Analysis of Pret a Manger

1. 0 INTRODUCTION

Pret A Manger is Britain’s most environmentally friendly food supplier and specializes in fresh sandwiches and drinks containing no chemicals. This report will be taking a look at internal and external factors the company positively and negatively. The report will include what they do well and not so well? What issues are affecting the company at present and in the future? In order to assess the company and possible future strategies it is necessary to conduct a SWOT analysis and PESTEL analysis.

What is SWOT and PESTEL analysis?

SWOT analysis is the strategic planning method used to the strength, weaknesses, opportunities and threats in a business. And on the other hand PESTEL analysis stands for political, economic, social, technological, environment and legal analysis and describe a framework of macro environmental used in the environmental scanning component of strategic management.

2. 0 SWOT ANALYSIS

2. 1. STRENGTHS

• Pret A Manger is Britain’s most environmentally friendly food supplier with Waitrose. This gives them an edge over their competitors, because people now care a lot about their health. Pret A Manger has extremely strong brand name and brand image in the United Kingdom. This means the company can operate in other countries with the right strategy in place.
• Pret A Manger invests a lot on it staff and the quality of its food. This help keeps the standard and quality of their products, and make their customers to be loyal.
• Pret A Manger shops are located at strategic position around the world, especially positions where the population is dense and consist of office workers and affluent people.
• Pret A Manger does not franchise.

This keeps their strong brand and quality of services provided by the company.

2. 2. WEAKNESSES

• Pret A Manger does not engage in mass media or direct marketing.

This surely has an effect on the company according to my small research, a lot of children, ages 25 below and immigrants in the United Kingdom do not know what Pret A Manger is all about, and prefer to eat at their competitors, because they have an idea of what they are likely to get due to adverts. Pret A Manger has to change their view on mass media and directing marketing. Compared to their competitors, Pret A Manger is not designed for a family treat. And their main targets are office workers and affluent consumers.

• Pret A Manger has a weakness global present apart from the United Kingdom.

2. 3. OPPORTUNITIES

* Globalization and integration process give Pret A Manger an excellent opportunities to penetrate into new markets. Pret is in three countries worldwide. They have opportunities of investing in some European countries without barrier, * Pret A Manger has opportunities to introduce new product, because they are known to specializing in sandwiches and drinks. The development of technology, this has been helping Pret A Manger to cut cost, and increase profit. Like, designing and manufacturing of latest coffee making machines, for outstanding coffee taste, saving time and human capital.

2. 4. THREATS

• Pret A Manger is in an environment where competition is very tense, so they have to keep improving the quality of their services and product.
• Petrol price hitting record high since 2008, with plans from the government to increase duty on petrol next year will affect both Pret A Manger and their customer. Pret A Manger is exposed to rises in the cost of coffee and dairy products.

3. 0 PEST ANALYSIS

3. 1. POLITICAL FACTORS

• Regional integration such as European Union which is now 27 countries and is likely to increase is a political aspect that affect business environment. Thus customers from part of these countries will have easy access to visit the United Kingdom and having a taste of Pret A Manger’s product. Also give opportunity to the company to do business in any of the European Union countries with ease. The reduction of interest rate to the lowest ever has helped Pret out of the recession and consumer confidence.
• With United Kingdom budget for 2010 out, the general election coming up and the country in serious debt, there is uncertainty what the future holds with politicians different set of policies. Already there are increases in duty of some products consumer can hardly do without. And also with plans to increase tax for debt recovery, customers’ confidence will be low spending their money due to uncertainty of the country’s future and will affect Pret whose target are office workers and affluent customers.

2. ECONOMIC FACTORS

• Price of petrol hitting the record high this year will affect both Pret A manger in the transportation of raw materials and its customers cutting back on spending.
• Stable oil price has created a stable business environment. Brent oil now trade at 85 US Dollars with an increase or decrease of 0. 5 approximately a day. This steady price will help Pret A Manger in forecasting top management decisions as long as other factors remain constant.
• The recent devaluation of Pound Sterling (? 1) against the US Dollar ($1. ) means, Pret spend more money trading globally, compared to when the Pound Sterling (? 1) much stronger than the US Dollar ($2). This will affect their annual profits or is likely to lead to unethical trading as they look for the cheapest sources to get their raw materials.

