was started. There is also a section on ‘What makes prêt ‘pret” providing in-depth details of what the company offers different from the competitors specifically quality food, customer service, and prime shop locations. Besides, there are details of how the company manages its employees, in particular, highlighting the hiring strategy, training, buddy days, and employee empowerment. Finally, the case study also explains the company approach to compensation and bonuses and concludes by detailing twin shops benefits and challenges.
There are thousands if not hundreds of businesses which compete against the attention of the customers. It is, therefore, necessary for organizations to develop case studies as they are significant in providing a competitive advantage in a competitive industry. For managers, case studies are a perfect choice to become better s they tell a story of the past, present, and the future (Mora, Bordeaux College of Business, and Wine Appreciation 2013, p. 16). For managers, this is critical to understanding the changes in the business and make appropriate and informed decisions. Also, case studies have their focus on the customer who is essential to the survival of the business and through them, managers get an opportunity to review on the quality of services and products provided to the customer, the constant complains and what are their expectations moving forward (Dul, and Hak 2007, p. 6). Therefore, managers become proactive in decision making and laying out strategies for the future. Another aspect of case studies that help in making a better manager is the ability to gain more knowledge about the company, the business, and the industry (Kulkarni, Pachpande, and Pachpande 2011, p. 8). In general, a case study is an appropriate approach to shaping a better, competent manager (Angus 2014).
Background of the problem
Pret A Manger is commonly known as “Pret”; an international sandwich shop chain which is based in the United Kingdom founded by college friends Sinclair Beecham and Julian Metcalfe in the year 1986 (Kourdi 2009, p. 164). The name of the company was bought from a dormant organization. The first shop was set up in Victoria Street promising to offer simple, delicious food served by a motivated and friendly staff (Dimant, 2010, p. 1-6). The company operates in the fast food industry (Whitley 1999, p. 197). The owners of the business started disengaging after a decade of success and in 1998 hired Andrew Rolfe as the CEO and a few years later sold a third of the company to McDonald’s (Gifford, and McNally 2007, p. 1-13). McDonald’s was set to acquire the remaining business only after meeting certain growth rates (Floor 2006, p. 217). Following this, there was rapid expansion both domestically and internationally. In the United States, the business registered two years consecutive losses leading to the dismissal of Rolfe in 2003 (Daft 2006, p. 263). Clive Schlee was appointed the new CEO based on his rich curriculum vitae extending from 1980. Pret is defined by the quality of the food offered, the customer service and the prime shop locations. In 2008, McDonald sold all Pret shares, and a majority stake was bought by Bridgepoint who set a goal to expand the number of shops by 15% annually (Dimant, Dysart, Lanoix, Leung, and Lindner 2010; Libman, and Feldman 2013). Because of the pressure to expand, the company started opening what it called ‘twin’ shops that lacked their kitchen. While there were numerous benefits of the ‘twin’ shops, the idea had its problems. The primary challenge is for Schlee who contemplates on the pros and cons of having to expand the twin concept. If the twin concept is not reasonable, then what other strategies were available?
Research problem
From the case study provided, there are a number of problems which can be identified. The problems have been picked from relevant business areas. First, related to marketing management is the problem of customer service as well as the logistics problem (Frei, Goldberg, Sice 2012, p. 1-12). While the company boasts of having quality, speed, and genuineness of service, it does not offer customer service training. Training employees on customer service is essential to help them gain knowledge on the recent trends and behaviours of customers. The logistics problem is related to the twin shops concept where the sandwiches are not prepared on the premises. Having the kitchen’s location in another shop meant it was challenging to maintain a full selection of sandwiches (Frei, Goldberg, Sice 2012, p. 1-12). Secondly, in relation to human resource management, the identifiable problems are training and hiring and recruitment. The training course offered by the company was through a workbook which does not necessarily achieve the desired results. The other problem related to human resource is the process of hiring and recruiting employees. The final decision on hiring was left only to the existing prêt employees rather than the management. Hiring and recruiting should be on merit. In relation to organizational behaviour, the company lacks strategies for employee motivation. Manager’s needs in the organization are well taken care of compared to the average employee (Frei, Goldberg, Sice 2012, p. 1-12). Another problem related to international business is the adaptation in the global market. Pret has established base in UK and not in other foreign countries. The move to open shops in the United States and Japan led to massive losses. In relation to marketing, one of the problems easily seen in the case study has been location for its shops. The challenge to the expansion plans by Pret has been finding a prime street that offers visibility and adequate kitchen space. Secondly, in London, while Pret shops are located in some of the best sites, they are only a few blocks from each other. In normal circumstances, a company wish is to have shops spread out to attract customers from a larger pool. In addition to this, there is the problem of twin shop concept which can be related to strategic management. Schlee is contemplating on whether to accept or reject the twin concept and what other strategies could help the company achieve its growth targets. Finally, in relation to marketing, opening shops close to each other cannibalize each other. When more competitors open shops, it leads to a further drop in sales volume (Frei, Goldberg, Sice 2012, p. 1-12).
Research questions
Marketing Management
• How can the organization enhance customer service?
• What are the alternatives available to ensure that the logistic problem is addressed?
Human Resource Management
• How can training and development be enhanced?
• Which hiring and recruitment procedures are most appropriate for the organization?
Organizational Behaviour
• How can Pret motivate its entire employee fairly?
International Business
• Which approach can the company adopt to expand to the global market?
Marketing
• Selection of a suitable location is challenging for the organization, what should be the guiding factor?
• How can the organization avoid the problem of cannibalization?
• What are the alternatives for the organization to achieve spreading out of shops?
Strategic Management
• What other strategies can Pret adopt in place of the twin shop concept?
Research aims and objectives
The aim of the research is finding out alternative strategies other than the twin concept that can help Pret achieve its growth targets. The research objectives are as below.
Marketing Management
• To find out how the organization enhance customer service
• To examine the alternatives available to ensure that the logistic problem is addressed
Human Resource Management
• To determine how training and development can be enhanced
• To find out hiring and recruitment procedures that are most appropriate for Pret
Organizational Behaviour
• To examine how Pret can motivate its entire employee fairly
International Business
• To determine the best approach the company adopt to expand to the global market
Marketing
• To find out the guiding factor when selecting a suitable location for Pret’s shop
• To find out how the organization can avoid the problem of cannibalization
• To determine the alternatives available for the organization to achieve spreading out of shops
Strategic Management
• To examine other strategies Pret can adopt in place of the twin shop concept
Significance of the study
Completing this research is critical for Pret which obviously is facing a problem on its growth strategy. For the organization’s management, it would be critical to resolve this and other problems the company is facing to ensure that it has a competitive advantage in the next decade. For employees, solving some of the problems ensures their needs are addressed and are motivated to do their chores. Finally, stakeholders will benefit through increase in dividends.

