Pret A Manger

Global Expansion Strategy

Report

Pietro Bianchi: 14042970

Mohammed Miah: ID 14009722
Ghulam Mirza: ID14038620
1

THE COMPANY
Pret A Manger is a Uk based restaurant/coffee fast food chain founded by the entrepreneurial
friends Julian Metcalfe and Sinclair Beecham in 1986 (The Guardian, 2015).
As stated on its websites the company mission is to create handmade, natural food, avoiding
obscure chemicals, additives and preservatives common to so much of the prepared and fast food
on the market today (Pret A Manger, 2015).
Prets goal is to be a leading fast food retail company, selling fresh food made on the premises
from natural ingredients.
Pret is currently well established in the capital and is trying to explore international markets too.
During 2014 the company opened outlets in Paris and Shanghai, adding them to the existing
restaurants in Hong Kong, New York, Boston, Chicago and Washington DC (The Guardian, 2015).
The company is aiming to expand in the United States, Europe and Asia while always nurturing its
core UK business (Pret A Manger, 2014) aim of the company is also to maximise its two key
competitive advantages, Taste and freshness of the food and the professional delivery.
SALES AND SIZE
For the year ending on 1st January 2015, the company announced a 593.6 million turnover with an
increase in sales of +16% compared to the previous year leading to an EBITDA (earnings before
interests, tax, depreciation and amortisation) of 75.9 million, an increase of +14% compared to the
previous year.
With 33 new shops opened in 2014 Pret A Manger reached a total number of 374 shops
worldwide, 288 are in the UK, 60 in the USA, 14 in Hong Kong, 11 in France and one in China
(Pret A Manger, 2015), and a employee workforce of 8,875 employees: 6,910 located in the UK,
1,385 in the USA, 281 in Hong Kong, 269 in France and 30 in China.

According to the EU definition, Large Scale Enterprises (LSE) are firms with more than 250
employees (Hollensen, 2011, p.7) therefore Pret classifies as one, and being an LSE implicates
having hold of copious resources that can be internationalised but it has also a low flexibility when
planning and actuating a strategy.

REASONS TO INTERNATIONALISE.
Pret A Manger since its opening has proved an incredible ability to create an image of a company
with an anti-corporate ethos, adding sophisticated items its menu, managing a charity that gives
unsold food to the homeless ending up with revolutionising the lunchtime eating habits of millions
of workers (BDI, 2009).
This added to the offer of natural food that is enjoyable to eat, whilst providing the range of nutrition
needed for good health has made the company a staple format of fast food restaurant for
consumers on the go, looking for healthy food that is not widely expensive.

WHY FURTHER INTERNATIONALISE?

As seen above Pret is already present in USA, France, Hong Kong, China and looking at the
company sales figure worldwide we can see that the shops in the USA and France are performing
well in terms of turnover and profitability, then why the company should further move in other
countries? And what it will be the risk?
Looking at the proactive motives, or those stimuli to attempt strategy change, based on the firms
interest in exploiting unique competencies (Hollensen, 2011, p.50) that can push the company to
further increment its exports in other countries, we can outline:
The seek of profit and growth: even if Pret A Manger has registered a remarkable turnover in
2014 the fact that the company is now owned, for its majority, by a private equity firm could be a
good reason to press the accelerator on the expansion pedal, as investors are attracted by the
profitability of an international expansion.
Opportunities that foreign markets in Europe represent: stating to the Financial times the
Parisian stores have achieved Pret A Mangers highest average weekly sales in any city (2013)
considering this and the fact that most of the European Union such as Italy, Belgium, Switzerland
have similar eat-out trends. The Mintel Trend Big Issue discusses how consumers attitudes
towards weight are polarizing (2015) and, therefore, a fast food retail for consumers on the go is
needed.
Economies of scale: the increase of the number of shops will allow the company to obtain
better deals from food wholesalers, and transport companies. As we know from the BCG a
doubling in output units can reduce production costs up to 30%.
Uniqueness of the product/model offered by Pret A Manger: The company model and image
offered by Pret of a fast food retail that offers fresh and healthy food made on the premises, with
transparent and recycled packaging still has no serious competitors in the food industry, and this
could be a huge advantage in the internationalisation process. Moreover, the service offered by
Pret is not available by any other International competitor.
Reactive motives:
Competitive pressures: In recent years with the rising concerns about food health, consumers
worldwide seek fresh, natural and minimally processed foods (Nielsen, 2015) and more
companies have entered the market of healthy and transparent food or have adapted their image
in order to satisfy the consumers needs and requests. Therefore Pret position in its domestic
market, the Uk, has been undermined by companies such as: EAT a relatively new fast food
retailer that, like Pret A Manger, is aiming to to sell "real" food made on the premises (The
Guardian, 2012) or Starbucks that in September 2009 started to serve across Uk and Ireland
100% Fairtrade Certified coffee in all of their espresso-based beverages (Fairtrade Foundation,
2009) directly competing with Prets Organic Coffee line.
Proximity to international customers: Pret A Manger being a European based company has
the advantage of being close to countries with similar trends and behaviour, even though real or
perceived closeness is not assured.

THE NINE STRATEGIC WINDOWS

Following the nine strategic windows model (appendix 1) developed by Solberg in 1997, and
assuming that fast food retailing is a global industry, if we look at companies, even with different
characteristics, like McDonalds, Burger King and KFC, and looking at the firms ability to carry out
strategies in the international marketplace we can see that Pret falls into the Strengthen Your
Global position Box.
Even though a clarification must be made as the industry in which Pret A Manger is, yes is the fast
food retailing, but the variety and the quality of the products offered are different from a company
such as McDonalds or Burger King.The company will then fall between the Prepare for
Globalisation and the Strengthen your Global Position.
We then propose a hybrid strategy where the company aim is to consolidate its global position
while opening new stores in new markets.

INTERNATIONALISATIONS RISKS
Internationalise involves a certain amount of risks, in 2002 Pret A Manger in partnership with
McDonalds, at the time owner of a 33% stake in their business (The Telegraph, 2008) actuated a
strategy of expansion in Japan, opening 14 stores in one single operation, 18 months after
opening the first of 14 shops Pret closed down its last shop in April citing the departure of its
partner and backer McDonald's Japan as the main cause of the Tokyo retreat (Just Food,
2014).Other estimated causes of failure in the Japan expansion have been the rushed opening of
the stores in a too short time and the lack of market awareness.
Learning by mistakes is vital and when considering the initiation of international expansion the
company must be aware of the risks involved by:
- Insufficient knowledge of the market that they are entering;

- lack of foreign market connections;

- cost escalation due to distribution and financing expenditures.
GOING INTERNATIONAL, BUT HOW?
For the process of further Internationalisation of the company we rely on the model developed by
Swedish researchers from the University of Uppsala, known as the Stage Model (appendix 2), as
they noticed that companies appeared to begin their operations abroad in fairly nearby markets
and only gradually penetrated more far-flung markets (Hollensen, 2011, p. 74).
Looking at the Mode of Operation side and knowing that the core advantage of Pret A Manger is to
deliver to customers, fresh and healthy food made on the premises, entering a new market trough
exports would be unthinkable, Prets only way to enter a foreign market would be to open foreign
sales subsidiaries possibly with the help of joint ventures or strategic alliances. This step would be
a high commitment and high risk at the very start of the process, but it will be balanced by the
gradual entry in different markets, first focusing on countries with a low psychic distance, there the
company will see opportunities and there the perceived market uncertainty is low (Brewer,
2007).This strategy will help the company maintain a strong control over sales operations and
company culture while expanding at a slow pace avoiding risks.

