A Business Planning Analysis Commerce Essay

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Pret A Manger is one of the United Kingdom's most dominant players in the food industry. This sandwich brand is so well known that it has opened branches throughout the world. The author has been working part-time as a Pret employee in one of its London branches, and believes that the company is able to take care of its employees and still manage to earn humongous profits. With this, this paper will tackle the sector's business planning contribution, define the role and potential of business planning for Pret A Manger, identify system factors which influences success and failures of the business plans, identify Pret's limitations as an organization, review issues of stability, feasibility, and attainability against available resources, and name two significant changes in the market during the last year which affected the organization.

Table of Contents

Part 1 - Business Plans and Pret A Manger

A. An overview of business plans

7

B. Role of business planning

8

C. Potential contribution of business planning

9

Part 2 - Analysis of Pret A Manger's Key Concepts

10

A. Competition

B. Prices

C. Economic changes

11

D. Staff

E. Weather

Part 3 - Organizational Limitations

13

A. Marketing

14

B. Finance

15

C. Management

Part 4 - Evaluation of business plans

17

A. Evaluation form

B. Determining if the objectives are met

18

C. Determining profit and deficit

D. Determine if the activity is successful or a failure

E. Group forum

Part 5 - Analysis of Environmental Changes which affects the growth of Pret

20

A. Ban on Tuna

B. Expansion

22

Part 6 - Conclusion and Recommendation

23

Bibliography

25

List of Figures

Figure 1 Business Plan Cycle

14

Figure 2 Evaluation Process

17

Part 1 - Business Plans and Pret A Manger

It could be said that Pret A Manger is one of the United Kingdom's most prominent sandwich shops of all time. Though there are many sandwich shops, delis, and cafes in the United Kingdom which sells the same products and same services, Pret A Manger's dedication to providing healthy and fresh sandwiches go unrivaled. Throughout the years that Pret has been open, there number of its patrons continue to grow by the day, and will still continue to multiply as the years pass by.

The company's mission and objective is simple enough. Founders Julian Metcalfe and Sinclair Beecham met in college, and wanted to eat fresh sandwiches as a healthy alternative to oily and greasy fast food meals. This is why Pret A Manger serrves fresh, genuine, and healthy sandwiches without preservatives, additives, and chemicals [1] . The co-founders loaned a whooping amount of £17,000, bought the rights to a store that was about to be closed, and opened their first Pret A Manger shop which was located in Victoria Street, London [2] .

Literally translated, Pret A Manger means "ready to eat", which is why most of its patrons are people on the go who are thankful for the fast service and delicious food. At the start the two friends do not have the funds to pay for their exquisite tastes in ensuring that every product is created fresh and made of organic materials, which is why during the company's first two years, even the forefathers of Pret A Manger rolled up their sleeves to toss a cheese sandwich and prepare the sandwiches themselves. Yet through the years, the two of them has mastered the perfect formula in creating the Pret sandwiches as they are now known throughout the world.

Though there is no official record of the sandwich chain's business plans, the author is privileged in knowing internal issues of the chain since he works at one of the restaurant's branches in London. The author works part-time as a Pret staff, and is trained in the Pret attitude and Pret lifestyle. With this part-time employment, the author was able to gather information about how business plans were developed and implemented. Also, the author asked for the branch manager's consent for an interview, which will solidify the other parts of this paper.

Each Pret A Manger branch is unique in terms of the complete menu each branch serves, as well as the terms of an employee's attitude towards the work itself. Yet the common denominator in all Pret shops are the enthusiasm of employees, and their high energy which makes each visit to Pret A Manger an enjoyable experience.

The author will utilize his prior experiences in Pret A Manger as the focus for the analysis of this paper, as well as the other parts of the coursework which would all revolve around how business plans were created, evaluated, and other factors, in Pret A Manger. The author will continue to evaluate business planning's role, potential, and contribution to this particular Pret A Manger store in one of its London branches.

A. An overview of business plans

Basically, business plans work in such a way that it outlines the company's key concepts, summary, services, market analysis, strategy and implementation, management, and financial plan for the upcoming terms. A business plan is supposed to pave way for creating concepts which would entice more customers, produce more products, and in turn gather more income for the company.

A business plan is defined as a document which sums up important operational and financial objectives of an organization, and includes all detailed plans and budgets for the future which would entail how each objective will be fulfilled by an organization [3] . Others would say that a business plan could well describe a business, and its pertinent information such as its marketing and communications, finances, and possible income and deficits [4] .