Corporate and Competitive Appraisal
PESTLE analysis is a critical tool that is used in by organizations to monitor the external marketing environment, and it is an acronym for political, economic, social, technological, environmental, and legal (Gillespie 2013, p. 34). From this table in Appendix 1, some of the political factors affecting Pret include government laws and regulations targeting junk food while some economic factors influencing it are the adjustment of prices of edible commodities. The significant social concern is related to the obesity concerns while technological factors include the ease of access to healthy eating. As a result, this might discourage some consumers from feeding on some of its products. An elaborate analysis is shown in the appendices.
One of the crucial aspects of PESTLE analysis is the ability to use the information acquired to conduct the internal analysis of an organization (Sammut‐Bonnici, and Galea 2014). Internal analysis is done using assessment of the strengths and weaknesses of an organization. The tool to guide in this process is the SWOT analysis an acronym for strengths, weaknesses, opportunities, and threats (Sammut‐Bonnici, and Galea 2014; Sarsby 2016, p. 15-20). The table below presents a SWOT analysis for Pret. The primary strength of Pret is the appropriate location of its shops as well as its quality products. Nevertheless, the low switching costs for customers is a weakness, but there are opportunities such as international market expansion. Appendix 2 provides a table showing the company’s SWOT.
Having analysed the internal and external environment of Pret, it is critical to conduct a competitive analysis. The competitive analysis has been undertaken using Porter’s five forces as shown in the table at the appendix (Porter 2008, p. 25-40). Due to the high costs in the city centres, it becomes difficult for entrants to have fixed assets or have business premises. New entrants have to work hard to build brands which can be trusted by other consumers making it a costly affair to engage. Owing to the low switching costs between competitors, the consumers can have new choices every day making the bargaining power to rise. Additionally, it does not cost the consumer to switch between competitors and therefore, this raises the bargaining power. A high number of competitors in the market make the competitive rivalry to increase in the market. Furthermore, when there are more competitors in the market, firms are made to employ aggressive tactics to win over the customers. Because of the relative abundance of the raw materials for Pret’s food, suppliers are in a position that they are not able to insist on high clauses when negotiating for contracts. As a result, this leads to the lowering of the suppliers’ bargaining power. The threat of substitute products and low switching costs within the market makes the competitors fight extra hard to get more customers as well as keeping the current ones. An in-depth competitive analysis has been shown in Appendix 3. However, the graph below shows the market share that Pret has compared to the competitors.

