Pret a Manger Internationalisation Strategy

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 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). Pret s goal is to be a leading fast food retail company, selling fresh food made on the premises from natural ingredients. !

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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).

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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. !

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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. !

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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.

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THE COMPANY

Pret A Manger is a Uk based restaurant/coffee fast food chain 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). Pret s goal is to be a leading fast food retail company, selling fresh food made on the premises from natural ingredients. !

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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).

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SALES AND SIZE


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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 firm’s 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 Manger’s 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 Pret’s 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.

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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 firm’s 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, Pret’s 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.

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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 Porter’s 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 firm’s 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

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Stage 1: the re gional 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).

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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.

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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 n 2) 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

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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 UK’s 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 Porter’s five forces framework To better comprehend the competition level and the business strategy of Pret A Manger we are going to use Porter’s 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 firm’s 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.

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(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 Belgium’s markets we suggest an undifferentiated strategy, promoting Pret’s 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 Pret’s operations into Netherlands and Belgium following the Porter’s 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 Manger’s 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 that’s 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 partner’s 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 Belgium’s 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 Tesco’s exit strategy in Japan, by reducing their stores gradually, therefore eliminating any lost opportunity in that time frame.

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BIBLIOGRAPHY AND APPENDIX Atradius, (2016). Market Monitor - Focus on food in Belgium | Atradius . [online] Available at: https://atradius.ie/reports/market-monitor---focus-on-the-food-industry---belgium-.html [Accessed 17 Jan. 2016]. Bank of England, (2016). Why is the UK banking system so big and is that a problem?. [online] Available at: http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q402.p df [Accessed 18 Jan. 2016]. Brewer, P. (2007). Operationalizing Psychic Distance: A Revised Approach. Journal of International Marketing, 15(1), pp.44-66. Cobcoe ,(2016). COBCOE - British Chamber Of Commerce In Belgium. [online] Available at: http://www.cobcoe.eu/membership/cobcoe-members/british-chamber-of-commerce-inbelgium/ [Accessed 17 Jan. 2016]. Deryckere, B. (2016). Belgian food industry in terms of sustainable development . [online] Available at: http://fevia-duurzaamheid.be/Fevia%20-%20Report%202013-2015_en.pdf [Accessed 17 Jan. 2016]. The Economist, (2010). Good and hungry . [Online] Available at: http://www.economist.com/node/16380043 [Accessed 01 Jan. 2016]. Eubusiness (2016). The Netherlands: country overview EU - European Union business news and information | eubusiness.com . [online] Available at: http://www.eubusiness.com/europe/netherlands [Accessed 17 Jan. 2016]. Fairtrade Foundation (2009). Starbucks serves up its first Fairtrade lattes and cappuccinos across the UK and Ireland (2009) [Online] Available from: http://www.fairtrade.org.uk/press_office/press_releases_and_statements/september_2009/ starbucks_serves_up_its_first_fairtrade_lattes_and_cappuccinos.aspx [accessed 5th of January 2016] Gillespie, K. and Hennessay, H. (2016). Global Marketing. New York: Taylor & Francis, p.263. Global Economy (2015). The global economy (2015) [Online] Available from: http://www.theglobaleconomy.com/ [Accessed 7 th of January 2016]