COMPETITIVENESS Of THE COMPANY

To outline what are going to be the elements that will keep Pret A Manger competitive in the
International Market we need to take a closer look at the characteristics that made Pret such a
strong and profitable firm in its home market: the UK. This trough the help of the Porters Diamond
Model (appendix 3).
As seen above the Diamond provide us with four main factors that make a firm competitive:
Factor Conditions: such as constant research and innovation in the menu items field as stated
by the company that continue to adapt the food and drink range to meet the tastes and needs of
customers (Pret A Manger, 2015) and a strong focus on human resources reviewing people
policies regularly and investing in training and incentives.
Demand Conditions: Figures from retail analyst Nielsen evaluated the UK organic market at
1.24bn (2015) and stating to The Soil Association, in the UK, sales of organic products
increased by 4% in 2014 (2015)
Related and Supporting Industries: for business finding itself in a country with the largest
banking sector on a residency basis (Bank Of England, 2014) can be crucial when in need for
investments and loans or when consulting is needed for example to solve currency or location
problems.
Firm Structure and Industry: Increased competition from Costa, Greggs, Eat, Caffe Nero,
Starbucks and as competition becomes intense it increases the output of innovation more as
opposed to less competitive tension. The government also affects all the stated factors with
regards to legislation and EU involvement.
This kind of model, of course, has its limitations as the international competitiveness depends on
the conditions of the trading partners.

WICH MARKET SHOULD WE ENTER?

Identifying the right market to enter is important for multiple reasons as it can be a major
determinant of success or failure a specially at the beginning of the internationalisation process, a
matter of fact this decision will, therefore, influence the nature of foreign marketing programmes in
the selected countries. Moreover, the geographic location of the market selected will affect the
firms ability to coordinate future operations.
Being an LSE, Pret A Manger, can count on existing operation in different countries such as United
Kingdom, France, USA, Japan and China, and can exclude from the world some of the regions
where the company has already entered the market.
To narrow down the market in which enter we will proceed using a four steps model of International
Market Selection (IMS), we need to keep in mind that in real life the IMS process will not always
be a logical and gradual sequence of activities(Hollensen, 2011, p.262) it will be instead a
continuous process of feedback and strategy adaptation

Stage 1: the regional macro Screening

The three main regions assessed are Western Europe, Eastern Europe and the Middle East, the

grouping used is the one established by the United Nations Statistics Division. The criteria used for
the region assessment is listed below:

Geographic Location: the three regions selected contain countries clustered together, with
cultural and geographical similarities (e.g. Belgium and the Netherlands in western Europe or
Qatar and the United Arab Emirates in the Middle East)
Economy: aiming to satisfy middle class, emerging, professional customers, the Gross Domestic
Product of the regions has been used to evaluate the average economic performance and
standard of living of the regions. Displayed below a chart showing Average GDP per region as
stated by The World Bank (2015).

Stage 2: Preliminary coarse-grained screening trough the BERI index

To further reduce the number of markets we used the Business Environment Risk Index, with data
gathered from The Global Economy (2015), OECD (2015). This specific index helped us to assess
the critical political conditions in part of the Middle East and in countries of Eastern Europe, that
could represent a threat for future Operations of Pret A Manger. It must be mentioned that the data
used for the BERI analysis is from the year ending December 2014.
The results of the BERI analysis on the three regions highlighted Western Europe as the region
with better political and economic stability with a total BERI index of 70 against Eastern Europe, 58,
and the Middle East 50, (appendix 4,5,6)
Stage 3: Fine-Grained screening
Now that we are left with Austria, Belgium, France, Germany, Liechtenstein, Luxembourg, Monaco,
Netherlands and Switzerland we applied the market attractiveness/competitive strength matrix, on
the matrix we had to assess for every country two key factors:
Market attractiveness (market size, market growth, competitive intensity, economic and political
stability)
Competitive Strength (market share, product fit to market demands, product quality, access to
distribution channels)
It must be mentioned that most of the data has been hard to retrieve and that the screening has
not been applied to France since the company is already established in that market.

Matrix Results:
A countries: The countries that fall in this area are the primary markets that offer the best
opportunities for long-term strategic development (Hollensen, 2011,p.270), Belgium and
Netherlands share similar characteristics in terms of market size, like a high-density population;
according to Index Mundi, Belgium has a 363,6 persons/km2 density, compared to 407.3/km2 in
Netherlands (2011).
Both countries share a high rate of urbanisation (Belgium 97.5%, Netherlands 83.2%) along with a
high percentage of population between 25 to 54 years old which is a key factor since Pret is
targeting young emerging professionals that live/work in crowded areas
B countries and C countries: in these two areas are secondary markets with medium to high risk
of investment, and low attractiveness due to various factors such as a too high standard of living in
countries like Luxembourg, with a GDP per Capita of 116,664.3 US$ (The World Bank, 2015),
unattractive market size in Liechtenstein with a population of 37,290 (The World Bank, 2015) or the
incompatibility of the product line offered by Pret A Manger in certain countries such as the
Principality of Monaco.

Segmentation, Positioning and Targeting

To have a complete view of the environment that surrounds the company, a PESTEL (appendix
n2) analysis is given below.
Political
Netherlands - The Netherlands investment policy, where foreign companies are treated as
local companies in the eyes of the law, Also Netherlands has a low tax rate treaty in Europe
makes its environment more favorable and attractive (L Zeng, 2008).
Also, initiatives have been put forward by the government in which a business must show
the nutritional facts for each product sold. (Grunert and Wills, 2007).
Belgium The Belgian food sector has a 1.5% growth in turnover in 2013, at a recorded
EUR 48.2 billion, therefore giving Pret a favorable indication of the market potential
Economical
Netherlands Main Industrial activity is in food processing and electrical machinery. A
highly computerized agricultural sector which employs only 2% of the labor force but in
return it provides large surpluses for the food-processing industry.
Belgium During the recession, a lot of businesses were affected whereby revenues and
profits dropped considerably, expect for the fast food industry In Belgium showed an
increase of demand in that sector. (Economist, 2010)
Social
Netherlands & Belgium In the UK, Germany, Belgium and The Netherlands there has
been an increase in adopting alternative diets such as macrobiotics, veganism,
vegetarianism as a response to the recent environmental, animal welfare and food safety

issues. Also, adoption of low-fat diets has increased as part of a healthy diet in order to
reduce coronary heart disease risk. (Saba, 2001)

