Panera Bread

Topics: Fast casual restaurant, Strategic management, Franchising Pages: 7 (1983 words) Published: April 3, 2014
What is Panera Bread’s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Panera Bread is taking? What type of competitive advantage is Panera Bread trying to achieve?

The driving concept behind Panera Bread was to provide a premium specialty bakery and café experience to urban workers and suburban dwellers. Its artisan sourdough breads made with a crafts- man’s attention to quality and detail and its award- winning bakery expertise formed the core of the menu offerings. Panera Bread specialized in fresh baked goods, made-to-order sandwiches on freshly baked breads, soups, salads, custom roasted coffees, and other café beverages. Panera’s target market was urban workers and suburban dwellers looking for a quick-service meal and a more aesthetically pleasing dining experience than that offered by traditional fast food restaurants.

Panera Bread’s distinctive menu, signature café design, inviting ambience, operating systems, and unit location strategy allowed it to compete successfully in five submarkets of the food-away- from-home industry: breakfast, lunch, daytime ‘‘chill out’’ (the time between breakfast and lunch and between lunch and dinner when customers visited its bakery-cafés to take a break from their daily activities), light evening fare for eat-in or take-out, and take-home bread. In 2006, Panera began enhancing its menu in ways that would at- tract more diners during the evening meal hours. Management’s long-term objective and strategic intent was to make Panera Bread a nationally recognized brand name and to be the dominant restaurant operator in the specialty bakery-café segment. According to Scott Davis, Panera’s senior vice president and chief concept officer, the company was trying to succeed by “being better than the guys across the street” and making the experience of dining at Panera so attractive that customers would be willing to pass by the outlets of other fast-casual restaurant competitors to dine at a nearby Panera Bread bakery-cafe.

Management believed that its concept afforded growth potential in suburban markets sufficient to expand the number of Panera bread locations by 17 percent annually through 2010 and to achieve earnings per share growth of 25 percent annually. Panera Bread’s growth strategy was to capitalize on Panera’s market potential by opening both company-owned and franchised Panera Bread locations as fast as was prudent. So far, franchising had been a key component of the company’s efforts to broaden its market penetration. Panera Bread had organized its business around company-owned bakery-café operations, the franchise operations, and fresh dough operations; the fresh bread unit supplied dough to all Panera Bread stores, both company-owned and franchised.

Panera Bread competes on a Broad Differentiation strategy. This is a strategy seeking to differentiate the company’s product offerings from rivals’ in ways that will appeal to a broad range of buyers. Some examples that this company offers under the Broad Differentiation strategy is fresh dough making capability, consistent quality and efficiency, more economical to concentrate the dough-making operations in a few facilities dedicated to that function, dining atmosphere, free WI-Fi, competing successfully in five submarkets, and considerable willingness of customers to try dining at other parts of the day. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? Does the company have any core competencies?

Strengths:

Location: Placing them in strip malls and urban neighborhoods. Successful in 5 submarkets such as breakfast, lunch, day time, chill out, light evening fair and take out. The way that they have set up franchising was a strength for them as a corporation.

My Panera Rewards: Building relationships with loyal customers will be essential for improving sales. Its reward...
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