It serves as a roadmap wherein stakeholders, the management, and major contributors in the company could refer to as a guide and reference for their decisions. A well-created business plan could make a company more income than they had in years. Provided that the plan was properly devised, and each strategy is properly implemented, a corporation could never go wrong with a well-thought of business plan.

B. Role of business planning

The role of business planning could be said as a channel wherein all concerned parties could refer to from time to time. It contains information such as possible incomes and losses, the status of the company's finances, marketing plans, among many others. It has all the major information needed in order to make the business run smoother.

Business personnel usually rely on good business planning in order to succeed in their fields. When an organization has a well-planned, well-implemented programs and summaries, they would move forward in the corporate world. A business plan could make or break a company, as a lousy plan could cause bankruptcy, whilst a good plan could earn the organization millions.

In an organization such as Pret A Manger, it is clear that proper business planning could give the company more room for growth and further their profits.

C. Potential contribution of business planning

The author believes that a business plan which is well designed and was properly executed could create more revenue for an organization. For Pret A Manger, having a great business plan could do nothing but improve the company's sales. Since Pret A Manger is already an established company with a lot of followers, it would be very easy in their business planning team to come up with better plans to keep generating more income for the company.

Since Pret already has a lot of experience in terms of selling their products, their committees could easily determine how to increase sales. The Pret staff is also renowned for being a happy bunch, which could easily implement all the necessary changes and ensure that they are followed.

Part 2 - Analysis of Pret A Manger's Key Concepts

There are many things that influence a company's success and failures in terms of implementing business plans. Even though Pret A Manger is an established company, there are still many things which could hinder its plans from flourishing. This part of the paper would be dedicated to identifying and evaluating key "hard" and "soft" system factors which could influence Pret's success and failures in the proper execution of its business plan.

The sector of Pret A Manger always revolves around a wide range of consumes. Business men and women enjoy eating at this sandwich shop because of the diverse food choices. Pret has a fast service, which is why it is also the best place for those people on the go. Yet there could be many things which could turn a detailed business plan into a flop. Below are some of these impediments to Pret's success, and possible reasons for failure:

Competition. In this modern setting, there are many competitors who are selling sandwiches on the go. People who have stopped embracing healthy lifestyles have turned to fish and chips for their meals. Fish and chips shops could be seen in almost every street of the United Kingdom. In London, Pret is positively competing against McDonalds which now sells sandwiches, Subway, and other fast foods. Pret's unyielding vision of providing healthy alternatives to junk foods could only go as much. If the marketing and promotion schemes thought up by the creative Pret staff were inferior to those of other companies, then Pret could lose its costumers to the more enticing advertisements and promotions of other food joints.

Prices. It is no secret that all of Pret A Manger's foods are prepared on that same day that they are sold. All unsold foods at the end of the day are given away. On every single day, Pret employees and staff create fresh products, which are made on each store. With the inflation, prices are rising, and buying organic and healthy alternatives to those on the market are becoming more and more expensive. The thinkers at Pret A Manger have to establish a way which would ensure that they are getting cheap raw materials, yet are not compromising the integrity and quality of the restaurant's food.

Economic changes. The economy changes every now and then. A latter part would be dedicated to enumerating these changes, but for now it will suffice to say that though the execution of Pret's business plan could go out smoothly, if it somehow coincides with economic changes, then the business could go flop. Such an example of this is when a prominent figure died at Itsu, a Pret A Manger subsidiary. The patron died due to chemical poisoning, which he incurred before going to the Itsu branch. Though it was proven that the management and the staff of Itsu were not the cause of the man's death, there were criticisms surrounding the store, and before long it was pronounced as an unmentionable dinner location. The economy and the love of the patrons all turned around in one day for that single event

Staff. Though Pret A Manger only employs happy people, there could be a branch wherein this strict protocol is not followed. That one employee could set a domino motion for all employees wherein they would be uninspired to work and be happy in their workplace. Though Pret ensures that the employees are happy at their possible situations, a company could only do for as much.