3. 3. SOCIAL FACTORS

* Pret A Manger claims their products are Fairtrade and Rainforest Alliance Certified, which encompasses ecosystem conservation, wildlife conservation, fair treatment and good conditions for workers, soil and water conservation, integrated pest management and integrated management of waste.

This shows social responsibility and ethical trading on their part, but was compromised last year when they import salmon from Chile when there were closer places like Norway and Scotland. Also had to change to tuna fish caught with by fishing vessels with pole and line, rather than purse seine fishing which causes wastage of rare species going extinct according to environmentalist. This means Pret care a lot about their environment. * Work mobility and working under pressure seems to force people to out to eat and drink rather than cook at home for themselves.

All though the recent credit crunch affect customers by making their own food or eat at a cheaper shop. But now that we are leaving the recession, customer will go back to their normal habit of eating out and increasing their sales * The diversity of the UK population showed the following, white 92. 1%. mixed race 1. 2%, Indian 1. 8%, Pakistan 1. 3%, Black Africans 1. 5%, Chinese 0. 4% etc. The diverse population has different taste and preferences which will affect the consumer base of Pret because they specialize on the narrow but profitable segment of the market, mostly sandwiches.

4. TECHNOLOGICAL FACTORS

• Technology has helped Pret A Manger to be more environmental friendly. The company uses electric vans for deliveries and wind energy for generating power.
• With smart phones been the in thing now, Pret can introduction an application on phones, where customers can order their fresh food at any point in time and also creating awareness to potential customers.
• Technology also helps to design and manufacture modern coffee making machines, saving time and human capital.
• The following is the summary of the conclusions reached in the SWOT and PEST analysis of Pret A Manger;

4. 0 CONCLUSION

• Pret A Manger is not doing enough in their marketing strategy to reach out to all classes of customers.
• Pret A Manger has a poor brand image globally compared to some of its competitors.
• Pret A Manger lacks strategy in expanding a strong brand image in the United Kingdom to other parts of the world. Based on the conclusions above, the following are my recommendations to Pret A Manger in reference to the SWOT and PEST analysis report carried out.

RECOMMENDATION

• First, Pret A Manger has to engage in mass media and direct marketing, and develop a marketing strategy that will create awareness globally like their competitors.
• Pret A Manger’s main market target is office workers, so they need more expansion in the strategic place globally to meet their target.
• Pret A Manger should have sandwiches for all class of customers rather than just targeting office workers and affluent customers.

6. 0 REFERENCES

• Kiran Stacey.Pret A Manger steps up US expansion plans, Financial Times. London (UK): September 8, 2009. Page 19 Marketing Week. London: August 2, 2007 page 24. Telegraph (2009) Investigation: How farm fishing boom in Chile threatens eco disaster. Available at http://www. telegraph. co. uk/news/worldnews/southamerica/chile/ 6426435 /Investigation-How-farm-fishing-boom-in-Chile-threatens-eco-disaster. html
• Telegraph (Oct. 2009). The truth about Pret’s ‘fresh’ fish – shipped 7,000 miles from Chile. Available at http://www. telegraph. co. k/foodanddrink/foodanddrinknews/6426170/The-truth-about-Prets-fresh-fish-shipped-7000-miles-from-Chile. html
• BBC (April 2010). Why has petrol gone up more than oil? Available at http://news. bbc. co. uk/1/hi/business/8610030. stm BBC (June 2009). Is it time to take tuna off the menu? http://news. bbc. co. uk/1/hi/magazine/8090277. stm
• Wikipedia (April 2010) Rainforest Alliance. Available at http://www. rainforest-alliance. org/ The National Bank of New Zealand, Solution Guide June 2004. Franchising your business: The Fundamentals. Page 4.