Case 5.1 Panera Bread: Occupying a favorable position in a Highly Competitive Industry
Finance and Investment
Mr. Tang Jut Weng
Date of Submission
8th March 2013
1. Chan Shi Yoon
Q1. How has Panera Bread established a unique position in the restaurant industry? How has this unique position contributed to the firm’s success? Do you think Panera Bread will reach its goal of becoming a leading national brand in the restaurant industry? Why or why not?
A unique positioning meaning that you are able to prove that your product is truly special compare to others. Besides, a goal is an observable and measurable end result having one or more objectives to be achieved within a more or less fixed timeframe (Business Dictionary, 2013). Meanwhile, a national brand is a product that distributed, sold and known nationally. Panera Bread had established a unique position in the restaurant industry with their strategy to create a new category which is called “fast casual”. This position that established by Panera Bread allowed it to capture the advantages of both fast food (speed) and casual dining (good food).This unique position had provided Panera a distinct point of differentiation between itself and many of its competitors in the same industry. Besides, it also allows the company to sell a fairly large volume of high margin food products. Panera had done a lot of things to distinguish itself from other competitors. For example, adding a bonus to the mix-specialty food and opening its restaurant for breakfast, lunch, and dinner are some ways to distinguish Panera from other restaurant. Moreover, Panera also created new menus to attract customers’ interest. It offer hand-tossed salads, signature sandwiches, and hearty soups served in edible sourdough bread bowls along with hot and cold coffee drinks for its new menus. Panera Bread also put in its effort by providing catering services through its Panera catering business and suggesting a new time of day to eat specialty foods, calling the time between lunch and dinner “chill-out” time. In addition, Panera also provides an inviting neighborly atmosphere adding to their appeal as well. Panera Bread had increased its food quality and the speed of serving which increases its profitability and its turnover. This makes Panera’s business more profitable than its immediate competitors such as Bruegger’s, Chipotle and Cosi. Therefore, from all the effort shown, it is clear that this unique position had contributed to Panera’s success. Hence, I think that Panera Bread will reach its goal because the company is counting on its unique positioning strategy, its signature foods, and savvy execution to make this goal a reality. Besides, from what had the industry expert T. J. Callahan said, we knew that the social trend of US is changing towards fast casual category. For instance, it will improve the growth of Panera’s business and help in achieving its goal.
Q2. Analyse the restaurant industry using Porter’s five forces model. In what ways has Panera Bread successfully positioned itself against the forces that are suppressing the profitability of the restaurant industry as a whole?
Porter’s five forces model named after Michael E. Porter (Investopedia, 2013). This model identifies and analyzes five competitive forces that shape every industry and helps determine an industry’s weakness and strengths (Investopedia, 2013).
For restaurant industry, the threat of substitutes has medium impact. Since the substitute products are easily accessible, for example, customers can choose to dine at home or at convenient stores, therefore it is easy for consumer to outsource for replacement. The economic downturn had limited the disposable income. Hence, substitute products become more appealing.
References: AllBusiness, 2013, Business Definition for: national, viewed 3 March 2013, .
Business Dictionary.com, 2013, Goal, viewed 3 March 2013, .
Investopedia, 2013, Porter’s 5 forces, viewed 3 March 2013, .
Investopedia, 2013, Competitive Advantages, viewed 3 March 2013, .
Mind Tools, 2013, Porter’s Five Forces, viewed 3 March 2013, .
OIRA, 2013, Defining Goals and Objectives, viewed 3 March 2013, .
$uccess, 2010, Unique Positioning – Standing out From the Competition – Marketing Tips, viewed 3 March 2013, .
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