Panera Bread Company is a leader in the “fastcasual” dining section. With over 1. 500 locations across the state. District of Columbia. and Canada. Panera offers consumers a bakerycafe experience that exudes quality. comfort. and client service. Get downing in the twelvemonth 1981 Panera was originally known as Au Bon Pain Company a bakerycafe company on the East seashore. With continued growing. the company purchased Saint Louis Bread Company. a set of 20 shops in St. Louis. in 1993 and decided to seek a new type of bakerycafe . Unlike the Au Bon Pain shops. the St. Louis shop was the first to seek the “fastcasual” dining angle. It was Panera’s belief that consumers would prefer fast dining that offered them better quality nutrient than their fastfood rivals.
The thought caught on and between 1993 and 1997 a hundred new shops were opened. and in 1997 the name of the new shops was officially changed to Panera Bread Company. The Board of Directors faced a pick sing the hereafter of Au Bon Pain Co. and St. Louis Bread Co. It was decided. due to the turning popularity of the revamped Panera shops. that the company would transition its focal point entirely to spread outing the fastcasual experience countrywide. In order to to the full prosecute this end. Au Bon Pain was sold to ABP Corp. for $ 73 million dollars. Concentrating on spread outing the trade name. Panera opens over 1. 600 new shops between 1999 and 2011. With great success in the fastcasual dining section Panera purchases Paradise Bakery and Company in 2009. adding 70 more shops.
Today Panera Bread Company’s chief challenge is keeping a competitory advantage in such a concentrated market. As a diverse and alone company Panera competes in multiple dining sections. confronting tough competition in the breakfast and “AM Chill” section with Starbucks. pastries and gourmet staff of life section with Atlanta Bread Company. and the tiffin. “PM Chill. ” dinner and takeout section with Applebee’s. every bit good as the many other rivals in these sections. Another issue confronting Panera’s growing is their limited trade name consciousness. As Panera looks to spread out nationwide they will necessitate to implement a strategic national selling run. This will work to foster their place as a top of the head fast insouciant dining trade name.
Panera Bread Co.
Panera Bread Co. has strong client trueness. top rated installations: Fortune’s Top 25. Zagat. and strong image and client service.
The failings include dependance on leased installations and trucks. limited trade name consciousness. soft selling attack. and limited hot main course options in dinner section. Opportunities Areas for chance include national enlargement. expand franchises. offer free WiFi at all locations. expand sum of locations with drivethru. spread out times frequenters choose to eat at Panera. and providing growing.
External menaces to Panera Bread Co. include to a great extent concentrated market. customers’ disposition to eat at Panera in merely one section. alterations in nutrient supply costs. and economic conditions that cause people to eat out less frequently.
Starbucks has a consistent trade name and merchandise line. they are an international trade name that has more than 5. 500 shops in over 50 states. the staff represents the trade name as one of their ain and they offer great employee benefits. and they have a big assortment of merchandise offerings. Failings
The shops tend to acquire over filled due to the little size of the shops. the merchandise monetary values are lifting which increases the hazard of losing clients. there is a deficiency of political and spiritual support. the locations in the suburban countries are scarce. and they have a deficiency of publicities. Opportunities
Starbucks could perchance hold the chance to spread out to lifting economic systems. increase the offering of different merchandises. and increase the figure of publicities and price reductions offered. Menaces
They rely on the international trade for the java beans from states such as Arabia and South America. competition from the local cafe coffeehouse and ironss such as McDonalds has increased. and in order to make concern. Starbucks must follow with international authoritiess for their production and distribution. Furthermore. Starbucks is get downing to go a luxury trade name which can negatively impact their concern because during an economic downswing. consumer disbursement normally decreases.
Applebee’s is located in 49 provinces and 15 states outside the U. S. Applebee’s is a franchise
under the company Dine Equity. this is a strength because Dine equity gives them a greater sum of resources when seeking out new things. which leads us to their 2nd strength: the ability to alter their bill of fare to suit germinating consumer demands. They presently have weight spectators points and a 2 for $ 20. every bit good as a full saloon sets them apart from some of their rivals in the fast insouciant market.
They offer a reasonably limited bill of fare. they do non hold any strong community committedness or community ties. and they besides do non hold a differentiated merchandise compared to rivals which makes it hard to stand apart from the remainder of the industry. Opportunities
Applebee’s has the chance to spread out its bill of fare into the brunch repast section. make a community feel within their eating houses and create interactions within the community by hosting events and charitable contributions. and besides develop a alone point that sets them apart from the remainder.