Technological
Netherlands They have a better logistical and technological infrastructure whereby a
business will work together with the government and knowledge based institutes to
strengthen the agricultural/food sector.
Belgium- Recent technological advances have led Belgium to incorporate, a digital
communication device that allows customers to see the latest promotions and reduces
queuing at tills. These self-serving counters also inform customers about new events taking
place within the business and the information transmitted from business to customer is
fresh whereby the information can be changed at any given time.
Legal
The legal implications that Pret faces in both Netherlands and Belgium markets are the
legal minimum wage, whereby Belgium has a $8.57 and Netherlands $8.2 as opposed to
UKs minimum wage standard $7.06 (Petroff, 2015)
Environmental
Netherlands High pollution has become highly densified due to population and economic
activities, companies, as well as households, are charged for polluting activities, for
example, the discharge of water waste into sewers and production of waste. These fees for
companies is accounted as environmental cost
Belgium Since 2007, Belgium has adopted the charges on plastic bags, a preventative
measure to ensure the increase and safety of the Belgian environment. They have created
an initiative of House of Food whereby the public is reconnected with food and the food
chain and familiarise themselves of how important the food industry is
Industry Analysis
Porters five forces framework
To better comprehend the competition level and the business strategy of Pret A Manger we are
going to use Porters five forces model.
Potential entrants: Since Netherlands and Belgium are both in the European Union, their
barriers of entry are low, according to Harbord and Hoehn (1994) making it an attractive market
to LSE like Pret a manger.
The intensity of rivalry among competitors: The fast food retail companies are in constant
competition to outdo each other, particularly in a growing market that the products are almost
homogenous and customers can switch easily.
Bargaining power of suppliers: The bargaining power of suppliers is defined as the extent to
which suppliers are able to exert influence and affect the firms profitability and general wellbeing (Pecotich et al., 1999).
With Netherlands commandeering 1240 food suppliers in the industry as a whole and not just
the niche aspects but also control to a certain extent of the quality of the ingredients (Porter, M.

(1998.), however, Belgium has only 832 suppliers therefore giving it less control over the quality
compared to Netherlands.
Threat of substitutes: cheap readymade food is a suitable substitute in both countries,
because of their ease of use and convenience and majority of the time they are cheaper and
can be afforded local supermarket as opposed to waiting at a healthy fast food retail

Micro-segmentation
The micro-segmentation in both countries will consist of geographical areas, Both Netherlands
and Belgium have a high concentrated percentage of urbanised areas. The highest
concentration of customers, out of the respective cities chosen will be Brussels and
Amsterdam.
The segmentation will be based on prolific background. Demographic, highly urbanised areas,
Income in both cities, we aim to provide for customers from A-C2 socio-economic grouping
and emerging professionals (18-35).
Targeting
To target Netherlands and Belgiums markets we suggest an undifferentiated strategy,
promoting Prets image of a healthier alternative to most of the fast food and coffee retailers
already present in the two markets, such as Subway and Starbucks aiming to attract
socially and environmentally conscious, middle-class customers.
Differentiation
if we analyse the factors that will help differentiate Prets operations into Netherlands and
Belgium following the Porters value chain analysis model we will enhance the primary
value activities that distinguish Pret A Manger from its main competitors in the two countries
such as:
Marketing and Sales: Zero advertising, with a focus on the in-store experience and focus on
the constantly changing menu, since 12% of Pret's 2014 sales generated from new
product development(Marketing Week, 2015).
Customer Service: focus on Pret A Manger distinctive identity

Competitive benchmarking profile

This could be taught and adapted by Pret to analyse their competitors within Belgium and
the Netherlands and use this towards their advantage as this gives the firm a useful tool to
approach their target markets and increase Pret A Mangers competitive advantage.
Positioning
In order to position Pret A Manger in Belgium and the Netherlands LCCP approach, (Local
consumer cultural positioning) is suggested as this is often used in food retailers, as the
food is given to one consumer and could vary to another type of menu, due to their culture.
As part of the report, we are expanding to Belgium. This is a country thats famous for their
Mussels. By using this, the company could be able to produce a dish within that country
relating to their national dish.
Netherlands most famous national dish is the raw herring the organization will be able to
adapt their dish and produce a dish that relates to their national food. E.g. a sandwich.

Value compelling proposition

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This is a value and belief from consumers that their values and experience will be delivered
within the organization. This is a business strategy that Pret could use to increase their
knowledge of the countries and gives an insight of the type of target market they will be
attracting.

Market Entry & Exit Strategy
The best option would be the Intermediate mode, this mode will allow shared control and risk,
whereby a partnership is formed. In specific, joint ventures should be formed, halving risks
while gaining market knowledge from the partnering company.
In today's global marketplace, it is vitally important that firms become adept at cultivating
beneficial collaborative ventures (Robson, M.J, Developing a pan-European co-marketing
alliance: the case of BP-Mobil, 1998)
Moreover, Pret A Manger will have access to it partners local knowledge, it will have significant
control over the operation and both parties will have the incentive to perform adequately.
Though on the other hand the disadvantages are as follows; lack of trust, conflict of interest and
neither partner has full control of the business.
Timing of Entry
For Pret the incremental entry is more of a practical solution, because it by definition allows a
firm to penetrate a market in another country through a slow step by step procedure, whereby a
company can test the water and if the company succeeds in a given time period it may then
want to exert its influence and market knowledge into other areas or a market that may share
similar characteristics as the market it is currently operating in.
Phillip Kotler states that the advantages of Incremental entry are that it enables a firm to gain
experience at a measured pace, requires the commitment of fewer resources and involves less
risk in terms of exposure (Kotler, P, page 567, 2013)
By first entering Belgium market which is closer to British Culture proved by the fact that UK is
Belgiums fourth-largest export market (Vaughan, G) it would allow to understand and adapt to
the current market climate but also give them an experience that they can use with regards to
their neighboring country, Netherlands.
Marketing Exit Strategies
Pret a Manger must decide on the best possible options when considering an exit strategy for
both countries would be when Pret has incurred sustained losses, failed to meet ethical
responsibilities or intense competition. Pret a Manger should adopt Tescos exit strategy in
Japan, by reducing their stores gradually, therefore eliminating any lost opportunity in that time
frame.

