Panera Bread Company in 2011- pursuing growth in a difficult economy
Louis Kane and Ron Shaich started a bakery-café, Au Bon Pain Co., Inc. in 1981. The company grew and between the 1980’s and 1990’s became the top bakery-café operated company. Ron Shaich, along with fellow team members traveled around the country studying different fast food markets. They liked what they saw and realized that Au Bon Pain could be constructed in a way to offer an exceptional dining experience. Au Bon Pain’s Saint Louis Bread locations were changed to meet this new dining experience. They had a vision, as stated in the case, “to create a specialty café anchored by an authentic, fresh dough, artisan bakery and upscale, quick-service menu selections.” Sales grew for the Saint Louis Bread units and over 100 more units were opened. In 1997 Panera Bread took the name for Saint Louis Bread bakery-cafés that were located outside of St. Louis. In May of 1999 Au Bon Pain sold their bakery-café section to the ABP Corp., resulting in a new company name, Panera Bread Company.
Panera Bread’s broad differentiation strategy appeals to a wide cross-section of consumers in the fast-casual restaurant market. Panera has remained extremely active in their differentiation techniques by continually adapting to consumer needs as well as offering products competitors lack. Panera has a market growth rate of 3.3% which is supposed to grow faster than full-service restaurants, making the fast-casual restaurant market a growing industry.
After conducting a thorough analysis of the fast-casual restaurant industry, Panera Bread’s competitors, and Panera Bread as a whole we have developed two recommendations that will enable Panera to expand and get the most from their catering division and increase their market size and growth rate. Our recommendations for Panera’s following course of action are: *
Recommendation 1: Capitalize on Catering Potentials *
Recommendation 2: Pursue a Strong Marketing Strategy
The above recommendations are detailed in the following section. The fast-casual restaurant industry is a highly competitive across rivals, new entrants and substitute products. With these forces, it is imperative to establish strong competencies and competitive advantages to stay profitable. With the fast-casual dining options all being based around the same price range, the goal of keeping your customers from going somewhere else becomes extremely competitive. These fast-casual restaurants must place a great deal of importance on the overall consumer experience, as well as the ability to respond to shifting consumer trends. Recommendation 1: Capitalize on Catering Potentials
Panera introduced catering in 2004-2005 to reach a new target market of consumers. They wanted to get in the workplace, school, etc. market. Catering is important to Panera’s sales without investments in more locations. Panera put up a menu on their website in order for viewers to see that there was a catering coordinator. Having a catering coordinator for consumers contributes to an overall positive experience as noted in the key success factors (ex. 4). This strategy also allowed consumers to see the catering availabilities such as boxed meals or order quantity. Panera was able to quickly adhere to the evolving market this way, which is a key success factor (ex. 4). In 2010 Panera hired more staff and a training program, which increased catering sales 26 percent overall. The catering business grew so quickly they launched an online catering system just for catering consumers. In the weighted competitive strength analysis (ex. 7) having the customer coordinator available could strengthen the customer service capabilities in relation to competitors. When analyzing the dominant economic features (ex. 1), growing the catering part of the company can help the growth rate. Expanding in commercial establishments will help the rate grow 6.2...
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