Menaces to Applebee’s include FDA ordinances. other eating houses that enter the market and take over portion of the market portion. and in conclusion. the consumer outlook has been altering over clip into a “dine in” mentality in order to salvage money and follow healthier eating wonts. Atlanta Bread Company
Atlanta Bread Company offers a pizza option on its dinner bill of fare in certain locations. every bit good as healthy nutrient options such as fruit smoothies. salads. and egg white replacements. contributes to the community through charitable contributions. and they offer providing services. Failings
Their locations are limited to the E seashore and southern provinces. a high sum of net worth and liquid assets are required for a individual to franchise. they have a limited breakfast drink bill of fare. and there is non a client trueness plan in topographic point. Opportunities
Atlanta Bread Company has the chance to spread out into the Western and North Western provinces. every bit good as internationally at some point in the hereafter. and they could besides develop some kind of client trueness plan.
The option to eat at place or at eating houses with similar bill of fare is an on-going menace. every bit good as weak economic conditions which tend to do consumers to pass less on dining out. and secondly. there are larger. more wellknown quickcasual eating houses at which to dine.
Fiscal Analysis: Refer to Appendix A
Starbucks has developed a assorted scheme that emphasizes on focal point distinction and bestcost supplier. The ground they have pursued this scheme is to offer their clients a different manner of java by functioning a assortment of beans and customized bill of fare. They besides focus on quality and necessitate a premium monetary value to reflect this. They are get downing to pattern in backwards
perpendicular integrating by purchasing get downing to their ain farms. From these generic schemes we see that Starbucks has aggressive growing as the market responds to their seamster made scheme.
Key Success Factors
The Following are Key Success Factors for the “FastCasual” Restaurant Industry: 1. Assortment of Food Options: Rivals within the industry offer a huge array of options for each of their dining sections. They besides offer providing services for any juncture including forenoon meetings. in office tiffins. etc. At Panera. freshbaked staff of lifes are made daily on sight and reflect both regional gustatory sensations and seasonal favourites. 2. Advanced Scheme: In this industry. rivals have an advantage when they can keep growing of 15 to 20 per centum yearly. Having a consistent growing rate allows concerns to keep reasonably predictable hard currency flows. and increases investor assurance in the concern. Additionally. the ability to franchise in order to spread out your concern can offer a battalion of benefits for rivals. Panera ensures that those wishing to open a franchise are seasoned in running franchises and have sufficient capital to set about the contract. The franchisee will frequently hold to open 15 Panera bakeshops in a sixyear period. Panera helps to vouch the success of their franchisees by working closely with them to keep quality and Concept Essence.
3. Logisticss: The usage of nearby providers can supply consistent quality. reduced costs. and better overall supply concatenation efficiency. A big sum of costs in the eating house industry come from nutrient waste and/or spoilage. and holding strong logistics operations can let
concerns to drastically cut down costs due to these issues. 4. Customer Satisfaction: Having consistent. friendly service can be the biggest determiner of whether or non a consumer becomes a accustomed diner at a specific eating house. By keeping a steady client base. eating houses can diminish costs because it is much cheaper to maintain their clients than it is to get new clients. Often. dissatisfied clients are more likely to give negative reappraisals about a concern than satisfied clients are to give positive reappraisals. Therefore. by doing certain clients are satisfied. concerns can cut down on any negative promotion that could harm gross revenues. 5. Ability to Adjust to Consumer Demands: If rivals can expect what is traveling to go of import to consumers. so the rival can obtain first mover’s advantage. This will assist increase market portion. and give them a competitory border in the market. For case. as society efforts to travel toward healthier dining options. every bit good as dining on a budget. rivals that react to these social alterations can well better concern.
Quantitative Strengths Assessment: Refer to Appendix B
Attractiveness and Porter’s Five Forces
This industry has high competition for a assortment of grounds. The nutrient industry is saturated with a battalion of different nutrient sellers. Restaurant constitutions that serve nutrient at a many times during the twenty-four hours such as breakfast. tiffin. and dinner like Panera does. still must vie with constitutions that serve merely breakfast. merely tiffin. or merely dinner. This increases the force per unit areas on a eating house to make multiple schemes for each repast section. Because competition is so intense in this industry. challengers are forced to happen ways to distinguish their dining experience from rivals by implementing happy hours. specials. eating house and bill of fare subjects. and a battalion of other tactics. The life span of a eating house is besides reasonably short which forces those in the concern to contend for their place in the market in order to remain in the concern. Menace of New Entrants: Low
The menace of new entrants into the nutrient service industry is low because of the startup capital required. high entry barriers. and the volatile economic system. The cost to get down a concern in this industry is highly high which makes investment in the eating house industry an highly hazardous venture. The high cost and the normally short life span of a eating house frequently turns new entrants off. The high cost to come in the industry is besides a barrier to entry. Additionally. the fact that there are a great figure of rivals already in the industry creates a high barrier to entry. Last. the volatile economic system makes coming into the nutrient industry really hazardous which frequently keep new concerns from seeking to come in the industry.