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APPENDIX
1) Nine strategic windows model (Hollensen, 2011)

2)

Uppsala Stage Model (Hollensen, 2011)

15

3) Porters Diamond Model, adaptation from (Hollensen, 2011)

3)

Beri Index charts for Western Europe

16

5) BERI index chart for the Middle East

17

6) BERI index chart for East Europe

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Pret A Manger
Global Expansion Strategy
Report

Pietro Bianchi: 14042970

Mohammed Miah: ID 14009722
Ghulam Mirza: ID14038620
1

THE COMPANY
Pret A Manger is a Uk based restaurant/coffee fast food chain founded by the entrepreneurial
friends Julian Metcalfe and Sinclair Beecham in 1986 (The Guardian, 2015).
As stated on its websites the company mission is to create handmade, natural food, avoiding
obscure chemicals, additives and preservatives common to so much of the prepared and fast food
on the market today (Pret A Manger, 2015).
Prets goal is to be a leading fast food retail company, selling fresh food made on the premises
from natural ingredients.
Pret is currently well established in the capital and is trying to explore international markets too.
During 2014 the company opened outlets in Paris and Shanghai, adding them to the existing
restaurants in Hong Kong, New York, Boston, Chicago and Washington DC (The Guardian, 2015).
The company is aiming to expand in the United States, Europe and Asia while always nurturing its
core UK business (Pret A Manger, 2014) aim of the company is also to maximise its two key
competitive advantages, Taste and freshness of the food and the professional delivery.
SALES AND SIZE
For the year ending on 1st January 2015, the company announced a 593.6 million turnover with an
increase in sales of +16% compared to the previous year leading to an EBITDA (earnings before
interests, tax, depreciation and amortisation) of 75.9 million, an increase of +14% compared to the
previous year.
With 33 new shops opened in 2014 Pret A Manger reached a total number of 374 shops
worldwide, 288 are in the UK, 60 in the USA, 14 in Hong Kong, 11 in France and one in China
(Pret A Manger, 2015), and a employee workforce of 8,875 employees: 6,910 located in the UK,
1,385 in the USA, 281 in Hong Kong, 269 in France and 30 in China.

According to the EU definition, Large Scale Enterprises (LSE) are firms with more than 250
employees (Hollensen, 2011, p.7) therefore Pret classifies as one, and being an LSE implicates
having hold of copious resources that can be internationalised but it has also a low flexibility when
planning and actuating a strategy.

REASONS TO INTERNATIONALISE.
Pret A Manger since its opening has proved an incredible ability to create an image of a company
with an anti-corporate ethos, adding sophisticated items its menu, managing a charity that gives
unsold food to the homeless ending up with revolutionising the lunchtime eating habits of millions
of workers (BDI, 2009).
This added to the offer of natural food that is enjoyable to eat, whilst providing the range of nutrition
needed for good health has made the company a staple format of fast food restaurant for
consumers on the go, looking for healthy food that is not widely expensive.

WHY FURTHER INTERNATIONALISE?

As seen above Pret is already present in USA, France, Hong Kong, China and looking at the
company sales figure worldwide we can see that the shops in the USA and France are performing
well in terms of turnover and profitability, then why the company should further move in other
countries? And what it will be the risk?
Looking at the proactive motives, or those stimuli to attempt strategy change, based on the firms
interest in exploiting unique competencies (Hollensen, 2011, p.50) that can push the company to
further increment its exports in other countries, we can outline:
The seek of profit and growth: even if Pret A Manger has registered a remarkable turnover in
2014 the fact that the company is now owned, for its majority, by a private equity firm could be a
good reason to press the accelerator on the expansion pedal, as investors are attracted by the
profitability of an international expansion.
Opportunities that foreign markets in Europe represent: stating to the Financial times the
Parisian stores have achieved Pret A Mangers highest average weekly sales in any city (2013)
considering this and the fact that most of the European Union such as Italy, Belgium, Switzerland
have similar eat-out trends. The Mintel Trend Big Issue discusses how consumers attitudes
towards weight are polarizing (2015) and, therefore, a fast food retail for consumers on the go is
needed.
Economies of scale: the increase of the number of shops will allow the company to obtain
better deals from food wholesalers, and transport companies. As we know from the BCG a
doubling in output units can reduce production costs up to 30%.
Uniqueness of the product/model offered by Pret A Manger: The company model and image
offered by Pret of a fast food retail that offers fresh and healthy food made on the premises, with
transparent and recycled packaging still has no serious competitors in the food industry, and this
could be a huge advantage in the internationalisation process. Moreover, the service offered by
Pret is not available by any other International competitor.
Reactive motives:
Competitive pressures: In recent years with the rising concerns about food health, consumers
worldwide seek fresh, natural and minimally processed foods (Nielsen, 2015) and more
companies have entered the market of healthy and transparent food or have adapted their image
in order to satisfy the consumers needs and requests. Therefore Pret position in its domestic
market, the Uk, has been undermined by companies such as: EAT a relatively new fast food
retailer that, like Pret A Manger, is aiming to to sell "real" food made on the premises (The
Guardian, 2012) or Starbucks that in September 2009 started to serve across Uk and Ireland
100% Fairtrade Certified coffee in all of their espresso-based beverages (Fairtrade Foundation,
2009) directly competing with Prets Organic Coffee line.
Proximity to international customers: Pret A Manger being a European based company has
the advantage of being close to countries with similar trends and behaviour, even though real or
perceived closeness is not assured.

THE NINE STRATEGIC WINDOWS

Following the nine strategic windows model (appendix 1) developed by Solberg in 1997, and
assuming that fast food retailing is a global industry, if we look at companies, even with different
characteristics, like McDonalds, Burger King and KFC, and looking at the firms ability to carry out
strategies in the international marketplace we can see that Pret falls into the Strengthen Your
Global position Box.
Even though a clarification must be made as the industry in which Pret A Manger is, yes is the fast
food retailing, but the variety and the quality of the products offered are different from a company
such as McDonalds or Burger King.The company will then fall between the Prepare for
Globalisation and the Strengthen your Global Position.
We then propose a hybrid strategy where the company aim is to consolidate its global position
while opening new stores in new markets.

INTERNATIONALISATIONS RISKS
Internationalise involves a certain amount of risks, in 2002 Pret A Manger in partnership with
McDonalds, at the time owner of a 33% stake in their business (The Telegraph, 2008) actuated a
strategy of expansion in Japan, opening 14 stores in one single operation, 18 months after
opening the first of 14 shops Pret closed down its last shop in April citing the departure of its
partner and backer McDonald's Japan as the main cause of the Tokyo retreat (Just Food,
2014).Other estimated causes of failure in the Japan expansion have been the rushed opening of
the stores in a too short time and the lack of market awareness.
Learning by mistakes is vital and when considering the initiation of international expansion the
company must be aware of the risks involved by:
- Insufficient knowledge of the market that they are entering;

- lack of foreign market connections;

- cost escalation due to distribution and financing expenditures.
GOING INTERNATIONAL, BUT HOW?
For the process of further Internationalisation of the company we rely on the model developed by
Swedish researchers from the University of Uppsala, known as the Stage Model (appendix 2), as
they noticed that companies appeared to begin their operations abroad in fairly nearby markets
and only gradually penetrated more far-flung markets (Hollensen, 2011, p. 74).
Looking at the Mode of Operation side and knowing that the core advantage of Pret A Manger is to
deliver to customers, fresh and healthy food made on the premises, entering a new market trough
exports would be unthinkable, Prets only way to enter a foreign market would be to open foreign
sales subsidiaries possibly with the help of joint ventures or strategic alliances. This step would be
a high commitment and high risk at the very start of the process, but it will be balanced by the
gradual entry in different markets, first focusing on countries with a low psychic distance, there the
company will see opportunities and there the perceived market uncertainty is low (Brewer,
2007).This strategy will help the company maintain a strong control over sales operations and
company culture while expanding at a slow pace avoiding risks.

