Coping Major Difficulties of Pret A Manger - Essay Example

?Pret Table of Contents Introduction 3 Impact of Demand and Supply Factor in Business Organisations 4 Problems for Pret A Manger 4 Strategies for Pret A Manger to Overcome the Problems 6 Conclusion 8 References 9 Introduction Pret A Manger began its business journey in the year 1986 in London. The company prepares and serves sandwiches in the business market by circumventing obscure preservatives, chemicals and additives. Though Pret A Manger is principally a private company, it does not have to face much difficulty in order to grow like a public based company. Currently, there lies the presence of 295 shops of the company in the world and the majority of them are located in the United Kingdom. The annual turnover of the company is approximately 380 million Pounds (Pret A Manger, 2012). The company formed 22 new stores or shops in the year 2011 and is likely to open more 20 to 30 stores in the year 2012. It does not possess any franchisee while performing its business operations. Moreover, the company bears a strong custom in order to develop its working personnel. In this context, it desires to invest profoundly towards the advancement of its employees by a considerable level (Pret A Manger, 2012). In the paper, a complete analysis about the various major difficulties faced by Pret A Manger that include particularly the supply as well as the demand issues will be taken into concern. Furthermore, few business strategies have been provided in order to assist the company to overcome the major problems related to supply and demand issues while performing its business operations. Impact of Demand and Supply Factor in Business Organisations The factors of supply along with demand are observed to be one of the most influential factors, which affect the business working as well as performance of any organisation. The aspect of demand is described as the willpower and the capability of the customers to buy a specific product and the notion of supply is defined as the capability of the business to deliver the various products to the customers according to their demand. In relation to the restaurant industry, the commencement of Great Recession imposed a severe as well as a sudden impact upon the business performances along with sales of the restaurants. In this regard, it has been observed that before the start of the Great Recession, the major factors that include easy financing and presence of market participants ultimately fuelled towards raising the number of new restaurants, which resulted in maximum supply which exceeded the demand (Petev & et. al., 2011). Problems for Pret A Manger One of the major problems, which had been faced by Pret A Manger in recent times, is about the investigation made over its frozen chicken, which the company used in its food labelling. It has been observed that the frozen chicken which was utilised by the company was actually shipped from Brazil. However, this aspect was not properly communicated through the labelling of the product. In response, the co-founder of the company, Pret A Manger named Julian Metcalfe stated that the sandwiches of his company are made with fresh products and the company always concentrates upon making the products with preservative free ingredients. He also added that unlike his business market competitors, his company makes sandwiches daily and they are never kept overnight. Thus, it can be stated that the company faced a major problem in relation to sustainability issue that has been recognised in its frozen chicken labelled fresh products (Telegraph Media Group Limited, 2012). The other significant issue that had been faced by Pret A Manager is about the complaint against one of its products i.e. tomato soup which contained huge quantity of salt that might lead towards the diseases of high blood pressure and hypertension. This particular issue has ultimately affected the commitment that has been made by the company in order to deliver fresh as well as natural food to its valued customers (Mail Online, 2012). Furthermore, the company might face supply related problems in the next three years that would hit the demand of the UK organic foods. It has been recognized that the eagerness for organic food in Britain is facing troubles by supply problems. Since the year 2002, the organic market of Britain is amounted to ?1.5 billion that has risen by 70 percent and is also anticipated to augment by the end of the year 2012 (Daily Record, 2008). Additionally, apart from the supply and demand factor, the company might also face the problem of sustainability in subsequent years due to growing concern of eating as well as living healthy in the communities amid the different customers by a large extent. The various issues that include the supply and demand along with the sustainability factors might result in substantial decrease of market share. Moreover, the future problems can also affect upon the business reputation and the performance of the company. Strategies for Pret A Manger to Overcome the Problems In order to cope up with the problems of sustainability and the supply of organic food, Pret A Manger should focus and pay utmost concern towards the sustainability issue in order