Weather. This is an excruciating factor that could affect the business plans of Pret A Manger. Since the company has established itself as selling fresh, unadulterated raw materials which are free from chemicals, preservatives, and any additives, a lot relies on the deliveries made by each supplier. There are instances wherein the prices would rise due to the weather, such as when there are storms and the prices of vegetables would grow unnecessarily high. If for example the Pret store would schedule their business plan to have materials for the next month by a certain date, a weather disturbance could delay such plans and the company would have to incur the losses.

These are the key hard and soft system factors which could influence Pret A Manger's rise or fall. Though majority of them are circumstantial in nature, an organization should be able to prepare for these worst case scenarios. After all, a single bad luck with the weather could delay a whole month's profit, and place the store in deficit for the whole month. Or an unruly staff member could be a liability in an event, and the rowdy mood could catch up upon the other members. At all costs, these behaviors should be prohibited and limited, as they would only make the company look in a bad light. Lastly, though these factors are outside of the staff's scope, they should be addressed should each incident happen to prepare the organization, and help it move forward instead of losing more revenue.

Part 3 - Organizational Limitations

Every organization has a lasting secret as to how they manage to earn a lot of revenue. For Pret A Manger, the answer lies within their employees. Head of Communications Jay Chapman [5] mentioned their secret lies in revenue. In ensuring that their stores get the quality service they demand from all Pret employees, they have come up with the Pret attitude [6] . The Pret attitude refers to the happy, bubbly, and talented bunch of individuals in each store which makes a visit to Pret A Manger a truly extraordinary experience.

Since sixty percent [7] of the mid management to higher management of the Pret A Manger family were comprised of executives who worked themselves up the corporate ladder. As an astoundingly large number of executives have firsthand experience in the Pret A Manger experience from ground up, they know how their subordinates are treating clients, and how each staff should act. With this valuable knowledge, it is easy to see how each business plan is shaped. Though the author is not familiar with the upper management and methods of Pret A Manger, it is evident that teamwork and cooperation with one's colleagues plays an important part in each store's business plan.

The process for creating a business plan in the Pret A Manger branch in London follows the following paradigm:

Figure 1 Business Plan CycleMarketing. Perhaps it could be said that the marketing team plays the most critical part in developing a business plan for Pret A Manger. The first task for the marketing team is to scout nearby shops and determine which ones are competitors and opponents in the battle of getting the most number of customers, as well as scouting their ideas for promotions. Each threat should be treated closely and accordingly, as each threat has a unique solution. For example, if a McDonalds' opened up along the street, then Pret must prepare to sway the customers with their healthy sandwiches. Meanwhile, if they see how the customers are patronizing the fish and chips shop along the corner, then the Pret A Manger shop could sell fish and chips at a lower price. After determining these factors, the marketing team then collaborates on how to promote the store better. They would talk about possible activities and events which could raise revenue for the company, as well as entice the customers to be more faithful to Pret's products.

Finance. After the marketing team has finished their proposals, the finance team would then check each activity and see if it is feasible or not. Each business plan would be scrutinized in terms of its financial advantage. The finance team would check if the expenditures for a particular event or plan is worth the potential growth and income that would be generated. Likewise, they will inform the marketing team of the budget, and would at all costs safeguard the decisions about the budget which could make the branch lose money. In this way, not all proposals are accepted, and only the most feasible ones are processed for financing quotations.

Management. The last phase of the business plan is in the managerial level, wherein the proposal is given to the management, and the branch manager would apply the necessary changes. If it is a simple suggestion, then the manager would be able to approve it on one go. However, if it requires a big decision, then the management would forward it to the head office for their decision.

Since Pret A Manger is a big company, each branch plans its business plan and forwards them to the head office for proper documentation. However, each branch manager has the power to approve or reject proposals as seen to be appropriate for a branch.

For a Pret A Manger branch in London, there are many competitors in the area. In London alone, there are several Pret A Manger store, since the company aims to spread its scope in order to gather the most number of customers. However, if there is another Pret store just a few blocks away from one's location, then there could be a scrimmage over a definite number of customers.

The organization is limited by the fact that Pret A Manger in London would still need approval from the head office. Since the branch's promotions and activities would reflect upon the Pret A Manger brand as a whole, it is necessary that each branch is able to comply with the standards set by the forefathers. This could limit creativity and a possibility for exploring new methods of promotion.

In the author's opinion, one believes that being part of a big corporation could limit the productivity and creativity of a small branch. Since a particular branch is an extension of the bigger picture, it is necessary that all precautions be made in order to ensure that the branch's ideals are upheld and not exploited. Such limitations could hamper the promoting tactics of a smaller branch.