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Grunert, K. and Wills, J. (2007). A review of European research on consumer response to nutrition information on food labels. J Public Health , 15(5), pp.385-399. Harbord, D. and Hoehn, T. (1994). Barriers to entry and exit in European competition policy. International Review of Law and Economics, 14(4), pp.411-435. Harvard Business School, (2016). The Diamond Model - Institute For Strategy And Competitiveness - Harvard Business School. [online] Available at: http://www.isc.hbs.edu/competitiveness-economic-development/frameworks-and-keyconcepts/pages/the-diamond-model.aspx [Accessed 2 Jan. 2016]. Hobbs, T. (2015). Pret A Manger’s marketing boss on succeeding without advertising. [online] Marketing Week. Available at https://www.marketingweek.com/2015/04/17/pret-amangers-marketing-boss-on-succeeding-without-advertising/ [Accessed 7 Jan. 2016]. Hollensen, S. (2004). Global marketing. Harlow, England: Financial Times. Investinholland (2016). Food for Thought - June 2014 - The Dutch agri-food sector . [online] Available at: http://investinholland.com/food-for-thought/agri-food-201406/Email/index-9.html [Accessed 17 Jan. 2016]. Kotler, P. and Armstrong, G. (2006). Principles of marketing. Upper Saddle River, N.J.: Pearson Prentice Hall. Learnmarketing, (2016). Perceptual Maps/Positioning Maps. [online] Available at: http://www.learnmarketing.net/perceptualmaps.htm [Accessed 17 Jan. 2016]. Micheal Fitzpatrick (2004). How Pret A Manager failed in Japan (2004) [Online] Available from: http://www.just-food.com/analysis/how-pret-a-manger-failed-in-japan_id94145.aspx [accessed 1st January 2016] Mintel Academic (2015). Eating Out Review-UK-2015. Mintel Academic [online] Available from: http://0academic.mintel.com.emu.londonmet.ac.uk/display/741875/?highlight. [accessed 1 st January 2016] Nielsen (2015). We are what we eat, Healthy eating around the world. [Online] Available from: http://www.nielsen.com/content/dam/nielsenglobal/eu/nielseninsights/pdfs/Nielsen%20Glob al%20Health%20and%20Wellness%20Report%20-%20January%202015.pdf [accessed 3 rd of January 2016] OECD (2015). Unit labour costs and labour productivity (employment based), total economy. [Online] Available from: https://stats.oecd.org/Index.aspx?DataSetCode=ULC_EEQ [accessed 9 th of January 2016] OECD (2016). Regulatory reform and competition policy - OECD. [online] Available at: http://www.oecd.org/economy/reform/ [Accessed 17 Jan. 2016]. Pecotich, A., J. Hattie & L.P. Low (1999). Development of Industruct: A Scale for the Measurement of Perceptions of Industry Structure, Marketing Letters, 11(4), 409- 422.

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Petroff, A. (2016) . This country has the best minimum wage in the world . [online] CNNMoney. Available at: http://money.cnn.com/2015/05/14/pf/minimum-wage-countriesaustralia/ [Accessed 17 Jan. 2016]. Porter, M. (1998). Competitive Strategy. New York: Free Press. pp. 27-29. Pret A Manger, (2015). Financial Results 2014. [online] Available at: https://www.pret.co.uk/engb/financial-results-2014 [Accessed 7 Dec. 2015]. Rebecca Smithers (2012). Store wars: Pret a manger and Eat (2012) [Online] Available from: http://www.theguardian.com/money/2012/jun/22/store-wars-pret-a-manger-eat [accessed 4th of January 2016] Robinson, D. (2013). Pret A Manger to speed up expansion. Financial Times. [online] Available at: http://www.ft.com/cms/s/0/22b8c9b6-ab47-11e2-ac7100144feabdc0.html#axzz3xYCs7PVr [Accessed 4 Dec. 2015].

Saba, A. (2001) , “Cross!cultural differences in food choice”, in Frewer, L., Risvik, E. and Schifferstein, H. (Eds), Food, People and Society: A European Perspective of Consumers' Food Choices, Springer, Berlin, pp. 233!45. Scala Digital Signage Software, (2014) . In-store communication at Carrefour Belgium Scala Digital Signage Software . [Online] Available at: http://scala.com/fresh-storecommunication-carrefour-belgium/ [Accessed 17 Jan. 2016]. Soil Association (2015). Organic market shows improved growth amidst tumbling food prices (2015) [Online] Available from: http://www.soilassociation.org/news/newsstory/articleid/7805/organic-market-showsimproved-growth-amidst-tumbling-food-prices [accessed 5 th of January 2016] The Telegraph (2008). Pret A Manger founders sitting pretty (2008) [Online] Available from: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/2784937/Pret-aManger-founders-sitting-pretty.html#di squs_thread [accessed 3 rd of January 2016] UN statistics division (2015) . UN statistics division (2015) [Online] Available from: http://unstats.un.org/unsd/default.htm [accessed 8 th of January 2016] Zeng, L. (2016). Survival in the Netherlands Consumer Market . World Bank (2016) . GDP per capita (current US$) | Data | Table. [online] Available at: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD [Accessed 17 Jan. 2016].