COMPETITIVENESS Of THE COMPANY

To outline what are going to be the elements that will keep Pret A Manger competitive in the
International Market we need to take a closer look at the characteristics that made Pret such a
strong and profitable firm in its home market: the UK. This trough the help of the Porters Diamond
Model (appendix 3).
As seen above the Diamond provide us with four main factors that make a firm competitive:
Factor Conditions: such as constant research and innovation in the menu items field as stated
by the company that continue to adapt the food and drink range to meet the tastes and needs of
customers (Pret A Manger, 2015) and a strong focus on human resources reviewing people
policies regularly and investing in training and incentives.
Demand Conditions: Figures from retail analyst Nielsen evaluated the UK organic market at
1.24bn (2015) and stating to The Soil Association, in the UK, sales of organic products
increased by 4% in 2014 (2015)
Related and Supporting Industries: for business finding itself in a country with the largest
banking sector on a residency basis (Bank Of England, 2014) can be crucial when in need for
investments and loans or when consulting is needed for example to solve currency or location
problems.
Firm Structure and Industry: Increased competition from Costa, Greggs, Eat, Caffe Nero,
Starbucks and as competition becomes intense it increases the output of innovation more as
opposed to less competitive tension. The government also affects all the stated factors with
regards to legislation and EU involvement.
This kind of model, of course, has its limitations as the international competitiveness depends on
the conditions of the trading partners.

WICH MARKET SHOULD WE ENTER?

Identifying the right market to enter is important for multiple reasons as it can be a major
determinant of success or failure a specially at the beginning of the internationalisation process, a
matter of fact this decision will, therefore, influence the nature of foreign marketing programmes in
the selected countries. Moreover, the geographic location of the market selected will affect the
firms ability to coordinate future operations.
Being an LSE, Pret A Manger, can count on existing operation in different countries such as United
Kingdom, France, USA, Japan and China, and can exclude from the world some of the regions
where the company has already entered the market.
To narrow down the market in which enter we will proceed using a four steps model of International
Market Selection (IMS), we need to keep in mind that in real life the IMS process will not always
be a logical and gradual sequence of activities(Hollensen, 2011, p.262) it will be instead a
continuous process of feedback and strategy adaptation

Stage 1: the regional macro Screening

The three main regions assessed are Western Europe, Eastern Europe and the Middle East, the

grouping used is the one established by the United Nations Statistics Division. The criteria used for
the region assessment is listed below:

Geographic Location: the three regions selected contain countries clustered together, with
cultural and geographical similarities (e.g. Belgium and the Netherlands in western Europe or
Qatar and the United Arab Emirates in the Middle East)
Economy: aiming to satisfy middle class, emerging, professional customers, the Gross Domestic
Product of the regions has been used to evaluate the average economic performance and
standard of living of the regions. Displayed below a chart showing Average GDP per region as
stated by The World Bank (2015).

Stage 2: Preliminary coarse-grained screening trough the BERI index

To further reduce the number of markets we used the Business Environment Risk Index, with data
gathered from The Global Economy (2015), OECD (2015). This specific index helped us to assess
the critical political conditions in part of the Middle East and in countries of Eastern Europe, that
could represent a threat for future Operations of Pret A Manger. It must be mentioned that the data
used for the BERI analysis is from the year ending December 2014.
The results of the BERI analysis on the three regions highlighted Western Europe as the region
with better political and economic stability with a total BERI index of 70 against Eastern Europe, 58,
and the Middle East 50, (appendix 4,5,6)
Stage 3: Fine-Grained screening
Now that we are left with Austria, Belgium, France, Germany, Liechtenstein, Luxembourg, Monaco,
Netherlands and Switzerland we applied the market attractiveness/competitive strength matrix, on
the matrix we had to assess for every country two key factors:
Market attractiveness (market size, market growth, competitive intensity, economic and political
stability)
Competitive Strength (market share, product fit to market demands, product quality, access to
distribution channels)
It must be mentioned that most of the data has been hard to retrieve and that the screening has
not been applied to France since the company is already established in that market.

Matrix Results:
A countries: The countries that fall in this area are the primary markets that offer the best
opportunities for long-term strategic development (Hollensen, 2011,p.270), Belgium and
Netherlands share similar characteristics in terms of market size, like a high-density population;
according to Index Mundi, Belgium has a 363,6 persons/km2 density, compared to 407.3/km2 in
Netherlands (2011).
Both countries share a high rate of urbanisation (Belgium 97.5%, Netherlands 83.2%) along with a
high percentage of population between 25 to 54 years old which is a key factor since Pret is
targeting young emerging professionals that live/work in crowded areas
B countries and C countries: in these two areas are secondary markets with medium to high risk
of investment, and low attractiveness due to various factors such as a too high standard of living in
countries like Luxembourg, with a GDP per Capita of 116,664.3 US$ (The World Bank, 2015),
unattractive market size in Liechtenstein with a population of 37,290 (The World Bank, 2015) or the
incompatibility of the product line offered by Pret A Manger in certain countries such as the
Principality of Monaco.

Segmentation, Positioning and Targeting

To have a complete view of the environment that surrounds the company, a PESTEL (appendix
n2) analysis is given below.
Political
Netherlands - The Netherlands investment policy, where foreign companies are treated as
local companies in the eyes of the law, Also Netherlands has a low tax rate treaty in Europe
makes its environment more favorable and attractive (L Zeng, 2008).
Also, initiatives have been put forward by the government in which a business must show
the nutritional facts for each product sold. (Grunert and Wills, 2007).
Belgium The Belgian food sector has a 1.5% growth in turnover in 2013, at a recorded
EUR 48.2 billion, therefore giving Pret a favorable indication of the market potential
Economical
Netherlands Main Industrial activity is in food processing and electrical machinery. A
highly computerized agricultural sector which employs only 2% of the labor force but in
return it provides large surpluses for the food-processing industry.
Belgium During the recession, a lot of businesses were affected whereby revenues and
profits dropped considerably, expect for the fast food industry In Belgium showed an
increase of demand in that sector. (Economist, 2010)
Social
Netherlands & Belgium In the UK, Germany, Belgium and The Netherlands there has
been an increase in adopting alternative diets such as macrobiotics, veganism,
vegetarianism as a response to the recent environmental, animal welfare and food safety

issues. Also, adoption of low-fat diets has increased as part of a healthy diet in order to
reduce coronary heart disease risk. (Saba, 2001)