to sustain its business reputation. The company should provide concern towards the Common Agricultural Policy by promoting especially the organic sector along with various other environment friendly related farming methods. In this regard, the objectives of the policy include delivering more financial sustainability through augmented competitiveness, extensive social sustainability through responding more towards the demand of the consumers and enhancing the factors of food quality as well as safety. By following this particular strategy, the company can solve the sustainability issues related to its various products i.e. frozen chicken and tomato soup among others by a large extent. In relation towards implementing the strategy of agricultural policy, the crucial benefits of organic farming include better soil protection, restriction upon the execution of pesticides in the products, positive impact upon animal welfare, nature protection and ultimately offering healthy as well as safe products to the customers (European Commission, 2004). Apart from initiating the strategy of agricultural policy in relation to the supply of organic food in order to cope up with the sustainability issue, the company should also adopt certain other effective strategies in order to maintain its market share along with attaining competitive position. In this context, Pret A Manger might follow the business expansion strategy of mergers and acquisitions (M&A) in order to maintain the productivity as well as the profitability of the company. It has been observed that this particular strategy of mergers and acquisitions is regarded to be one of the majorly utilised business growth tactics especially for the internationally operating companies worldwide. The company might feel the need of this strategy in order to expand its market share and to cope up with the situation of various sustainability issues. The main benefits of implementing the mergers and acquisitions business strategy include capability of generating high business value, attaining cost efficiency, augmenting market share and revenue, raising financial leverage and most importantly, sustaining in this competitive world of financial market (McDonald & et. al., 2005). Moreover, the company can also opt for the strategy of franchising which it does not prefer. The franchising business strategy may prove beneficial for the company. Thus, it can be stated that the merger and acquisition business strategy would be quite beneficial for Pret A Manger in order to cope up with the prevailing situations or to overcome its vulnerable position significantly. Conclusion Pret A Manger generates handmade delicious and natural food to its valued customers and evades any sort of chemicals and additives in its products. Principally, the company is a retail chain that makes and serves sandwiches to its customers. While making sandwiches, the company concentrates upon the facet of sustainability which has ultimately enabled it to commit sustained delivery of healthy lifestyle for its valued customers. However, the company has faced major difficulties associated with its products that include tomato soup and frozen chicken which have affected its business performance and reputation. In order to cope up with the crucial difficulties that the company faced, certain effective strategies have been prescribed for Pret A Manger. The strategies include implementing the agricultural policy of organic food products, concept of mergers and acquisitions along with the business tactic of franchising. It can be stated that by following the above mentioned strategies, the company can overcome the vulnerable situation by a considerable extent. References Daily Record, 2008. Supply Problems Hit UK Organic Food Demand. News. [Online] Available at: http://www.dailyrecord.co.uk/news/business-news/2008/01/25/supply-problems-hit-uk-organic-food-demand-86908-20297749/ [Accessed June 11, 2012]. European Commission, 2004. Introduction. European Action Plan for Organic Food and Farming Commission. [Online] Available at: http://ec.europa.eu/agriculture/organic/files/eu-policy/action-plan/working_doc_en.pdf [Accessed June 11, 2012]. Mail Online, 2012. The Alarming Truth About Your 'Fresh And Healthy' Pret A Manger Lunch. Femail. [Online] Available at: http://www.dailymail.co.uk/femail/article-1375525/Pret-A-Manger-The-alarming-truth-fresh-healthy-lunch.html [Accessed June 11, 2012]. McDonald, J. & et. al., 2005. Planning For A Successful Merger Or Acquisition: Lessons From An Australian Study. Journal of Global Business and Technology, Vol. 1, No. 2, pp.1-11. Petev, I. & et. al., 2011. The Macroeconomic Picture. Consumption And The Great Recession: An Analysis Of Trends, Perceptions, And Distributional Effects. [Online] Available at: http://www.stanford.edu/~pista/cons_recess_August_2011.pdf [Accessed June 11, 2012]. Pret A Manger, 2012. About Our Company. Introduction. [Online] Available at: http://www.pret.com/about/ [Accessed June 11, 2012]. Telegraph Media Group Limited, 2012. Food and Drink. Life. [Online] Available at: http://www.telegraph.co.uk/foodanddrink/foodanddrinknews/6520889/Pret-a-Manger-faces-inquiry-over-frozen-chicken-labelled-as-fresh.html [Accessed June 11, 2012]. Read More