Source: Owler 2017
Analysis of the situation
Problem Statement
Pret is facing a major problem regarding the growth strategy that it should adopt to achieve the 15% target annually. The current concept under consideration is the twin concept where there are twin shops without kitchen. However, to be in consistent with the company’s promise of never putting sandwiches on a truck, a trolley was used to transport them after preparation in a nearby parent shop. While the concept has benefits such as allowing Pret to open shops in great locations, there are also major problems associated with it. The dilemma that the CEO, Schlee finds himself in is whether the twin concept was a reasonable modification and if not, what other alternatives were available to help the company achieve its growth target. The company faces other problems which are shown in the diagram below.
Mind Map of Pret’s problems

Source: Author
Plan of Analysis
An analysis of this case study related to Pret has been planned steadily with the aim of ensuring that the particular problems identified and shown above have a lasting solution. On the basis of the problem and its cause, relevant models were selected to solve each of the ten issues. The classification done below provided an opportunity for conducting an efficient analysis.
Table 1 Ten model classification under ten Pret’s problems
Customer service problem Logistics problem Training problem Lack of motivation problem Global expansion problem
Gap Model The value discipline Strategic Training Model Hertzberg Model Ansoff’s Theory
Location selection problem Cannibalization Shop spreading problem Hiring and recruitment Strategy alternative problem- Twin concept
Kotler 7ps of marketing Benchmarking Blue ocean strategy Strategic human capital planning BCG Matrix
Source: Author
Each of the ten problems that have been identified above was matched with a relevant model that Pret can utilize to achieve a solution. The first issue is customer service, and the selected model is the Gap model. The consumer of the 21st century has become demanding as they want both high-quality products and services and at the same time excellent customer service (Mauri, Minazzi, and Muccio 2013, p. 134). From the viewpoint of the customer, customer service is part of the physical product or service being delivered. In the case of Pret, delivering customer service to customers should be an ongoing concern. By using the Gap model, the organization gets to identify gaps between actual services provided and the customer expectation. Importantly, the model helps in closing the gap and achieving improvement in customer service (Blešić, Ivkov-Džigurski, Dragin, Ivanović, and Pantelić 2011, p. 40). By closing the service gaps, Pret can meet the expectations of the customers with ease.
The second problem Pret is experiencing is the logistics problem emanating from the twin shop concept. The appropriate model for this issue is the value discipline. The model describes three generic disciplines which organizations can adhere to. These disciplines are operational excellence, product leadership, and customer intimacy (Birchall, Tovstiga, and Palgrave Connect, 2004, p. 43). The model proposes that the organization should choose one discipline and act upon it consistently and vigorously as the primary value principle (Ackerman, 2014, p. 34). What this will do is ensuring that company makes a firm decision on how to transport its sandwiches. Pret is also facing a training problem which has been matched with the strategic training of employee’s model. The model offers organizations a methodology to efficiently and effectively develop training and career-development goals so that they can be able to generate the maximum output having that there will always be a scarcity of resources (Wentland 2007, p. 6). Some of the practical considerations that the organization has to take when implementing this model is ensuring all training programs are based on the strategic objectives; managers should be more committed to training and strategies for employee motivation should be put in place (Jehanzeb, and Bashir 2013, p. 243-252). The structure of this model has three levels; a macro and micro-organization training level and the level of implementation, feedback, and evaluation (Wentland 2007).
The other problem facing Pret is the lack of motivation which can be solved using the Herzberg motivation hygiene-theory. According to Herzberg, (1964, p. 3-7) this theory holds that in the working environment, some factors add to job satisfaction while others lead to dissatisfaction. Through this theory, Pret can distinguish between motivators and hygiene factors where the former gives positive satisfaction and the latter do not contribute to job satisfaction however; when they are absent they are likely to lead to dissatisfaction (Herzberg, Snyderman, and Mausner 1966, p. 157). In this case of Pret, the organization should ensure that they remove any factors that contribute to the dissatisfaction of employees. Also, Pret has a problem on its global expansion plan whose solution can be derived from the Ansoff’s Matrix a strategic tool for planning that provides a framework assisting an organization’s management to develop strategies for future growth. There are four growth alternatives as explained below (Watts, Cope, and Hulme 1998, p. 101-111). First is market penetration where the firm aims at growing using existing products in existing markets which in other words is increasing market share in the current market environment. Secondly, market development, the firm uses existing offerings to expand to new markets while product development firms seek to develop new products for the same market. Finally, diversification is where a firm seeks to enter into new markets using existing products (Reed, and Luffman, 1986, p. 29-35).
