Panera Case Study

Topics: Financial ratios, Gross profit margin, Strategic management Pages: 7 (1826 words) Published: November 7, 2010
1.What is Panera Bread’s strategy? Which of the four generic competitive strategies discussed in Chapter 3 most closely fit the competitive approach that Panera Bread is taking? What specific kind of competitive advantage is Panera Bread trying to achieve? Panera Bread’s Generic Competitive Strategy:

Focus Differentiation Strategy (288)
-Distinctive Menu/Products
Panera Bread serves freshly baked breads with different combinations -Signature Café Design
The concept of “Panera Warmth”
Uses fixtures and materials that matches the neighborhood location G2- design
-Strategic Location
Chooses potential locations in suburbs, strip malls, and regional malls Long term Management strategy
To make Panera Bread a nationally recognized brand name and to be the dominant restaurant operator in the specialty bakery-café segment (289) Growth Strategy
To capitalize on Panera’s market potential by opening both company-owned and franchised Panera Bread locations as fast as is practical (289) •Opening additional franchises to achieve the company’s target growth (294) Marketing Strategy

To compete on the basis of providing an entire dining experience rather than by attracting customers on the basis of prices (293) •Brand awareness is built mainly by word of mouth and great dining experiences Competitive Advantage

High Quality Food
-Produces all dough in 17 regional fresh dough facilities (297) -Fresh dough making capability
-Ensures consistent quality
-Dough making efficiency
-No preservative or chemical use—only uses four ingredients(water, natural yeast, flour, and salt) •Attractive Menu
-Regularly revises the menu offerings to satisfy changing consumer preferences -Menu changes in response to seasons
-Health concerns- provide whole grain breads when customers are conscious about “good” carbohydrate •Inviting dining environment
-The concept of “Panera Warmth” (296)
-Uses fixtures and materials that matches the neighborhood location •Utilize Opportunity
-Since 2004-2005, Panera introduced catering services in order to increase its market shares (293) -At the end of 2005, the catering services generated an additional $80 million in sales 2.What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? Does the company have any core competencies or distinctive competencies? SWOT Analysis of Panera Bread (Datamonitor):

-Focuses on niche segment
-Panera targets to serve urban workers and suburban dwellers -Better control of the resources and financial performance -Easier to meet the preferences of customers
-Close relationship with franchisees
-Panera has strict requirements of its franchises
-Panera has intensive communications with the franchises to make sure all franchises are pursuing the company’s vision - Specialization in freshly baked breads
-Specialization in freshly baked breads is Panera’s competitive advantage -Improvement and innovation creates more values to the customers -Strong financial performance
-Over the five years, Panera’s financial performance is consistently at a good level Weaknesses
Smaller variety of food available
-The selection of food in Panera is small because it only focuses on breads and sandwiches •Restricted geographical area
-Panera only focuses on the North of the United States and Canada •Target market is too narrow
-The strategy of focusing on the middle level puts the company in a dangerous position when the economy turns down Opportunities
Expansion to grow to the top line
-Panera has the potential to move to the top of the fast-serving or casual dining restaurant segment •Expand outside of the U.S. region
-Besides the current states in which Panera does business, there are markets for Panera globally and domestically •Growing demand for organic and healthy products
-In recent years, consumers have become more concerned...
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