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

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Uppsala Stage Model (Hollensen, 2011)

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3) Porter’s Diamond Model, adaptation from (Hollensen, 2011)

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Beri Index charts for Western Europe

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5) BERI index chart for the Middle East

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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). Pret s goal is to be a leading fast food retail company, selling fresh food made on the premises from natural ingredients. !

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!

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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). !

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SALES AND SIZE


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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 firm’s 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 Manger’s 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 b y 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 Pret’s 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.

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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 firm’s 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, Pret’s 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.

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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 Porter’s 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 firm’s 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

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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).

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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.

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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 n 2) 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

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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 UK’s 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 Porter’s five forces framework To better comprehend the competition level and the business strategy of Pret A Manger we are going to use Porter’s 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 firm’s 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.

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(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 Belgium’s markets we suggest an undifferentiated strategy, promoting Pret’s 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 Pret’s operations into Netherlands and Belgium following the Porter’s 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 Manger’s 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 that’s 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 partner’s 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 Belgium’s 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 Tesco’s exit strategy in Japan, by reducing their stores gradually, therefore eliminating any lost opportunity in that time frame.

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BIBLIOGRAPHY AND APPENDIX Atradius, (2016). Market Monitor - Focus on food in Belgium | Atradius . [online] Available at: https://atradius.ie/reports/market-monitor---focus-on-the-food-industry---belgium-.html [Accessed 17 Jan. 2016]. Bank of England, (2016). Why is the UK banking system so big and is that a problem?. [online] Available at: http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q402.p df [Accessed 18 Jan. 2016]. Brewer, P. (2007). Operationalizing Psychic Distance: A Revised Approach. Journal of International Marketing, 15(1), pp.44-66. Cobcoe ,(2016). COBCOE - British Chamber Of Commerce In Belgium. [online] Available at: http://www.cobcoe.eu/membership/cobcoe-members/british-chamber-of-commerce-inbelgium/ [Accessed 17 Jan. 2016]. Deryckere, B. (2016). Belgian food industry in terms of sustainable development . [online] Available at: http://fevia-duurzaamheid.be/Fevia%20-%20Report%202013-2015_en.pdf [Accessed 17 Jan. 2016]. The Economist, (2010). Good and hungry . [Online] Available at: http://www.economist.com/node/16380043 [Accessed 01 Jan. 2016]. Eubusiness (2016). The Netherlands: country overview EU - European Union business news and information | eubusiness.com . [online] Available at: http://www.eubusiness.com/europe/netherlands [Accessed 17 Jan. 2016]. Fairtrade Foundation (2009). Starbucks serves up its first Fairtrade lattes and cappuccinos across the UK and Ireland (2009) [Online] Available from: http://www.fairtrade.org.uk/press_office/press_releases_and_statements/september_2009/ starbucks_serves_up_its_first_fairtrade_lattes_and_cappuccinos.aspx [accessed 5th of January 2016] Gillespie, K. and Hennessay, H. (2016). Global Marketing. New York: Taylor & Francis, p.263. Global Economy (2015). The global economy (2015) [Online] Available from: http://www.theglobaleconomy.com/ [Accessed 7th of January 2016]