Part 4 - Evaluation of business plans

As mentioned in the previous part, each Pret A Manger store has a unique way of determining if their activities and promotions were effective or not. For the particular organization wherein the author belongs, the following figure determines the success of an event or promotion:

Figure 2 Evaluation Process

The evaluation process follows the following cycle:

Evaluation form. Participants will be given evaluation forms a few minutes before the event. Oftentimes these evaluation forms would not be completely filled by participants. However, these forms carry pertinent information which are crucial in determining if the objectives of an activity are met.

Determining if the objectives are met. Each activity has a different set of objectives. For example, this particular Pret A Manger branch in London contracted models to give away flyers in a major mall in London. These flyers contain information as to how to order online the new Pret website. The Information Technology team of the specific Pret shop found a way to determine the number of orders which followed the instructions provided by the flyers. This way, it was easily determined how many people ordered online by following the instructions provided by each flyer.

Determining profit and deficit. Likewise, each activity has each own budget. For the particular event mentioned above, the company had to pay for models, the printing of flyers, and the specialized team which monitored the orders via the new website. With this, it was easier to see how many orders came from those people who received flyers in the mall, and which orders were made by the customer's own choice. The Finance Team was immediately able to access how much the branch earned for that particular activity, and was able to see if the activity was successful in terms of spreading the word that the branch has a new promotion and order scheme.

Determine if the activity is successful or a failure. Once the teams determine if the activity has generated profit or deficit, it could be determined if the activity is successful or a failure. If an activity brought about a windfall of money, or had call it even with the amount spent for the activity, then it is successful. However, if the activity caused more money than what was allocated for it, and has not generated the projected amount of profit, then it is a failure, and the organization would have to shoulder the losses.

Group forum. The last step of evaluation for the Pret A Manger shop in London wherein the author worked is to conduct a group forum wherein members will air out their concerns about the problems incurred during the activity. Then as a group, the teams would decide what methods should be done in order to avoid such problems in the future, and how to improve their services during possible activities in the future.

These five steps help that particular Pret store in order to gauge and evaluate if the business plan and proposed activities has been successful. However, given that there are issues of suitability for each business plan, perhaps there were methods and points that were missed by the organizers and executioners of the program. Though each business plan and proposed activities were checked and assessed before they were executed, there are criteria which should be considered before each activity. Such is the availability of resources, which means to say that are there enough resources for the business plan? Will the probable income which is to be generated by the business plan suffice to cover the expenses incurred by implementing the plan?

Also, another factor to be considered in evaluating business plans are checking if they conform to the time-related goals and objectives set by an organization. For a certain Pret A Manger branch in London, the branch's main short-term goal is to generate the number of customers in the area, and to increase the revenue instead of losing the customers to other Pret branches. This goal should be met before the quarter ends; in able to determine if the business plan is effective.

These milestones are crucial for determining if the goals and objectives of a business plan are met or not.

Part 5 - Analysis of Environmental Changes which affects the growth of Pret

Yet no matter how good a business plan is, there are still external forces which could hinder the growth of an organization. For Pret A Manger, since it is a part of a large corporation which has hundreds of branches throughout the world, this is a definite problem since one problem at a branch could trigger the decline for all the other branches. Below are some of the recent environmental changes during the last year:

Ban on Tuna

One of the famous recipes of Pret A Manger is its tuna and cucumber sandwich. Yet last year, an environmental documentary entitled 'The End of the Line' showed how the current fishing trends are destroying the oceanic ecosystem [8] . The film mentioned the bluefin tuna, which is an endangered species due to its scarcity. Most restaurants use it since it is a very tasty delicacy. Unfortunately, Pret A Manger is one of those restaurants.

After the premiere of 'The End of the Line' Pret Founder Julian Metcalfe issued a statement which says that the bluefin tuna is now banned from all Pret stores, along with Itsu, Pret's subsidiary which is a sushi house. Though Pret stores also have sushi boxes, Metcalfe banned tuna in both stores. He supported the film's advocacy against fishing endangered species and compromising the oceanic ecosystem [9] .

In another statement, Metcalfe admitted that though the Pret chain could lose potential customers over its decision to take a stand against the illegal fishing of endangered fishes, it is a risk he is willing to take [10] .