Technological
Netherlands They have a better logistical and technological infrastructure whereby a
business will work together with the government and knowledge based institutes to
strengthen the agricultural/food sector.
Belgium- Recent technological advances have led Belgium to incorporate, a digital
communication device that allows customers to see the latest promotions and reduces
queuing at tills. These self-serving counters also inform customers about new events taking
place within the business and the information transmitted from business to customer is
fresh whereby the information can be changed at any given time.
Legal
The legal implications that Pret faces in both Netherlands and Belgium markets are the
legal minimum wage, whereby Belgium has a $8.57 and Netherlands $8.2 as opposed to
UKs minimum wage standard $7.06 (Petroff, 2015)
Environmental
Netherlands High pollution has become highly densified due to population and economic
activities, companies, as well as households, are charged for polluting activities, for
example, the discharge of water waste into sewers and production of waste. These fees for
companies is accounted as environmental cost
Belgium Since 2007, Belgium has adopted the charges on plastic bags, a preventative
measure to ensure the increase and safety of the Belgian environment. They have created
an initiative of House of Food whereby the public is reconnected with food and the food
chain and familiarise themselves of how important the food industry is
Industry Analysis
Porters five forces framework
To better comprehend the competition level and the business strategy of Pret A Manger we are
going to use Porters five forces model.
Potential entrants: Since Netherlands and Belgium are both in the European Union, their
barriers of entry are low, according to Harbord and Hoehn (1994) making it an attractive market
to LSE like Pret a manger.
The intensity of rivalry among competitors: The fast food retail companies are in constant
competition to outdo each other, particularly in a growing market that the products are almost
homogenous and customers can switch easily.
Bargaining power of suppliers: The bargaining power of suppliers is defined as the extent to
which suppliers are able to exert influence and affect the firms profitability and general wellbeing (Pecotich et al., 1999).
With Netherlands commandeering 1240 food suppliers in the industry as a whole and not just
the niche aspects but also control to a certain extent of the quality of the ingredients (Porter, M.

(1998.), however, Belgium has only 832 suppliers therefore giving it less control over the quality
compared to Netherlands.
Threat of substitutes: cheap readymade food is a suitable substitute in both countries,
because of their ease of use and convenience and majority of the time they are cheaper and
can be afforded local supermarket as opposed to waiting at a healthy fast food retail

Micro-segmentation
The micro-segmentation in both countries will consist of geographical areas, Both Netherlands
and Belgium have a high concentrated percentage of urbanised areas. The highest
concentration of customers, out of the respective cities chosen will be Brussels and
Amsterdam.
The segmentation will be based on prolific background. Demographic, highly urbanised areas,
Income in both cities, we aim to provide for customers from A-C2 socio-economic grouping
and emerging professionals (18-35).
Targeting
To target Netherlands and Belgiums markets we suggest an undifferentiated strategy,
promoting Prets image of a healthier alternative to most of the fast food and coffee retailers
already present in the two markets, such as Subway and Starbucks aiming to attract
socially and environmentally conscious, middle-class customers.
Differentiation
if we analyse the factors that will help differentiate Prets operations into Netherlands and
Belgium following the Porters value chain analysis model we will enhance the primary
value activities that distinguish Pret A Manger from its main competitors in the two countries
such as:
Marketing and Sales: Zero advertising, with a focus on the in-store experience and focus on
the constantly changing menu, since 12% of Pret's 2014 sales generated from new
product development(Marketing Week, 2015).
Customer Service: focus on Pret A Manger distinctive identity

Competitive benchmarking profile

This could be taught and adapted by Pret to analyse their competitors within Belgium and
the Netherlands and use this towards their advantage as this gives the firm a useful tool to
approach their target markets and increase Pret A Mangers competitive advantage.
Positioning
In order to position Pret A Manger in Belgium and the Netherlands LCCP approach, (Local
consumer cultural positioning) is suggested as this is often used in food retailers, as the
food is given to one consumer and could vary to another type of menu, due to their culture.
As part of the report, we are expanding to Belgium. This is a country thats famous for their
Mussels. By using this, the company could be able to produce a dish within that country
relating to their national dish.
Netherlands most famous national dish is the raw herring the organization will be able to
adapt their dish and produce a dish that relates to their national food. E.g. a sandwich.

Value compelling proposition

10

This is a value and belief from consumers that their values and experience will be delivered
within the organization. This is a business strategy that Pret could use to increase their
knowledge of the countries and gives an insight of the type of target market they will be
attracting.

Market Entry & Exit Strategy
The best option would be the Intermediate mode, this mode will allow shared control and risk,
whereby a partnership is formed. In specific, joint ventures should be formed, halving risks
while gaining market knowledge from the partnering company.
In today's global marketplace, it is vitally important that firms become adept at cultivating
beneficial collaborative ventures (Robson, M.J, Developing a pan-European co-marketing
alliance: the case of BP-Mobil, 1998)
Moreover, Pret A Manger will have access to it partners local knowledge, it will have significant
control over the operation and both parties will have the incentive to perform adequately.
Though on the other hand the disadvantages are as follows; lack of trust, conflict of interest and
neither partner has full control of the business.
Timing of Entry
For Pret the incremental entry is more of a practical solution, because it by definition allows a
firm to penetrate a market in another country through a slow step by step procedure, whereby a
company can test the water and if the company succeeds in a given time period it may then
want to exert its influence and market knowledge into other areas or a market that may share
similar characteristics as the market it is currently operating in.
Phillip Kotler states that the advantages of Incremental entry are that it enables a firm to gain
experience at a measured pace, requires the commitment of fewer resources and involves less
risk in terms of exposure (Kotler, P, page 567, 2013)
By first entering Belgium market which is closer to British Culture proved by the fact that UK is
Belgiums fourth-largest export market (Vaughan, G) it would allow to understand and adapt to
the current market climate but also give them an experience that they can use with regards to
their neighboring country, Netherlands.
Marketing Exit Strategies
Pret a Manger must decide on the best possible options when considering an exit strategy for
both countries would be when Pret has incurred sustained losses, failed to meet ethical
responsibilities or intense competition. Pret a Manger should adopt Tescos exit strategy in
Japan, by reducing their stores gradually, therefore eliminating any lost opportunity in that time
frame.

11

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14

APPENDIX
1) Nine strategic windows model (Hollensen, 2011)

2)

Uppsala Stage Model (Hollensen, 2011)

15

3) Porters Diamond Model, adaptation from (Hollensen, 2011)

3)

Beri Index charts for Western Europe

16

5) BERI index chart for the Middle East

17

6) BERI index chart for East Europe

18

The Company

UK based fast food chain

593.6 million turnover for the year 2014
374 shops worldwide
8,875 employees

create handmade, natural food, avoiding obscure chemicals, addi5ves and

preserva5ves common to so much of the prepared and fast food on the,
market today (Pret A Manger, 2015).

Pret A Manger in the world

France

Hong Kong

11 Shops

14 Shops

UK

USA

60 Shops

288 Shops

China

1 Shops

Source: UN StaZsZc Division(2015)

Why further internaZonalise?

The seek of prot and growth: pressure from the
investors
European market opportuni>es: the Parisian
stores have achieved Pret A Mangers highest
average weekly sales in any city (Robinson, 2013)
Economies of scale
Uniqueness of Pret A Manger

Why further internaZonalise?

Compe>>ve pressure: (e.g. Eat business
model, Starbucks Fair-Trade
cerZcaZon)
Proximity to interna>onal customers

The nine strategic windows model

(Hollensen, 2011, p.18)

Going internaZonal. But how?

No exports
Open subsidiaries (Joint
ventures/strategic
alliances)

Ini>al high risk

balanced by the low psychic
distance
(Hollensen, 2011, p75)

What will keep the company compe>>ve in the foreign markets?

