C) Case Study
Q1. How has Panera Bread established a unique position in the restaurant industry? How has this unique position contributed to the firm’s success? Do you think Panera Bread will reach its goal of becoming a leading national brand in the restaurant industry? Why or Why not? Panera Bread success to establish a unique position in the restaurant industry by repositioned their restaurant to a new category in the restaurant industry, called “fast casual”. Fast Casual captured the advantage both of the fast-food category (speed) and the casual dining category (good food). To be the “First Mover” in the fast-casual category, Panera Bread is differentiated themselves from other restaurant by adding bonus to the specialty food. The company is offering variety specialty bread along with the bagel, pastries and baked food. This unique position currently entered by the Panera Bread has a major contribution to the firm’s success. It helped the company grown from 602 company owned and franchised units in 2003 to 1450 in today. Despite the economic suffered in a difficult condition during 2008 to 2010, Panera Bread still managed to have a sales jumped up to 10.1 percent increment. These numbers reflect a strong contributed to the firm’s success. Besides that, Panera Bread is currently one of the largest restaurant chains in the United States. It serves nearly six million customers a week and has sales up to 1.5 billion in 2010. In my opinion, I think Panera Bread is able to reach its goal of becoming a leading national brand in the restaurant industry, because the company manage to indentify the needs and wants of the customers in the early stage and take action before their competitors. This helps the firm carve out a unique and favorable position in a difficult industry. Besides that, Panera Bread always keeps looking to the new innovation, not only in the variety of the food provided but also the appearances and the location of the outlet. This is important for a company to keep adapt to the changing environment nowadays to sustain itself as the leader in the fast casual category and becoming a leading national brand in the restaurant industry.
Q2) Analyze the restaurant industry using Porter’s five forces model. In what ways has Panera Bread successfully positioned itself against the forces that are suppressing the profitability of the restaurant industry as a whole? Porter’s Five Forces Model
| High| Medium| Low|
Threat of Substitutes| X| | |
Threat of New Entrant| X| | |
Rivalry among existing firm| X| | |
Bargaining power of suppliers| | | X|
Bargaining power of buyers| | | X|
The diagram above analyses the restaurant industry using Porter’s Five Forces Model. From the diagram, overall of the result shown that it is not an attractive industry to the company and there are three of the threats to the profitability. Threat of the substitutes of the restaurant industry is high due to the high availability of other choice of the customer. Besides that, the threat of new entrant is relevance high, this is because there are low capital require to enter into the restaurant industry and this lead to the level of rivalry among existing firm high within the industry. Threat of Substitutes
Price that consumers are willing to pay for a product highly depends on the availability of substitute product. Panera Bread successfully position itself against the threat of the substitutes by distinguish itself from its rivalry. Panera Bread has become nation’s bread expert to offer specialty bread to their customers. Customers are able to enjoy a fresh and quality meal in the restaurant and variety choice of the food and beverage provided by the company. Besides that, Panera Bread differentiated it restaurant from its rivalry by provide a pleasant environment to the customer. The company emphasis the neighborly atmosphere in their restaurant to make...