Case Evaluation: Panera Bread
Panera Bread was founded in 1981 by two men named Louis Kane and Ron Shaich. It was originally a bakery enterprise-café by the name Au Bon Pain Company. It fist made its appearance throughout the east coast in tourist attractions such as shopping centers and airports. The company held the competitive advantage in its market and was a chain company. The two founders traveled the country to study the fast food market which they learned that their market would pull in more profit for more quality with quick customer service. Eventually made its way to St. Louis Missouri and created its self a new atmosphere of a higher-quality dinning than the fast food competitors around. Several Saint Louis Bread branches began to open across the United States and eventually was renamed Panera Bread in 1997 outside St. Louis. By 2006, 1,027 chain restaurants were open and close to 2,000 chains opened by 2010. Panera Bread had received accomplishments the highest level of customer loyalty in its market. By 2005 out of 121 companies was rated one of the best competitors in Sandleman & Associates National customer Satisfaction Survey.
Panera had set a vision to serve customers with top quality food and service. The company created a causal fine-dining atmosphere for customer anytime of the day for a break from normal activity either in or out of the restaurant. The company began seeking more locations in due to increase of revenue in by expanding their menu and hours. Doing this made the company’s objectives well met beyond performance which led to expanding franchise. It allowed franchise to expand by 17 percent and achieve 25 percent per share in growth annually for short run and long run goal. The company has changed as the market conditions demanded; The company has to out compete rivals by quality of service, environment, and food.
The strategy has been carried out form franchise to franchise with proper training, and maintaining the service and support throughout the chain by achieving strategic measure financially and strategically according to the supply, demand, and market. Using the company’ strategy- making system has allowed constructive and effective communication to allow the company to expand in numerous ways from the Board of Directors corporate prospective down to operating strategies of the franchise management. The company beautifully executed and implemented the strategy of performance as the company progress for fine tuning by looking at the company’s over all aspects of financial practices and directions.
The current challenge of Panera Bread is basically the trend of the market and production. Panera falls between fast casual restaurants and full service chains. Panera being the happy medium of the market will still fight its competitors such as Starbucks, Noodles & Company, Chipotle Mexican Grill, and other common franchise chains. Which all of these provide the same atmosphere, similar quality, and reasonable prices as Panera. Panera has always changed their menu seasonally which will keep quality in their dining. Panera provides fresh products such as breads, sandwiches, soups, and coffee to for quick service and pleasant dining experience. Although Panera provides a seasonal menu, it may help if the customers had an opinion on the menu of favorite dishes or certain days a favorite dish is served. For instance, Subway is always promoting specials. Panera’s menu prices are always consistent which would help profit growth. A mixture of specials and promotions would help lure in consumers for fresh market conditions.
Expansion of catering division is benefiting the company tremendously with profit growth. Panera Bread’s strategy is to provide customers with fresh, quality food and top customer service food in a reliable and low-cost quick- causal restaurant. One goal of Panera is PEGS (Product, Environment, and Great Service) which the company backs. Thus being said, management holds a high torch within the franchise to deliver the success. All management needs to be on their toes as if every person who walked in the door was a first-time customer. Reviews for first time visitors speak the loudest when it comes to quality service or Great Service. One rotten server can ruin a franchise reputation and eventually destroy the image of the company. By simplistic tasks such as moral scrutiny, coordinated, cohesive efforts, proactive, reactive, and deliberate on actions will build and strengthen company. Building and strengthening will allow company to compete differently, making it difficult for rivals to compete. Being able to have good strategy and outstanding strategy execution will help the company gain the competitive advantage it deserves. Factors such as the economy are a big contributor also. If commodities such as grains, coffee beans, seeds, nuts, and much more will cause prices to rise. As the economy struggles the company’s finances will struggle also.
By incorporating globalization of competition will help benefit the company through finances, suppliers, distributers, and more franchise. Suppliers will bargain to take every penny out of the company causing stress not only on the demand but on the competitive market also. Company’s often switch suppliers for substitutions because the costly market price, supply shortage, supplier leverage, quality of product, equipment, distribution, and or services. For circumstances in the market with supply and demand is always going to be a rat race in the competitive global market. Panera bread always risk potential of new rivals but by changing with the market will allow the company to develop new and innovative ideas to secure the competitive advantage.
If Panera is continually looking at the overall SWOT analysis, it should be able to target the strength and weaknesses within its market. Panera’s market will always be a consistent change due to trends of the market. Lately consumers have focused their diet amongst the gluten-free factor. By re-vamping the menu and making sure the prices are competitive yet reasonable, the company will have leverage over its rivals in the market. If Panera keeps the progress that is has successfully held for some time which they have earning the trust of million consumers; the company will succeed in the market against new rivals. Routine analysis on competition through the internal competencies will help develop a stronger management. The company’s strength has lied in the resources of the shareholders which helped develop a strong over-sight from the start; Knowing the company’s capabilities in the long run to strengthen the weaknesses of the company to provide quality products. The key goal to making the company successful and avoid failure is the routine SWOT analysis strategy that is able to target the weakness, problems, and so on within the company. Concluding, Panera Bread is doing a spectacular job internally and externally in which holds the competitive advantage within the market.