Selecting an appropriate location for its shops is a significant concern for Pret. To solve this problem, it is recommended that the company should understand its marketing mix also known as Kotler’s 7ps of marketing. The primary P’s that the company should realize include the product, price, place, promotion, physical evidence, people, and process (Kotler 2000, p. 188-193). Selecting a location for a business is a marketing decision because the more it is situated in an appealing and accessible place, the more the business. For Pret, the marketing mix should provide a framework to make informed marketing decisions (Kotler, Keller, Ancarani, and Costabile 2014, p. 150-166). Related to the issue of location is cannibalization which is the reduction of revenue or sales because of crowding of businesses offering identical products. In this case, Pret suffers from its doings having that its shops are close to each other (Nijssen, Hillebrand, and Vermeulen 2005; Meredith, and Maki 2001, p. 1400-1409). The problem can be solved through benchmarking which is learning the best practices from the best in the industry. There are many forms of benchmarking, but in this case, the appropriate one is strategic benchmarking where the organization would get to learn more on avoiding cannibalization (Korpach, and Hutchison 1996, p. 49-53; Bendell, T., Boulter, and Kelly 1993). Directly related to this is the unfortunate spreading of Pret shops in London. The appropriate theory to resolve this is blue ocean strategy. The argument of this theory is that when organizations create ‘Blue Oceans’ they succeed opposed to ‘Red Ocean’s where competitors fight to achieve dominance (Kim, and Mauborgne 2005, p. 61). The analogy that Pret should understand from this theory is that an ocean with ferocious rivalry turns red in the blood (Kim, and Mauborgne, 2005, p. 1105-121).
The other problem facing Pret is hiring and recruitment which can be solved using the strategic human capital plan a method which seeks to align human capital strategies with the firm’s goals and vision (Ingham 2007, p. 1-7). The components of this plan include strategic direction, goals, objectives and the implementation plan (Kearns 2010, p. 207). Pret should develop such a project and ensure that hiring and recruitment strategies are aligned with it. The final problem is the twin concept which is a strategic plan for growth. Alternatives to this strategy can be explored using the growth-share matrix which helps in analyzing business units and consequently product lines. The product lines can be classified as either cash cows, dogs, question marks or stars (Hax, and Majluf 1983, p. 46-60). A representation of the same has been provided below.

Source: Reeves, Moose, and Venema (2014)
Proposed Solution to problem
Train Employees on Customer Service
Training employees on customer service would lead to more customer satisfaction. It is recommended that Pret should train all new employees and organize refresher training for all after every 6 months. The action plan is to improve customer satisfaction on the services provided.
Do Away With Shops without Kitchen
The logistics problem can be solved by doing away with the shops that do not have kitchen. In the first place, it inconveniences many employees. The recommendation is to find an alternative growth strategy. The action plan is to reduce unnecessary expenses.
New Training Program
The solution to the training problem is developing a new training program that accommodates the needs of the employee. It is recommended that the new program should be developed after consultations with all stakeholders. The action plan is having skilled and knowledgeable employees.
Have both Financial and Non-Financial Motivators
Both financial and non-financial motivators that is, monetary and non-monetary factors can solve the problem of poor motivation. It is recommended that Pret devise a fair rewarding strategy that treats all employees equally. The action plan is promote team work within the organization.
Explore the European Market
Venturing into the European market could solve the global expansion issue. It is recommended that Pret should expand in big cities around Europe. The action plan would be increase its global presence.
Expand In Other Cities around Europe
Spread across cities in Europe. The recommendation is to have Pret shops far apart. The action plan is tapping many customers as possible.
Identify Other Busy Streets in London to Open Shops
Implementing this would solve the problem of cannibalization. The recommendation is to benchmark while the action plan is to increase revenue.
Close Some Shops
Closing shops is the solution to the problem of having many shops near each other. It is recommended that these resources should be invested in other shops across Europe. The action plan is diversification of business.
Hire Based on Merit
Pret should hire employees based on how qualified they are. The company should have a functioning HR department. The action plan is to ensure skilled people are employed.
Seek an Alternative
The twin concept has proved to be against the company’s promise to the customer. Pret should seek another alternative for expansion. The action plan is to avoid future challenges.

