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Structure and Strategic Choices for Prets Success Before COVID-19
Business success is often determined primarily by a companys financial performance and revenue growth. Businesses outline objectives to be accomplished and formulate, implement, evaluate and control strategies for successfully achieving such goals (Wheelen, 2017). Before the global COVID-19 pandemic hit, Pret was thriving, with most of its success attributed to its structure and strategic choices. One such strategy is the range of sandwich options that distinguished it from its competitors with limited options (Tavassoli & Spungin, 2020). Pret later diversified into hot drinks and incorporated organic coffee. Businesses employ product and market diversification to expand to other domains with different features and increase their value (Sun & Govind, 2017). Consequently, Pret profited from the hot drinks, which accounted for a fifth of the companys revenue by 2018.
Prets products were consistent with its brand image of handmade and natural. The brand image reflects the reality of the core product, its facts and features, its functions and benefits (Lalaounis, 2020, p. 4). As such, Pret sold its customers exactly what it advertised. This, in turn, placed the business in a good position and consistent with the latest trend of more consumers opting for fresh and natural products (Tavassoli & Spungin, 2020). The menu was also regularly updated and expanded with various notable additions in 2019, including vegetarian and fruit-based salad options.
As a business strategy and to offload the excess inventory, Pret donated to food charities rather than discount the items. Besides philanthropic motives, donating to non-profits can be a powerful marketing tool and can benefit the business. Non-profit marketing can enhance a companys reputation in its local community and generate goodwill among employees (Bennett, 2018). Therefore, it is very likely that Prets donations contributed positively to its image and enhanced its reputation among the local population it donated to.
Pret invested in suitable human resource and customer service by hiring and promoting passionate individuals. It emphasized passion and, thus, valued attributes like cheerfulness, communicating clearly, taking the initiative, and working as a team (Tavassoli & Spungin, 2020). Hiring suitable personnel for suitable roles is a strategic human resource management approach. It stresses that a business human resource policy must fit the businesss strategies and objectives (Brown et al., 2019). Pret witnessed this in its 60% yearly employee turnover rate a number less than 20% of the average in the entire industry. This implies that hiring the right people for appropriate tasks, eventually results in less turnover rate.
The store-level inventory management system used by Pret was remarkably accurate. Inventory management aids a business in coping with demand, avoiding shrinkage, and optimizing fulfillment (Shenoy & Rosas, 2018). Consequently, Prets system quickly tracked sales and consistently adjusted algorithms that anticipated demand beforehand. The algorithm also aided in selecting each shop according to local tastes (Tavassoli & Spungin, 2020). This would probably explain how it could continuously and successfully supply its numerous customers in the nine countries it operated.
The Pret shops location was strategic, which enabled them to deliver to their target market easily. The business based its choice of sites on the premise that workers were willing to only walk short distances for food (Tavassoli & Spungin, 2020). It then considered a locations historical sales, the volume of footfalls and population, visibility, and the location of its competitors. Whether a business is physical or online-based, the choice of location is critical for its customer base (Schroeder, 2019). Thus, Prets approach to choosing locations was significant in its success in the nine countries it operated.
Effects of COVID-19 Pandemic on Prets Business Model
The COVID-19 pandemic has forced businesses to look for alternative strategies of operations. As a result, business organizations have been made to change their models to cope with its enormous challenges and survive the crisis (Seetharaman, 2020). A business model encompasses the structures and processes required to develop products and services as well as the mechanisms for generating income (Blackburn, Clercq and Heinonen, 2018, p. 129). Pret is among some of the businesses that were forced to change their structure and processes.
With strict government restrictions on social congregation and movement, Pret closed most of its shops. The business had almost been entirely physical but had to embrace digital takeout and deliveries to comply with restrictions (Tavassoli & Spungin, 2020). Moreover, since it had limited hours of operation, it had to offer a reduced range of some of its famous options and introduce new ones that conformed to its latest model. Numerous businesses, especially in retail and hospitality, have adopted alternative distribution mechanisms to continue operations (Seetharaman, 2020). Thus, Pret going digital, though in limited quantity, was a means to survive an unexpected crisis.
Due to the pandemic, Pret created office drops to limit physical contact with its customers. These were drop-off locations established in Londons office buildings and offered contactless and convenient delivery (Tavassoli & Spungin, 2020). A business has to evolve in its strategies, systems continuously, and products to prevail in crises (David & David, 2016). With the above-mentioned innovation, it is clear that Pret was embracing change in its latest model.