Factor condiZons

Constant research and

innova>on in the menu
items
Related & SupporZng Industries

Demand condiZons

the largest banking

sector on a residency
basis (Bank Of England,
2014)

Sales of organic products

increased by 4% in 2014
(The Soil Associa>on,2015)

Increased compe>>on
from Costa, Greggs, Eat,
Cae Nero, Starbucks
Firm Strategy/Structure/ Rivalry
Adapted from (Harvard Business School, 2012)

What
market should we
enter?

Regional macro- screening

Economy
Geographic LocaZon

Source UN StaZsZc Division ()

Data source: (World Bank, 2015)

Preliminary coarse-grained screening trough the

BERI index

Data source The Global Economy (2015), OECD (2015)

 Fine Grained screening

Western Europe

Austria
Belgium
Germany
France
Liechtenstein
Monaco
Switzerland
Luxembourg
Netherlands

UN Sta5s5cs Division (2015)

Market a^rac>veness
(market size, market growth,
compeZZve intensity,
economic and poliZcal
stability)
Compe>>ve Strength (market
share, product t to market
demands, product quality,
access to distribuZon
channels)

Market a^rac>veness/compe>>ve strength matrix

Adapted from Hollensen (2011)

Market a^rac>veness/compe>>ve strength matrix

Results

A Countries (primary markets):

Belgium and Netherlands share
similar characterisZcs in terms of
market size:

High density of populaZon
High rate of urbanizaZon
High percentage of populaZon
between 25 to 54 years old

B countries and C countries (secondary

markets)

High standard of living e.g.
Luxembourg, GDP per Capita of
116,664.3 US$ (The World Bank,
2015),
UnahracZve market size in
Liechtenstein with a populaZon of
37,290 (The World Bank, 2015)
IncompaZbility of the product line
oered by Pret A Manger (e.g
Monaco)

Industry Analysis
PoliZcal

Economical

Environmental

P.E.S.T.L.E

Social

Legal

Technological

Industry Analysis
Government
Policy

Threats of
New
Entrants

Large Number of
Suppliers

Bargaining
power of
Suppliers

Rivalry
amongst
compeZtors

Threats of
subsZtutes

Bargaining
power of
buyers

Homogenous
Products

Ready made
food

Micro-segmentaZon
The subdividing of a market into
disZnct and increasingly homogenous
sub-groups of customers (Kotler, 1999)
Behavioural
Customer wanZng
value for money

Psychographic
Healthy Lifestyle
Prefer to buy
organic food

Demographic
Both Male/Female
Young Professionals
A-C2 Socio
Economic

Geographic
Urban Areas
Brussels (Belgium)
and Amsterdam
(Netherlands)

DierenZaZon (Value chain analysis)

Adapted from: King Suade University

(2016)

DierenZaZon
Compe>>ve benchmarking prole

Useful tool to use towards their advanatge.

Pret would need to adapt and analyse their compeZtors
within Belgium and Netherlands.

This helps increases their compeZtve advantage.

PosiZoning

Local consumer compeZZve posiZon (LCCP)- Olen used in food

retailers

As were expanding we need to adapt their culture of food.

Belguim- Mussels

Netherlands- Raw herring

Value compelling proposi>on

These are values, that consumers believe will be experiencing

within the organizaZon.

Business strategy
Insight within the companys target market

Market entry
Intermediate model
Allows partnership being formed despite risk
and control involved
Many risks involved
Partnership breakdown

Market Entry Strategy

Hierarchical
Mode

Intermediate
mode

Export mode

Shared control and risk

Split ownership

Joint Venture

Stages of Joint Venture

1. Joint Venture ObjecZves
Cost/Benet Analysis
Partner SelecZon
Business Plan Development
Joint-venture Agreement
Contract wriZng
Performance EvaluaZon

Exit Strategy

Reasons to leave
Incurred sustained losses.
failed to meet ethical responsibiliZes.
intense compeZZon.

References
Robinson, D. (2013). Pret A Manger to speed up expansion. Financial Times. [online] Available at:
hhp://www.l.com/cms/s/0/22b8c9b6-ab47-11e2-ac71-00144feabdc0.html#axzz3xYCs7PVr
[Accessed 4 Dec. 2015].

King Suad University. (2016). Value chain analysis graph (2016). [Online] available from:
hhp://fac.ksu.edu.sa/halankari/announcement/26641
Accessed: 17th of January 2016

New plant. (2015). Belgian Beer Mussels with Garlic & Ginger (2015). [Online] Available from:
hhp://www.newplanetbeer.com/2013/05/belgian-beer-mussels-with-garlic-ginger/?ao_conrm
Accessed: 17th of January 2016

Pret A Manger, (2015) Financial Results 2014 [Online] Available from:
hhps://www.pret.co.uk/en-gb/nancial-results-2014

UN sta>s>cs division (2015). UN staZsZcs division (2015)
[Online] Available from:
hhp://unstats.un.org/unsd/default.htm
[accessed 8th of January 2016]

Hollensen, S. (2004). Global markeZng. Harlow, England: Financial Times.


Bank of England, (2016). Why is the UK banking system so big and is that a problem?. [online]
Available at: hhp://www.bankofengland.co.uk/publicaZons/Documents/quarterlybulleZn/2014/
qb14q402.pdf [Accessed 18 Jan. 2016].

References

Harvard Business School, (2016). The Diamond Model - InsZtute For Strategy And CompeZZveness -
Harvard Business School. [online] Available at: hhp://www.isc.hbs.edu/compeZZveness-economicdevelopment/frameworks-and-key-concepts/pages/the-diamond-model.aspx [Accessed 2 Jan.
2016].

World Bank (2016). GDP per capita (current US$) | Data | Table. [online] Available at: hhp://
data.worldbank.org/indicator/NY.GDP.PCAP.CD [Accessed 17 Jan. 2016].

Global Economy (2015). The global economy (2015)
[Online] Available from:
hhp://www.theglobaleconomy.com/
[Accessed 7th of January 2016]

OECD (2015). Unit labour costs and labour producZvity (employment based), total economy.
[Online] Available from:
hhps://stats.oecd.org/Index.aspx?DataSetCode=ULC_EEQ
[accessed 9th of January 2016]

Soil Associa>on (2015). Organic market shows improved growth amidst tumbling food prices (2015)
[Online] Available from:
hhp://www.soilassociaZon.org/news/newsstory/arZcleid/7805/organic-market-shows-improvedgrowth-amidst-tumbling-food-prices
[accessed 5th of January 2016]

The Company

UK based fast food chain

593.6 million turnover for the year 2014
374 shops worldwide
8,875 employees

create handmade, natural food, avoiding obscure chemicals, addi5ves and

preserva5ves common to so much of the prepared and fast food on the,
market today (Pret A Manger, 2015).

Pret A Manger in the world

France

Hong Kong

11 Shops

14 Shops

UK

USA

60 Shops

288 Shops

China

1 Shops

Source: UN StaZsZc Division(2015)

Why further internaZonalise?

The seek of prot and growth: pressure from the
investors
European market opportuni>es: the Parisian
stores have achieved Pret A Mangers highest
average weekly sales in any city (Robinson, 2013)
Economies of scale
Uniqueness of Pret A Manger

Why further internaZonalise?

