Panera Bread

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Panera Bread

Panera Bread began back in 1981. It started out as a small sandwich shop known as Saint Louis Bread. Panera Bread market expansion has growth almost double within only four years range from 1027 in 2006 to almost 2000 location in 2010. Case examined company SWOT analysis, keys successful factors and the generic competitive strategy. Company’s vision was to create a specialty café anchored by an authentic, fresh-dough artisan bakery and up scales quick-service menu selection. Panera Bread was widely recognized as the nationwide leader in specialty bread segment and rated highest in customer loyalty among other well-known quick-casual restaurant. In order to achieve its great success against countless competitors, the company had to implement many successful strategies. These strategies are including their ability to identifying the opportunities and threats, analyzing the target market, determining position in the market, adapting social trend, deciding on a growth strategy and figuring out the marketing mix.  

SWOT analysis of Panera Bread revealed number of strengths and some weaknesses for Panera about their overall attractiveness of company current situation. Some strength were around having an attractive and appealing menu, with item that getting customers’ attention. One of the items of course is the artisan bread, the signature product. Panera’s strength is that their core competence surround around bread baking, which is what they are known for. Other strength is a good brand name, high customer satisfactions studies, and success in catering and good franchisees. The company’s financial strength allows them to grow without taking on too much debt. One of Panera competitive strengths is customers’ loyalty. In 2003, under a study conducted by TNS intersearch, Panera Bread scores the highest level of customer loyalty among other quick-casual restaurants. Repeat customers allow Panera to better sustain market opportunity and revenue. In addition, Panera created “My Panera” program to help track down repeat customers’ buying habits, which has helped the company tailor its offerings and gain more customers. Moreover, Panera is strong in learning curve, which derive its strategies to effectively compete in such a competitive market as restaurant industry. For instance, Ron Shaich and executive team spent substantial time study its major competitor including McDonalds’, Wendy’s, Burger King, Subway, Taco Bell etc. In such experience, Panera executives are able to study competitor competitive strengths such as “Starbucks” which influenced Panera’s strategy in focus on providing distinctive and engaging environment (Panera warmth), customer service good atmosphere and access to Wi-Fi that already proved success by Starbucks coffee. Fresh and quality food is a distinctive characteristic of Panera products. Another competitive strength of Panera is its rapid market penetration; Panera growth strategy was to capitalize on Panera’s market potential by open company-owned and franchised location. A Panera Bread franchise strategy was to enter into franchise agreements that required the franchise developer to open a number of units which typically 15-bakery café within six years. Although Panera invested higher cost in providing fresh products such fresh dough to its regional stores, they are good at maintain economic of scale that enable company to continue makes profits.

At the same time, Panera does have some weaknesses. Although their brand is known, it is not as well known as other rivals, such as Starbucks, subway, McDonald, and Applebee’s. In comparative U.S market penetration of selected restaurant chain in 2006, Panera bread still has the smallest market penetration, 910 location compared to major rivals mentioned earlier. Panera only account for only 4.5% of opened stores compared to subway and about 12% of Starbucks Stores. Another weakness is accessibility to supply and mini cost. Panera bread...
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