Business Articles Assignment Sample
Article Details
The article in concern has been titled ‘Pret a manger shifts to dinner deliveries and out-of-town stores’ published by The Financial Times in September of 2020.
URL Link: https://www.ft.com/content/a8368776-f377-4462-a2fc-cfe31544104d
Background Information
The organization at the Centre of the article is the Sandwich store which has been concerned at offering quick lunches to the traditional office worker who forms the most dominant customer base of the company. The company has been attempting hard to revive its dying customer group. The main business of the organization mostly revolved around the London based Commuters who had been decimated due to the pandemic. This is even more crucial as the homeworking feature deserted the administrative Centre. The brand had been highly reliant on London as it is the market that accounted for its highest earning before the attack of the pandemic. As such the concern of Pert had been towards promoting Pert outside as the organization had been earlier too rigid to take their company beyond London. The concern of the management had thereby been directed towards taking up the food to the city dwellers as well as opening up more channels in order to reach out to the suburban’s in order to revive its lost customer base due to pandemic. As a mode of gaining its lost customer base. Pert A Manger is a sandwich store based in UK as well as operating worldwide founded in the year 1983 which targeted the office workers as its most dominant customer groups availing its fast ready to consume sandwiches, however the pandemic changings the work culture globally affected its operation as its target customers as well.
Business Case
In the context of the organization concerned it has been reflected that the organization has been struggling a lot to gain back its lost target customer groups or reach out to them through different business channels. The concern of Pret A Manger has also been dedicated towards reaching out to the target customers in the suburbs and other parts of London by developing new channels and reaching out to these customers at their homes and serving them with doorstep service. This is so because the entire work culture has shifted to working at home culture. The organization had dedicated its concern beyond London to its target customer groups and had accounted for the maximum portion of earnings for the organization in concern.
Another factor that has contributed to decisions in the brand is reflected under the condition that there had been a drastic increase in the price of the meal for the past one year which urged the management to prepare for less expensive combinations. Pret A Manger thereby developed its first dark kitchen and developed a renewed dinner menu so that they can serve a large number of customers at their home too.
There had been a sudden and recent expansion of the business activities in the past few years as it has moved ahead to launch about 60 stores between 2016 to 18 and thereby ended up having almost 300 but despite of such a huge mode of expansion it had fallen behind other players of takeaway meals outlets as it could not create an effective online scheme and solution for distribution. Thereby the struggle of Pret A Manger during the pandemic had been towards struggling with its other rivals throught the period of pandemic and thus had been mainly due to their heavy reliance on London solely (BAshir et al., 2020).
The organization had been counted for a large number of drawbacks which included lay off and closing down of 28 stores in London. Its aim had been towards spending less at other sites by bringing down the range as well as the opening hours. In order to make up for the crisis and the lose that they have accounted for., the aim of the organization had been dedicated at entering into brand new areas. In its diversification attempt the concern of Pret has been towards introducing Pre packed food ites in supermarkets and thereby beginning to attempt to sell bags of coffee along with ocado in the october (Gereffi, 2020).
Brand Diversification
A brand new registration coffee solution had been introduced by Pret as its diversification attempt. Using a model proposed by Panera bread, the registration based service would allow the consumers to have five cups of coffee a day for about 20 months. It has been reflective of the fact that the organization has been undertaking several marketing strategies at the eve of the crisis imposed by pandemic. It has thereby been reflected that the diversification effort had emerged from the idea of marketing the brand and also establishing a new customer group for its product and services which had been lost due to pandemic (Hitt et al., 2021).
Brand diversification is a term which is considered as a process dedicated at launching a new product in the new market. This has been dealt with effectively in the Ansoff Growth Matrix or Porter’s Generic Strategy. Diversification has been denoted as three different types, Concentric diversification, horizontal diversification and lateral diversification. It is a corporate strategy that the brand in concern has taken into account in order to enter the market with a new product as well as new lines of product and thereby develop new markets and services and thereby involves technology as well as knowledge.
Following the Ansoff matrix the organization Pret A manger had undertaken two different types of diversification as a mode of its marketing strategy after the crisis of pandemic. It has indulged in market penetration by reaching out to supermarkets with its pre-packed sandwiches and also opening up the scope of online food takeaway service as offered by other takeaway channels. It is also in respect to the product, Pret A Manger had been indulging in product development as well in order to cater to the high increase in the price of the food as well as the developing online takeaway market and reaching out to remote locations whereas the operation of Pret had been confined only within the stores and outlets it had set up primarily in Loondon (Ivanov, 2021).
The concern of Pret in respect to market diversification had been dedicated to understanding the changing food aka hospitality market scenario and thereby attempting to adapt to change as a form of changing demands of the market. The new product that Pret is seeking to develop as a reaction to the increasing meal price is deeveloping much cheaper combination of food and along with that reaching out to the doorsteps of their customers with the dinner (Masruro et al., 2020).
All these changes have been introduced in the challenge that has evoked for the firm in the wake of the COVID 19 crisis. The understanding of diversification is based on subjective interpretation and thereby requires us to take into account the perception of the customers rather than the perceptionsof the managers. The products thereby tend to develop or boost the new market and the develop a new market and thereby promote the development of the product. Product diversification involves new products being added to the line of the existing products to be manufactured and marketed and the expansion of the line of existing products has resulted in adopting a new business line (Mendoza-Abarca & Gras, 2019).