Pret shifted to online shopping and introduced some of its products like organic ground coffee to Amazon. It had initially made plans to sell coffee and other packaged products in supermarkets before the pandemic struck (Tavassoli & Spungin, 2020). This was part of its broad approach to follow the consumer. The method was probably a brilliant idea because its digital sector was far behind, and it was playing catch up. Such platforms as Amazon would offer easy access for Prets customers.
Pret developed a new subscription model that would offer subscribers several beverages a day. For just £20 a month, subscribers would be eligible for up to five drinks a day (Tavassoli & Spungin, 2020). These would include iced drinks, teas, all coffee varieties, hot chocolate, and a selected few handmade smoothies. In addition, it had incorporated strategic decision-making, which enabled it to create value in a quick-changing environment by utilizing the available resources (Aagaard, 2019). The pandemic had put Pret in an impossible situation, but it found an alternative approach by employing strategic decisions.
Also, in Prets new model, it worked with new partners to distribute its products. Although Pret was already in a partnership with Deliveroo in 2019, it was only experimental (Tavassoli & Spungin, 2020). When the pandemic hit, and the government initiated lockdowns, Pret expanded its options as it included both Just Eat and Uber Eats. When there are changes that threaten the existence of businesses in the environment, they are encouraged to adopt new techniques of working together, create and share valuable items (Aagaard, 2019). Although it feared leaving the reputation of its brand in the hands of nagging motorcycle couriers, within a few months, Prets revenue from deliveries covered for a fifth of the reducing sales. Thus, Prets strategy of identifying and working with new partners seemed to have paid off.
Recommended Strategies to Gain Prets UK Market Share
The food and beverage business has been uniquely affected by COVID-19, unlike other industries. This business fulfills some of the worlds most basic requirements, and, as such, it is one of its fastest-growing (Chowdhury et al., 2020). Market share is one of the primary determinants of a businesss success. Gaining market share is a competitive approach employed by organizations to be stronger as they weaken their competition (Mack, 2021). Pret, a food and beverage business, has been heavily impacted by the pandemic, as noted above. Still, the company has every chance of gaining market share and getting back to its best. Below are various recommended approaches that Pret can utilize to gain market share in the United Kingdom, where it majors most of its operations.
Pret should embrace the innovation of both its products and services. An effective innovation strategy that advises on the appropriate target to achieve maximum growth and the untapped opportunities to aid employees to fulfill customer requirements guarantees gain in market share (Strategyn, 2021). For example, when Pret develops an item that is yet to be offered by its competitors, the consumers will buy the item for the business. This earns Pret lots of revenue, and since higher profits translate to market share, innovation will lead to an increase in market share.
Pret should embrace strategic alliance with other businesses selling the same products, distributing them, or just closely associated with it for effective marketing. A partnership with another company will inject cash into Pret, allowing it to finance aggressive efforts to gain market share (Delaney, 2019). As such, it can link with a bigger business to empower it to get better deals in negotiations with suppliers. This comes in handy when Pret has a desirable item but lacks sufficient buying power to acquire raw materials at lower prices from suppliers. It can then reduce its prices to attract customers who buy from its competitors.
Another strategy that can come in handy is taking advantage of its weak competitors. If it considers a competitor to be vulnerable, it should exploit it to gain market share (Mack, 2021). For instance, if a business in food and beverages expanded its operations so much that it overlooks some minor details such as customized services that cater to the precise needs of consumers. Then, it can capitalize on the flaw and seize the opportunity and offer the customers a service of the highest quality, and, in turn, steal them away from the competition.
Strengthening its relationship with customers can also guarantee its already present market share and even attract more. Customers who are contented with their relationship with Pret will not have thoughts of abandoning the business or a product even when a competition launches an exciting product. On the contrary, as they interact with friends and relatives who often buy from Prets competitors and inform them of their brilliant relationship with the business, they are likely to lure them to Pret (Busignani, 2020). Gaining market share in this manner thus increases Prets revenues without the business spending on marketing.
Finally, Pret can gain market share by lowering some of its prices or offering discounts on products. This is the easiest way to attract and retain more customers and is guaranteed to significantly increase the market share (Palmatier & Sridhar, 2017). Even with a reduced price, Pret should ensure the quality remains the same. There is no doubt that customers will opt for cheaper and high-quality products. However, making the products affordable is not the same as making losses. It should ensure it still makes profits, even though it would be lesser than its competitors.
References
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