Pret A Manger has been one of the UK fastest growing business since going global in the early 2000s
Pret A Manger has been one of the UK fastest growing business since going global in the early 2000s. Pret A Manger was founded by two College friends Sinclair Beecham and Julian Metcalfe in 1986 after struggling to find tasty lunchtime food to eat on the go and they opened first Pret a Manger store in Victoria Station. Pret A Manger foray into international business after McDonald bought 33% of the company and globalized the business by opening the first Pret A Manger store in New York USA. McDonald has since sold its stake in the business, but Pret A Manger continues to expand in both home and abroad, which includes Japan, China, France and Hong Kong. Pret A Manger still makes most of its revenue from the UK.
What is globalisation? Globalisation has proven notoriously tough to outline, and many authors have described globalisation as a set of processes through which the world is becoming a single space’ (Chirico, 2014, p. 8) and as a trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies (Wild and Wild, 2014, p. 31). Ohmae (1990) summarised this when he talked of a borderless world. Globalisation can be characterized by four factors; the growing worldwide interconnections, rapid, discontinuous change, increased number and diversity of participants, as well as growing complexity (Parker, 2005). In summary “Globalisation is the worldwide movement toward economic, financial, trade and communication amalgamation”.
There are four main areas of drivers for globalisation: market, cost, government, and competition. These drivers affect the main settings for the potential of globalisation across businesses, which are mainly irrepressible by individual organisations.
One of the main drivers of globalisation has been in reverence to market forces, in which many consumer goods and services are now universally accessible, no matter geographic location or social setting. As domestic markets become more and more saturated, the opportunities for growth are restricted and expanding globally is the way most organizations choose to overcome this situation. As customers in various parts of the world increasingly demand comparable products and services, chances for scale arise through the marketing of standardised contributions. Pret A manger, in this case, explores the common needs, tastes, and preferences of various countries and they understood these will vary greatly by product and will depend on such factors as the importance of cultural variables, disposable incomes, and the degree of similarity of the conditions in which their product is consumed or used.
Cost driver is another important driver of globalisation. Cost drivers hinge on the economies of the business and so it will vary for different businesses. For example in case of Pret A Manger standardise all its products globally in other to make a profit. Although Pret A Manger makes a large chunk of its profit in the UK it’s the exposure to a global market that will maximise Pret A Manger’s profit in the future, which why most companies go global. Pret A Manger main goal is to get the utmost mileage from their investment cost, which at the same time, advertising and promotion can haemorrhage across borders, so the sensible direction to go is to make the product available where consumers are going to hear or learn about it. Other cost drivers to globalization are the opportunity to build global scale economies and the high product development costs nowadays.
Relaxed trading rules and deregulated markets lead to lowered tariffs and allowed international direct investments in almost every country globally. The presence or absence of positive technical standards, trade policies, regulations, and policies. Government driver affects all other elements of a global strategy and is therefore significant in determining the global competitive environment in an industry. A few years ago, multinationals organisation like Pret A Manger would have almost completely relied on governments to negotiate the rules of global competition. In the present, however, this is all changing, as the politics and economics of global competition become more closely intertwined, a multinational organisation like Pret A Manger are beginning to show consideration to the nonmarket dimensions of their global strategies aimed at determining the global competitive environment to their benefit.