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Grunert, K. and Wills, J. (2007). A review of European research on consumer response to nutrition information on food labels. J Public Health , 15(5), pp.385-399. Harbord, D. and Hoehn, T. (1994). Barriers to entry and exit in European competition policy. International Review of Law and Economics, 14(4), pp.411-435. Harvard Business School, (2016). The Diamond Model - Institute For Strategy And Competitiveness - Harvard Business School. [online] Available at: http://www.isc.hbs.edu/competitiveness-economic-development/frameworks-and-keyconcepts/pages/the-diamond-model.aspx [Accessed 2 Jan. 2016]. Hobbs, T. (2015). Pret A Manger’s marketing boss on succeeding without advertising. [online] Marketing Week. Available at https://www.marketingweek.com/2015/04/17/pret-amangers-marketing-boss-on-succeeding-without-advertising/ [Accessed 7 Jan. 2016]. Hollensen, S. (2004). Global marketing. Harlow, England: Financial Times. Investinholland (2016). Food for Thought - June 2014 - The Dutch agri-food sector . [online] Available at: http://investinholland.com/food-for-thought/agri-food-201406/Email/index-9.html [Accessed 17 Jan. 2016]. Kotler, P. and Armstrong, G. (2006). Principles of marketing. Upper Saddle River, N.J.: Pearson Prentice Hall. Learnmarketing, (2016). Perceptual Maps/Positioning Maps. [online] Available at: http://www.learnmarketing.net/perceptualmaps.htm [Accessed 17 Jan. 2016]. Micheal Fitzpatrick (2004). How Pret A Manager failed in Japan (2004) [Online] Available from: http://www.just-food.com/analysis/how-pret-a-manger-failed-in-japan_id94145.aspx [accessed 1st January 2016] Mintel Academic (2015). Eating Out Review-UK-2015. Mintel Academic [online] Available from: http://0academic.mintel.com.emu.londonmet.ac.uk/display/741875/?highlight. [accessed 1st January 2016] Nielsen (2015). We are what we eat, Healthy eating around the world. [Online] Available from: http://www.nielsen.com/content/dam/nielsenglobal/eu/nielseninsights/pdfs/Nielsen%20Glob al%20Health%20and%20Wellness%20Report%20-%20January%202015.pdf [accessed 3rd of January 2016] OECD (2015). Unit labour costs and labour productivity (employment based), total economy. [Online] Available from: https://stats.oecd.org/Index.aspx?DataSetCode=ULC_EEQ [accessed 9th of January 2016] OECD (2016). Regulatory reform and competition policy - OECD. [online] Available at: http://www.oecd.org/economy/reform/ [Accessed 17 Jan. 2016]. Pecotich, A., J. Hattie & L.P. Low (1999). Development of Industruct: A Scale for the Measurement of Perceptions of Industry Structure, Marketing Letters, 11(4), 409- 422.

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Petroff, A. (2016). This country has the best minimum wage in the world . [online] CNNMoney. Available at: http://money.cnn.com/2015/05/14/pf/minimum-wage-countriesaustralia/ [Accessed 17 Jan. 2016]. Porter, M. (1998). Competitive Strategy. New York: Free Press. pp. 27-29. Pret A Manger, (2015). Financial Results 2014. [online] Available at: https://www.pret.co.uk/engb/financial-results-2014 [Accessed 7 Dec. 2015]. Rebecca Smithers (2012). Store wars: Pret a manger and Eat (2012) [Online] Available from: http://www.theguardian.com/money/2012/jun/22/store-wars-pret-a-manger-eat [accessed 4th of January 2016] Robinson, D. (2013). Pret A Manger to speed up expansion. Financial Times. [online] Available at: http://www.ft.com/cms/s/0/22b8c9b6-ab47-11e2-ac7100144feabdc0.html#axzz3xYCs7PVr [Accessed 4 Dec. 2015].

Saba, A. (2001) , “Cross!cultural differences in food choice”, in Frewer, L., Risvik, E. and Schifferstein, H. (Eds), Food, People and Society: A European Perspective of Consumers' Food Choices, Springer, Berlin, pp. 233 !45. Scala Digital Signage Software, (2014) . In-store communication at Carrefour Belgium Scala Digital Signage Software . [Online] Available at: http://scala.com/fresh-storecommunication-carrefour-belgium/ [Accessed 17 Jan. 2016]. Soil Association (2015). Organic market shows improved growth amidst tumbling food prices (2015) [Online] Available from: http://www.soilassociation.org/news/newsstory/articleid/7805/organic-market-showsimproved-growth-amidst-tumbling-food-prices [accessed 5 th of January 2016] The Telegraph (2008). Pret A Manger founders sitting pretty (2008) [Online] Available from: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/2784937/Pret-aManger-founders-sitting-pretty.html#di squs_thread [accessed 3 rd of January 2016] UN statistics division (2015). UN statistics division (2015) [Online] Available from: http://unstats.un.org/unsd/default.htm [accessed 8 th of January 2016] Zeng, L. (2016). Survival in the Netherlands Consumer Market . World Bank (2016). GDP per capita (current US$) | Data | Table. [online] Available at: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD [Accessed 17 Jan. 2016].

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

2)

Uppsala Stage Model (Hollensen, 2011)

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3) Porter’s Diamond Model, adaptation from (Hollensen, 2011)

3)

Beri Index charts for Western Europe

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5) BERI index chart for the Middle East

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6) BERI index chart for East Europe

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