Panera Bread Company

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Panera Bread Company

Submitted to Dr. Desmarais December 17, 2011

Salem Analytics
Catherine O’Neill Yasmeen Kouki David Kirby Christopher Titus

Table of Contents
Executive Summary Macro-environment Industry Analysis i. ii. iii. iv. v. Industry Drivers Five Forces Changes to the Industry Structure and Competitive Environment Existing Rivals Competitive Capabilities Analysis Key Success Factors

Critical Issues the Industry Faces Panera Bread Company’s Competitive Capabilities i. ii. iii. iv. v. vi. vii. viii. ix. Appendices i. ii. iii. iv. v. SWOT Matrix Stakeholder Matrix Financial Ratios Financial Trend Graphs Responses to Questions Not Answered in the Presentation Business Strategy Functional Area Strategies Assessment of Panera Bread Company‟s Strategic Performance Resources Value Chain Assessment of Panera Bread Company‟s Financial Performance and Capabilities Strategic Issues Panera Bread Company Faces Management‟s Values Organizational Culture

Executive Summary: Our consulting team completed an analysis of Panera Bread Company mainly focusing on the opportunities and threats within the industry, Panera‟s competitive capabilities, and the company‟s strengths and weaknesses. The following recommendations contain the opportunity or threat within the industry, the strength or weakness that allows Panera to pursue or defend against the critical issues and the tools needed to take immediate action. We recommend that Panera Bread Company: 1. Open cafés in untapped markets, and focus on utilizing franchising to achieve the desired 1:160,000 café: person ratio by 2010. We found that the restaurant industry life cycle is still in growth. This growth coupled with Panera‟s strong franchising capability offers a significant opportunity for Panera to pursue. To achieve this Panera must first use the current site selection and market analysis processes to chose ideal locations for new cafés in untapped markets. Panera should also utilize this process to assess the logistics necessary to support the potential locations. Next, Panera needs to utilize the established, stringent franchisee selection criteria to identify candidates that are a good fit, and then work with the selected franchisees using the existing franchise assistance programs to educate and train franchisees in Panera‟s unique brand, vision and culture. Once Panera sets up franchising systems in new markets, the company should measure success by whether or not the 1 café per 160,000 people per location by 2010. Panera also must assess the new franchisees based on the historical areas of success. 2. Bolster the current promotional strategy to a more aggressive soft-sell promotional strategy while still utilizing word-of-mouth tactics to increase first-time customer traffic. We found that customers are prone to give newly opened eating establishments a trial. Panera has underutilized potential in its promotional strategy to allow customers to know of newly opened cafés. Panera can pursue the opportunity within the industry if it strengthens the current promotional strategy to promote awareness. This helps Panera promote brand awareness to become a dominant leader in the bakery-café industry. To do this, the company must begin expanding to untapped and lowpenetrated markets where customers will not know much about the company. The company must then increase excitement about these new cafés before opening by using guerilla marketing. An example of this is hiring plain-clothed personnel to circulate future and current development sites and engage potential consumers by drumming up interest in café openings. The next implementation step is to distribute coded coupons with a two-week expiration period, and an

additional coupon to be given to a friend. Success can be measured by tracking new customer foot traffic in the specific cafés and the new café‟s sales volume in the first six months. 3. Implement the “Oven Fresh, To Go” program that will increase...
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