Pret A Manger Harvard Case Solution & Analysis

Pret A Manger Case Solution

Pret A Manger is London’s chain of sandwich shops was known for its rapid, genuine service and prepackaged sandwiches prepared on site every day. Instructed to grow at a rate of 15 percent each year, Pret contemplated opening "twin" stores in places too small to feature kitchens; these shops would receive sandwich deliveries through the day from a nearby "parent" shop.

Would Pret's workers and customers take twin stores or view them as counter to the Pret culture? Through this choice stage, the case frames a dialogue about how businesses build service models to reliably provide customer service excellence. The case introduces a set of innovative employee management practices and also helps students extend the role of worker management systems in creating continuous service experiences.

Furthermore, the offerings of Pret not only include the sandwiches, but it also offers pastries, salads and coffee also. This makes the customers attracted more often because some diet conscious individuals generally go for a cup of coffee along with a salad bowl for lunch. Hence, it can be said that the product offerings are as per the needs and wants of the customers.

Furthermore, all the products that are available on the menu at Pret are prepared in the same kitchen which ensures timely delivery and freshness all the way. The major competitor for Pret has been EAT which has been quite far behind Pret because of its different business model.

In the end, it can be said that the product offerings are up to the mark, high quality and above the industry offerings. This has, therefore, made Pret one of the most successful chains in the country. The sales have also increased significantly because of the high quality maintained by each and every outlet of Pret A Manger.

Funding Mechanism:

The funding mechanism of Pret A Manger has been external. The company as stated in the case has been funded by different investors at different stages. For instance, in the initial part, McDonalds held most of the shares of the company. However, in 2008, McDonalds sold all of its Pret shares to European private equity firm Bridgepoint. The total amount paid by Pret was 345 million pounds transaction.

The major funding, therefore, comes through external funding. Thus, the major stake within Pret A Manger lies with the external stakeholders and the board of directors who actually become the decision maker for Pret A Manger.

The funding mechanism of the chain is the only negative aspect in the company because eventually the management changes and a different stakeholder come over to the company brings in new decisions.

Thus, this creates a lot of indecisiveness amongst the employees because they have to deal with the new management and actually mold themselves according to the needs and wants of the changed management.

Employee Management:

One of the most successful features at Pret A Manger has been the element of employee management. Ever since the start of its operations in 1986, the company has valued the human resource. All stores are handled by different management team that is selected by the in-house employees. This attribute has again been a key to the success of Pret.

pret a manger case solution

pret a manger case solution

Along with this, the element of employee empowerment has been quite visible at all stores. As stated in the case, managers at Pret consider themselves as mini entrepreneurs. The reason for this is simple, all new hiring are made with consent and vote of not only the management of the chain, but from the employees also because they have to become a part of the team.

Moreover, each and every new joinee becomes eligible for bonus, rewards and compensation based on extraordinary performance. Along with this, as the case indicates, all stores offer “Mystery Shoppers Program” which if handled with care and commitment ensures a bonus for the chain.

The managers are reliable for extra bonus because of their extra workload. Therefore, it can be considered that the management of Pret A Manger has been quite committed to offer high rewards to the top performances.

This has been a major success factor for the company because a motivated employee actually increases the sales, it enhances the element of customer satisfaction and eventually it leads to increased growth.

Customer Management:

Customer management at Pret A Manger has been different and unique as compared to the competitors in the market. For instance, at all other stores, similar menu and similar products actually make the customer wait in queue for 4 to 5 minutes each time. Moreover, the products that are delivered to the customers are sent to the sore after prepared in the kitchen elsewhere.

When compared with the customer management at other chains, Pret A Manger has been quite impressive in terms of its business ethics. The management of Pret does not make the customer wait at all. As the case states, Pret A Manger means ready to eat, not ready to wait.

The element of providing customers with quick service, high quality, fresh products and friendly employees or the staff has been one of the significant success factors and a method that has made the company stay successful and ahead of the rivals in the similar industry.

Along with this, in order to manage the customers with more conviction and friendliness, the management of the company has introduced the concept of “Mystery Shoppers”. These are the individuals who enter the chain randomly and based on their feedback, the management of Pret offers its customers bonus and rewards.

This has actually been a success factor for Pret because eventually this makes each and every employee, assistant manager, kitchen manager, store manager to stay on their toes and deliver each customer with utmost satisfaction because they never know who is the mystery shopper.

