Panera Bread Company Case Study
An analysis of Panera Bread Company’s business strategies was requested. I have evaluated Panera’s performance in regards to their competitive position in the food industry, as well as, their internal characteristics. My thorough assessment follows the restated question.
1. 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?
Panera Bread Company’s strategy is to differentiate from other fast-casual chains and full-service competitors with their quality products and attention to detail. The way Paneraachieves this is by offering reasonably priced freshbakery items, signaturesandwiches and soups in a dining environment that is esthetically pleasing. Panera also offers a wide variety of products to draw in customers throughout the day such as bagels in the morning as well as pastas, sandwiches and soups for lunch and dinner.Another way that Panera Bread differentiates from its competitors is that the breads and pastries are guaranteed fresh because they are baked in-house every day.
Panera also has an aggressive growth strategy. An example of this is their franchise agreement. When a franchise agreement is made it typically includes a requirement where the developer to open 15 bakery-cafes in a six year time period.The company works close with franchisees to broaden the market and to uphold Panera’s values and strategies. In 2010, Panera Bread Co. “had an average of six million customers patronize Panera locations system-wide each week”. (Gamble) Panera continues to grow throughout the country. They “currently have over 1500 locations in 41 US states and Canada”. (Corporate Office HQ)The bakery locations are either company-owned or franchises.
The competitive strategy that most closely fits Panera’s approach is the best-cost provider strategy. This strategy is a combination of a low-cost provider and a differentiation strategy. They aim to satisfy buyer’s expectations with their attractive attributes at a low cost. Panera has placed themselves in a segment that creates competition with both dining and fast food restaurants. Because of this,Panera has to offer highquality products that are as valued as quality restaurant food and at a price point to compete with fast food chains. The way they differentiate is by having a range of full service and self service locations where customer service is courteous, capable and efficient. (Gamble) Also, they differentiate with their wide variety of freshly baked food that is unique to market as well as being baked in their in-house bakery that is designed to be pleasing to the eye and inviting.
The competitive advantage that Panera is trying to achieve is differentiation through their high quality goods and welcoming cafes. Soups, sandwiches, and bagels can be bought in a number of places but Panera is unique because they offer freshly baked products, great service and a comfortable environment. Their competitive advantage is also their strategy.
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?
A SWOT analysis is an examination of a company’s strengths, weaknesses, opportunities and threats. The following is an analysis of Panera Bread Co:
Mismanagement in debt
Growth to more locations
Company’s expanding into market
Not a strong brand
Easy to copy
Variety of menu
Costs of products in relation to price
Company is strong financially
Food is prepared quickly
Esthetically pleasing environments
Strong customer service
Cited: Corporate Office HQ."Panera Bread Corporate Office."Corporate Offices and Headquarters.Corporate Office HQ, n.d. Web. 4 Nov 2013. .
Gamble, John E., Arthur A. Thompson, and Margaret A. Peteraf. Essentials of Strategic Management: The Quest for Competitive Advantage. 3rd ed. Boston: McGraw-Hill Irwin, 2009. Print.
Harrison, Michele. "Panera Bread Company Reports Q3 2013." Panera Bread Company. Panera Bread Co., 24 Sept 2013. Web. 4 Nov 2013. .
Rutter, Tamara. "The Motley Fool."Why Starbucks wants to be Panera 's Biggest Competitor. The Motley Fool, 21 Oct 2013. Web. 4 Nov 2013.
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