Pret A Manger has indulged in taking into account the changes in the demograhica and psychographic understanding of the traditional target market. In order to regain its market share and get back to the earlier earning before the time of the COVID requires Pret to undertake certain changes in its operation in order to accomodate the changes in the environmental conditions (Mintz).
Pret tried to emter the market of the pre packed food at the Supermarket by supplying them with pre packed sandwiches and meals under its brandname. Along with that the concern had been towards trying new and cheaper combinations of meals in order to cater to the sudden increase in the price which the office goers would not try to spend on a daily basis. It had also considered streamilinging its operation by entering its alternative market and reaching out the customers at their doorstep while they work at home with the food products.
This is joined by the initiative of registration coffee solution which allowed the registered user toavila 5 cups of coffee a dayfor 20 months. The aim of Pret in terms of its operation had been dedicated towards opening up between 5-10 websites where they can develop meals for the delivery groups like uber consumers, deliveroo and simply eat. It has been expected that the product sales through the delivery channels is likely to increase about 8 times than it used to be before the attack of the pandemic had hit the market (Njuguna et al., 2018).
The diversification of Pret has also happened in terms of its expansion to enter the market of the suburbans with cheap ready to consume food products to be reached out at the door steps of the target customer groups (Mintz, 2021).
The issues faced by the organization included managerial issues and organizational structures as well as it required the organizations to deal with the management at the highest position in the hierarchicalorders to deal with the offerings. It has been reflected in the course of the concern of the organization that issues enccountered by Pret had been joined by the issues its owner Jab had been encountering in terms of handling the funds and additional investment. The issue is not only of maanaerial issues but also included issues of strategic importance and required an intervention of the organization to cater to the need of the hours (Stadler et al., 2018).
Pret already had a position in the market of fast ready to consumer food with about 300 stores in London itself. A structured knowledge of the customer base in the market has allowed them to reach out to the customers in an effective number and render them services otherwise would not have been available to them. The changes that have been introduced by them in course of their services have been effective for them in gaining back its lost market share (Verbeke, 2020).
Summary
In this respect it can be summarised that the organization in concern Pret A Manger is noted for the ready to consume food products that it used to reach out to the traditional office goers and consumers who did not have time to invest behind lunch as well as expected to spend a considerable amount of money behind their food. With the attack of the pandemic it has been reflected in the fact that there had been considerable drawbacks in the industry where Pret has been operating. It is also crucial to note that there has been a sudden increase in the sales of online food delivery platforms. The concern of Pret thereby had been dedicated towards catering to these crises in the market and thereby look into its recess in order to diversify both its product as well as its services. In order to cater to the market in concern it started developing combinations of cheaper meals keeping the price quotient in concern while considering the changes in the market. It has also decided to opt for the websites in order to connect to the food delivery channels and develop dark kitchens in nook and corners beyond London into the suburbs so that they can reach out to the target customer groups.
The concern of Pret has also been joined with the managerial concerns that the higher authority of the organization has been encountering in respect to dealing with the investors and funding agents. All these factors brought together have given shape to the complexity that the organization has been encountering (Shahzad et al., 2021).
References
Bashir, M. A., Sheng, B., Doğan, B., Sarwar, S., & Shahzad, U. (2020). Export product diversification and energy efficiency: Empirical evidence from OECD countries. Structural Change and Economic Dynamics, 55, 232-243.
Gereffi, G. (2020). What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies. Journal of International Business Policy, 3(3), 287-301.
Ivanov, D. (2021). Supply chain viability and the COVID-19 pandemic: A conceptual and formal generalisation of four major adaptation strategies. International Journal of Production Research, 59(12), 3535-3552.
Masruro, D., Wahyuni, S., Widodo, J., & Zulianto, M. (2020, May). The strategy of product diversification on SMEs brass craft in Cindogo Village Bondowoso. In IOP Conference Series: Earth and Environmental Science (Vol. 485, No. 1, p. 012125). IOP Publishing.
Mendoza-Abarca, K. I., & Gras, D. (2019). The performance effects of pursuing a diversification strategy by newly founded nonprofit organizations. Journal of Management, 45(3), 984-1008.
MINTZ, O. CUSTOMER-CENTRIC NEW PRODUCT STRATEGIES FOR BUSINESSES TO CREATE SUSTAINED ADVANTAGES IN THE LONG TERM. THE POST-PANDEMIC BUSINESS PLAYBOOK, 98.
Mintz, O. (2021). Third Quadrant: New Products. In The Post-Pandemic Business Playbook (pp. 93-105). Palgrave Macmillan, Singapore.
Njuguna, V. N., Kwasira, J., & Orwa, G. (2018). Influence of product diversification strategy on performance of non-financial firms listed at the Nairobi Securities Exchange, Kenya. International Journal of Economics, Commerce and Management, 6(6), 60-83.
Stadler, C., Mayer, M. C., Hautz, J., & Matzler, K. (2018). International and product diversification: Which strategy suits family managers?. Global Strategy Journal, 8(1), 184-207.
Shahzad, U., Doğan, B., Sinha, A., & Fareed, Z. (2021). Does Export product diversification help to reduce energy demand: Exploring the contextual evidences from the newly industrialized countries. Energy, 214, 118881.
Verbeke, A. (2020). Will the COVID‐19 pandemic really change the governance of global value chains?. British Journal of Management, 31(3), 444.
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