Panera Bread Case Study

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Panera Bread

Louis Kane and Ron Shaich founded a bakery-café called Au Bon Pain Company Inc. in 1981. The company grew and prospered through the 1980’s and 90’s. In 1993 the company purchased Saint Louis Bread Company which had 20 locations. Between 1993 and 1997 the company expanded with an additional 100+ Saint Louis Bread bakery-cafes opening throughout the States. In 1997 the company also changed the name of all Saint Louis Bread locations outside of St. Louis to Panera Bread. 1998 the company sold Au Bon Pain Company for $73 million and focused on developing and growing its Panera Bread brand. Between 1999 and 2006 the company opened an additional 850 locations.

Key Products:
The company’s main product is their artisan bread which has only four-ingredients; water, natural yeast, flour and salt. The company offers 22 varieties of their bread. In addition, each location sells other fresh baked goods, made-to-order sandwiches and salads, soups, light entrees, and café beverages.

Company Organization Position:
Mission: A loaf of bread in every arm.
Strategic Intent: Panera Bread intends to be a nationally recognized brand name and the dominant restaurant operator in the specialty bakery-café segment. Management: Executive Chairman of the Board is Ronald Shaich. Chief Executive Officer and President is William Moreton Structure: Panera Bread Company owns the majority of their bakery-café locations but does franchise to certain individuals who meet specific and strict qualifications. Company owned locations account for about 67 per cent of all locations. Culture: Panera Bread has a commitment to providing crave-able food that people trust, served in a warm, community gathering place by associates who make their guests feel comfortable.

Generic Competitive Strategy:
Panera Bread uses the best-cost provider strategy. The company is committed to offering the highest quality products at a reasonable price. Panera Bread Company competes on the basis of producing an entire dining experience rather than attracting customers on the basis of price only. The company also determined through research that once they could attract a customer one time that the customer would be satisfied enough to become a loyal customer.

Current Strategy:
The current strategy in place is based on three intentions. The first initiative is to raise the quality of awareness about Panera Bread Company. The company will achieve this by featuring the caliber and appeal of its breads and baked goods, hammering their theme of “food you crave, food you can trust”, and enhancing the appeal of its bakery-cafes as a neighborhood gathering place. Secondly the company will attempt to raise awareness and boost the trial of dining at Panera Bread at multiple meal times. The company will achieve this by employing a range of ways to softly drop the Panera Bread name to consumers and let them “discover” Panera Bread. Then the company will attempt to convert these one-time customers into loyal customers by providing a very satisfying dining experience. Lastly the company intends to increase the perception of Panera Bread as a viable evening meal option and to drive early trials of Panera Bread for diner. The company will begin by attempting to convert their existing lunch customers in to diner customers.

Value chain activities: Assess primary activities
* Performed extensive market research including focus groups to determine customer food and drink preferences. * Tried to grow sales through developing menus, product merchandising local community charitable and promotions. * Distribution of fresh dough are through 140 temperature controlled trucks * Dough soled to both company and franchised owned, cost not exceeding 27% of retail value of product. Value chain activities: Assess support activities

* Franchised -operated cafes were required to:
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