5 Year Forecast and Action Plans
Based on the findings and analysis above, the table below provides a five year forecast for Pret.
Table 2 :5 Year Forecast
In £ millions 2017 2018 2019 2020 2021
Sales 800.65 845.54 867.9 900.67 980.98
EBITDA 99.8 108.9 113.4 124.8 138.9
Total Shops 492 512 534 567 597
Source: Author
The table above provides for a forecast of Pret’s sales, EBITDA and the total shops between the year 2017 and 2021. The vision of the company within these five years will be to increase its global presence. Pret will seek to increase the number of shops its owns by entering into new markets which have potential. The company will invest in a research and development unit that will be tasked to investigate probable markets that Pret can expand to. Priority will be given to the available markets in European countries and secondly regions in the United States. Some of the expected challenges will be culture problems as well as convincing shareholders the need to expand. The action plans mentioned above will be vital to the growth strategy. Some of the suggested action plans include promoting teamwork, employing skilled individuals, offer training programs and training on customer service. The control measure of the expansion plan will be the quarterly results. The objectives will be reviewed quarterly based on the business environment.

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APPENDICES
Appendix 1: Pret PESTLE Analysis
Political factors Economic factors
• Pressure from environmental groups.
• The government targets and tracks children with junk food. • The price of edible commodities.
• The expansion of the market is making it less dense.

Social factors Technological factors
• Obesity concerns
• Restaurants and fast food chain stores train their employees to be sellers
• Consumers are gaining knowledge on the source of the commodities they buy • People use mobile devices for health advice
• Development of printed food in certain businesses
• Through the internet people are getting access to past information which might seem to have been forgotten
• Introduction of lab-grown beef which is believed to be more healthier than regular beef
Legal factors Environmental factors
• There are strict regulations on food safety.
• Regulations on calories counts are shown during packaging. • Sustainable farming
• If the rate of water usage does not reduce, 40%of the world’s population will live in water by 2050 as reported. Due to the packaging of Pret’s food in plastics, this could be a future hygienic problem.

Appendix 2: Pret SWOT Analysis
Strengths Weaknesses
• Leading sandwich/coffee shop seller in Britain
• Ranked one of the best organizations in the UK.
• Pret operate in city centres with high capital costs.
• Pret have economies of scale.
• High number of customers who improve the company’s brand.
• Strong relationship with farmers. • Low switching costs within the market.
• Low switching costs for competitors and consumers.

Opportunities Threats
• Many organizations are training their employees to be sellers.
• Sustainable farming.
• Market expansion. • Other organizations are beginning to develop printed food.
• Many suppliers for pret.
• People turn to smartphones for health advice.

Appendix 3: Pret Competitive analysis
Threat of new entrants Bargaining power of buyers
• Operation of Pretin city centers with high capital costs
• Economies of scale
• Availability of routine customers.
• New entrants have to find a route to the market
• Low switching costs for competitors and buyers
• Large amounts of competitors in which the consumers can chose from
• Extremely high power of buyers
Competitive rivalry Threat of substitute products
• Low switching costs within the market
• Firms in this market are aggressive
• The number of large firm in Pret market is high • Low switching costs for consumers
• The Pret market has many competitors
• Competitors have high performance-to-cost ratio
Bargaining power of suppliers
• There are many suppliers available in the Pret industry.
• Pret food needs relative abundance production.
• Forward integration due to the strong relationship Pret has with its farmers.