Compe>>ve pressure: (e.g. Eat business
model, Starbucks Fair-Trade
cerZcaZon)
Proximity to interna>onal customers

The nine strategic windows model

(Hollensen, 2011, p.18)

Going internaZonal. But how?

No exports
Open subsidiaries (Joint
ventures/strategic
alliances)

Ini>al high risk

balanced by the low psychic
distance
(Hollensen, 2011, p75)

What will keep the company compe>>ve in the foreign markets?

Factor condiZons

Constant research and

innova>on in the menu
items
Related & SupporZng Industries

Demand condiZons

the largest banking

sector on a residency
basis (Bank Of England,
2014)

Sales of organic products

increased by 4% in 2014
(The Soil Associa>on,2015)

Increased compe>>on
from Costa, Greggs, Eat,
Cae Nero, Starbucks
Firm Strategy/Structure/ Rivalry
Adapted from (Harvard Business School, 2012)

What
market should we
enter?

Regional macro- screening

Economy
Geographic LocaZon

Source UN StaZsZc Division ()

Data source: (World Bank, 2015)

Preliminary coarse-grained screening trough the

BERI index

Data source The Global Economy (2015), OECD (2015)

 Fine Grained screening

Western Europe

Austria
Belgium
Germany
France
Liechtenstein
Monaco
Switzerland
Luxembourg
Netherlands

UN Sta5s5cs Division (2015)

Market a^rac>veness
(market size, market growth,
compeZZve intensity,
economic and poliZcal
stability)
Compe>>ve Strength (market
share, product t to market
demands, product quality,
access to distribuZon
channels)

Market a^rac>veness/compe>>ve strength matrix

Adapted from Hollensen (2011)

Market a^rac>veness/compe>>ve strength matrix

Results

A Countries (primary markets):

Belgium and Netherlands share
similar characterisZcs in terms of
market size:

High density of populaZon
High rate of urbanizaZon
High percentage of populaZon
between 25 to 54 years old

B countries and C countries (secondary

markets)

High standard of living e.g.
Luxembourg, GDP per Capita of
116,664.3 US$ (The World Bank,
2015),
UnahracZve market size in
Liechtenstein with a populaZon of
37,290 (The World Bank, 2015)
IncompaZbility of the product line
oered by Pret A Manger (e.g
Monaco)

Industry Analysis
PoliZcal

Economical

Environmental

P.E.S.T.L.E

Social

Legal

Technological

Industry Analysis
Government
Policy

Threats of
New
Entrants

Large Number of
Suppliers

Bargaining
power of
Suppliers

Rivalry
amongst
compeZtors

Threats of
subsZtutes

Bargaining
power of
buyers

Homogenous
Products

Ready made
food

Micro-segmentaZon
The subdividing of a market into
disZnct and increasingly homogenous
sub-groups of customers (Kotler, 1999)
Behavioural
Customer wanZng
value for money

Demographic
Psychographic

Both Male/Female

Healthy Lifestyle

Young Professionals

Prefer to buy
organic food

A-C2 Socio
Economic

Geographic
Urban Areas
Brussels (Belgium)
and Amsterdam
(Netherlands)

DierenZaZon (Value chain analysis)

Adapted from: King Suade University

(2016)

DierenZaZon
Compe>>ve benchmarking prole

Useful tool to use towards their advanatge.

Pret would need to adapt and analyse their compeZtors
within Belgium and Netherlands.

This helps increases their compeZtve advantage.

PosiZoning

Local consumer compeZZve posiZon (LCCP)- Olen used in food

retailers

As were expanding we need to adapt their culture of food.

Belguim- Mussels

Netherlands- Raw herring

Value compelling proposi>on

These are values, that consumers believe will be experiencing

within the organizaZon.

Business strategy
Insight within the companys target market

Market entry
Intermediate model
Allows partnership being formed despite risk
and control involved
Many risks involved
Partnership breakdown

Market Entry Strategy

Hierarchical
Mode

Intermediate
mode

Export mode

Shared control and risk

Split ownership

Joint Venture

Stages of Joint Venture

1. Joint Venture ObjecZves
Cost/Benet Analysis
Partner SelecZon
Business Plan Development
Joint-venture Agreement
Contract wriZng
Performance EvaluaZon

Exit Strategy

Reasons to leave
Incurred sustained losses.
failed to meet ethical responsibiliZes.
intense compeZZon.

References
Robinson, D. (2013). Pret A Manger to speed up expansion. Financial Times. [online] Available at:
hhp://www.l.com/cms/s/0/22b8c9b6-ab47-11e2-ac71-00144feabdc0.html#axzz3xYCs7PVr
[Accessed 4 Dec. 2015].

King Suad University. (2016). Value chain analysis graph (2016). [Online] available from:
hhp://fac.ksu.edu.sa/halankari/announcement/26641
Accessed: 17th of January 2016

New plant. (2015). Belgian Beer Mussels with Garlic & Ginger (2015). [Online] Available from:
hhp://www.newplanetbeer.com/2013/05/belgian-beer-mussels-with-garlic-ginger/?ao_conrm
Accessed: 17th of January 2016

Pret A Manger, (2015) Financial Results 2014 [Online] Available from:
hhps://www.pret.co.uk/en-gb/nancial-results-2014

UN sta>s>cs division (2015). UN staZsZcs division (2015)
[Online] Available from:
hhp://unstats.un.org/unsd/default.htm
[accessed 8th of January 2016]

Hollensen, S. (2004). Global markeZng. Harlow, England: Financial Times.


Bank of England, (2016). Why is the UK banking system so big and is that a problem?. [online]
Available at: hhp://www.bankofengland.co.uk/publicaZons/Documents/quarterlybulleZn/2014/
qb14q402.pdf [Accessed 18 Jan. 2016].

References

Harvard Business School, (2016). The Diamond Model - InsZtute For Strategy And CompeZZveness -
Harvard Business School. [online] Available at: hhp://www.isc.hbs.edu/compeZZveness-economicdevelopment/frameworks-and-key-concepts/pages/the-diamond-model.aspx [Accessed 2 Jan.
2016].

World Bank (2016). GDP per capita (current US$) | Data | Table. [online] Available at: hhp://
data.worldbank.org/indicator/NY.GDP.PCAP.CD [Accessed 17 Jan. 2016].

Global Economy (2015). The global economy (2015)
[Online] Available from:
hhp://www.theglobaleconomy.com/
[Accessed 7th of January 2016]

OECD (2015). Unit labour costs and labour producZvity (employment based), total economy.
[Online] Available from:
hhps://stats.oecd.org/Index.aspx?DataSetCode=ULC_EEQ
[accessed 9th of January 2016]

Soil Associa>on (2015). Organic market shows improved growth amidst tumbling food prices (2015)
[Online] Available from:
hhp://www.soilassociaZon.org/news/newsstory/arZcleid/7805/organic-market-shows-improvedgrowth-amidst-tumbling-food-prices
[accessed 5th of January 2016]