Finally, it can be said that the management of Pret has been quite successful in handling the customers and has ensured long term relationship with them because of the highly motivated staff that serves them all the way.

The attribute of customer satisfaction is regarded as one of the major success factors because eventually in service industry, dealing with customers and making them comfortable is one of the major tasks for the players.

Issues at Pret A Manger

In spite of being one of the most successful chains in the country, Pret A Manger has been facing quite a few issues. Ever since the management has been taken over by Bridgepoint, the target set by the board is to grow at 15 % annually. To actually achieve the target of growing at such rapid pace, the management has decided to change its business model.

From being a store that prepared everything in house or within the same chain has actually decided to revamp its business model. Now the management has decided to introduce the concept of twin stores.

Pret A Manger Case Study Solution

With the induction of this new concept, the sandwiches would be prepared at the kitchen and brought into the chain through a cart. This has been a major change in the business idea of the company.

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Ever since the start of its operations in the country, the unique selling proposition and the major success factor which has made Pret stay ahead of the competitors has been its store concept where all products are prepared within the same kitchen. However, since the new management has set rather difficult task therefore, the business model has also been reevaluated.

With the introduction of the new business model, things have actually changed and the success factor which was its major attribute has been diminishing. This has been the major issue at the Pret A Manger.

Since most of the customers have been actually consuming sandwiches, pastries, coffee offered by Pret as it prepares all its products in the same kitchen, therefore the customers actually trust the freshness, the quality and the taste of the products offered at Pret.

With the introduction of new concept, the company has actually been suffering. The sales have reduced. Employees no more feel empowered as they used to feel previously. As stated in the case, employees felt mini entrepreneurs because they had the decision making power.

On part of the customers, they were not informed about the transition in the business model which was negatively taken by the customers. From being one of the most well equipped stores which has been serving the customers through the same kitchen have to now wait extra time to have their order because of the changed business model.

The above discussed issues have been the major source of negative image being developed amongst the customers and the employees simultaneously.

Recommendations

“Just Made in this Shop’s Kitchen”

Based on the issues that have been presented in the case “Pret A Manger”, the recommendations for the new management shall be to first of all bring back the original business model. As the case states, the major success of Pret has been all the products made in the same kitchen.

However, ever since the management has introduced the concept of twin stores, the sales have declined, the element of customer retention has reduced and the employees have laps become less empowered.

Based on the above issues, the first recommendation for the company shall be to stay with its old model. By doing so, the company shall be able to sustain itself in the market and actually stay ahead of the competition.

Moreover, since the revised business model has not reaped in positive and reasonable profits, therefore, changing it shall be the ideal situation for the company. Along with this, the decline in sales would also be recovered because once the employees shall be empowered they shall start serving the needs of the customers with same motivation and dedication.

Finally, the recommendation to revert back to the in house production will reduce the delivery time; therefore it should make the store accountable for freshness, quality and customer satisfaction. Thus, it is recommended to overcome the issues faced by Pret, and as a result, it should focus on the older business model.

Pret A Manger in malls

The second recommended solution to the current problem faced by Pret shall be to open up its chain in different malls across the country. As the new management has a vision of growing at a rate of 15 % annually, therefore in order to achieve it, the management has introduced the concept of twin stores which has been an unsuccessful move.

Therefore, based on the results of the changed business model, the ideal situation for the management would be to in spite increasing at a rapid pace of 15% annually, it should increase sales at this pace.

In spite of opening up stores everywhere in the country, Pret should look to explore the opportunity of presenting itself in different malls. The reason for this recommendation is based on the fact that, once Pret is located in different, it would be able to gauge in more customers because of the regular visits of shoppers at stores.

This can be a less costly move; however it shall bring in more sales and revenues for the chain. Along with this, with the introduction of Pret in malls, it shall be giving direct competition to other fast food chains such as McDonalds and KFC.

Therefore, by following the above recommendations, the new management would be able to increase its sales and ultimately result in higher customer satisfaction. The option of growing at 15% annually is rather unrealistic as it would change the business model of Pret, which has been a long standing success attribute for the store.

This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE

PUBLICATION DATE: April 24, 2012 PRODUCT #: 612033-PDF-ENG

 

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