This scenario clearly displays how influential the business environment is to an organization. Though selling tuna in Itsu and Pret A Manger branches were included in a thoroughly researched business plan, unforeseen circumstances made this decision redundant and unnecessary. The company had to pocket the expenses incurred in changing their unsustainable tuna with those that are sustainable, and in changing their supplier for the fish. Aside from this, the company also has to shoulder the losses which would happen when loyal tuna and cucumber patrons would transfer to other stores which sell this product.

This tuna-ban was not only applied to Itsu stores, but to all Pret A Manger branches as well. For the particular Pret branch wherein the author works, majority of the stocks were the ingredients for tuna and cucumber sandwich. Those stocks were wasted, as loyal patrons of the sandwich demanded that they be given the tuna and cucumber sandwich despite its ban. For the rest of 2009, the branch battled with the Tuna Ban, and convincing consumers that the replacement was just as good as the bluefin tuna.

Expansion

On a more positive note, it has been said this year has 'favorable property markers [11] '. Since the business environment deems that it would be a wise move to acquire property, Pret took advantage of this observation and went to plan the expansion of more shops.

Pret A Manger has been growing steadily. In 2009, there were a total of 232 outlets. With the promise of cheaper property, it is no wonder that the founders decided to expand more. Though there are exactly two dozen shops in the United States, and there are more than two hundred outlets in the United Kingdom, the founders are looking into opening shops in the north of England.

This shows that since the business environment dictates that it would be a wise move to invest on property to open new branches, the business plan for that year was influenced, and thus, the Pret A Manger corporation decided to expand more. The environment showed how much an organization could earn once they develop their markets in other areas.

The author gave two prime examples of how external forces could influence a company in its business plans and implementation. The market dictated that it would be a good choice to invest on properties, and Pret seized that opportunity to raise its profits.

Part 6 - Conclusion and Recommendation

The author notes that a business plan serves as a roadmap for the future endeavors of a company. It should contain pertinent information about an organization such as its market summary which should include its competitors, their major promotions, and other points of comparison; its financial summary which contains the company's financial standing; and other information which could prove to be pivotal in a developing business.

Each business has its unique criteria for developing a business plan. In Pret A Manger, each business plan is one of a kind in a sense that minor business plans are created by each branch. In the branch wherein the author worked before, the minor business plan is created by the marketing team sending out scouts to check competitors and their promotions, and possible target market which they could entice to support the branch via the new promotions. Then the marketing team would write proposals for the business plan about their findings, and proposed activities, and aims, and would pass it along the financial department for their input regarding the finances of the branch. The financial team would try to see what the possible income each activity could generate, and what expenses the branch would have to pay in order to make each activity possible. After this, the proposal would be given to the Branch Manager, who would make the necessary changes and would then approve it if it is a simple event, or gain approval from the head office if it is a big event.

Likewise, each company has its own methods of determining if a business plan is effective or not. Such evaluation calls for proper comparison of the milestones or set goals and aims, alongside with the sustainability and other pertinent matters which could affect an organization. For this particular Pret branch, the evaluation is determined by handing out forms to all participants of an event or activity, and then scrutinizing the answers and the results of the activity after it is finished.

Lastly, no matter how well-planned and well-thought of a business plan is, there are external forces which could hinder its plans to achieving complete fulfillment. The examples provided in this paper are the environmental changes experienced by Pret A Manger as a whole in the last year. During 2009, there was an issue with the bluefin tuna which was dominantly used in Itsu the sushi bar, and in Pret A Manger's own sushi box. Every single tuna was removed from the delis and from Itsu, and the management had to find a way to have an alternative to bluefin tuna which would still taste good for the consumers. Pret mastermind Metcalfe even admitted that there would be current losses for that year because of the tuna has to be recalled, and loyal patrons of the tuna and cucumber sandwich would be upset and could lose their patronage to other sandwich bars which has tuna sandwiches. Another example provided in this paper is about the positive economic feedback which deemed that 2010 is a year for a prosperous property market. After hearing of this good news, the founders and leaders of Pret A Manger decided to further expand their thriving business into the north of England, and in other areas which will give them the opportunity to reach more people.

Overall, a business plan has a huge impact in an organization, and it could potentially benefit an organization in a very big way in terms of being able to foresee possible income and possible losses due to expenditures and wrong decisions. However, if a business plan is properly created and implemented, then there is no telling just how far a company might soar.

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