Menace of Substitutes: Moderate
The menace of replacements in this industry is moderate. Customers can take to alternatively eat at place or purchase breakfast merchandises at a cheaper monetary value at food market shops. Yet. eating houses do are somewhat protected against replacements because they frequently offer better quality merchandises than clients could happen at place or in the food market shop. Panera’s promise of staff of life. made fresh day-to-day with nothing preservatives or chemicals. may outweigh the cheaper monetary value of alternate. perchance unhealthy merchandises.
Power of Consumers: High
Buyer power is high in this industry for many grounds. First. there are no shift costs which allow the purchaser to travel to a different eating house or purchase a different merchandise with no punishment cost involved. Dining out is besides non technically necessary so purchasers have the power to take non to dine out at all. There are besides a battalion of different rivals that the client can take to travel to which gives the client power over facets of the industry. Many of those rivals besides sell somewhat similar merchandises. which allow the client to exchange to a different eating house if that eating house has better quality or offers lower monetary values for the same or similar merchandises. Power of Suppliers: Low
The power of providers in this industry tends to be low. Many of the merchandises on a restaurant’s bill of fare are instead general which means that they can acquire many of the same merchandises from a different provider if that provider offers a better monetary value. Furthermore. the turning size and operation of the industry gives rivals in the industry greater dickering power with the providers. Suppliers are so forced to set their operations in order to be competitory. There are besides no exchanging costs involved in exchanging providers. which lessens the power of providers. Overall. this industry is instead unattractive because competition is highly strong. entry barriers and purchaser power are high. menace of replacements is moderate. and supplier power is low. The combination of all these forces makes it really hard and dearly-won for anyone to come in the market. every bit good as financially hazardous.
Diagram of Porter’s Five Forces: Refer to Appendix C
Strategic Group Map: Refer to Appendix D
Panera Bread Co. uses a Porter’s Typology wide distinction scheme in the “fastcasual” eating house market. They offer nutrient options for six sections: Breakfast. AM Chill. Lunch. PM Chill. Dinner. TakeHome. and Pastries. Focus on quality of nutrient and the experience of the client. Quality is ensured by utilizing fresh ingredients without added steroids or additives. Bakery points are baked daily on sight. To better client experience. Concept Essence was employed concentrating on six countries. The first is to offer an appealing and choice of nutrient options that encourage consumers to eat at Panera during different day-to-day sections. Second is to offer high quality nutrient at a good value. on mean dishes range from $ 7 to $ 12.
Third. Panera works to offer a diverse bill of fare that continually looks to prove and implement new points their clients would prefer. Fourth is to hold gracious and helpful client service that improves the consumers experience nevertheless possible. Fifth. is to offer a eating house that is aesthetically delighting to guarantee the comfort of the consumer. Finally. it is Panera’s end to supply an above satisfactory experience for a consumer enough that they will non merely wish to return but take to seek out Panera Bread over the many rivals in the market.
Issues and Problems
One big job that can be seen with Panera is with the decreased rate franchises for Panera. As of 2012. 52 % of bakerycafes were owned by franchisees. However franchises have
outperformed company owned locations in footings of grosss systematically since 2002. They have besides taken advantage of utilizing longterm debt to help in raising capital compared to Panera. which has contributed to a higher return on equity. To get a franchise for the Panera a campaigner must hold a “net worth of $ 7. 5 million. liquid assets of $ 3 million. ” experience as a top eating house operator and in existent estate. The ground for this rigorous list of standards is due to the demand that a franchisee must open a figure of units. normally “15 bakerycafes in a period of 6 old ages. ” This is a symptom of the job that Panera is smothering its growing by making such a big barrier to entry for its appliers. If Panera wishes to go on its fast paced growings it will necessitate to cut down the figure of shops required of its franchisees and in bend cut down the capital demands needed by franchisees. This will let a larger pool of still successful concern forces that will be able to open a larger sum of shops to run into the demand of the Panera merchandises. Dinner Options
Another job is their restricted bill of fare. With a primary focal point on sandwiches and salad. they have limited the preferred hours in which clients would wish to travel in. With a bulk of their gross revenues coming from the tiffin section. there is a demand to farther expand into breakfast and dinner options. The efforts so far have been lacklustre as visibleness of their attempts have been low and new bill of fare options given did non hold the consequence of bettering dinner gross revenues. Competition from Local Bakeries
Customer trueness has been a primary strength for Panera. nevertheless as it expands to new locations it will necessitate to get the better of the local rivals that have a strong local market portion. Panera will necessitate to strongly put in advertisement and instill that image of “Panera Warmth” to its clients in order to successfully vie with local bakeshops.
Execution Plan Short and Long Term
ShortTerm: expand in North America. Improve quality of dining experience Longterm: nationally recognized trade name name. dominate eating house operator in upscale. speedy service dining. keep growing of Earning per Share of 1520 % . competitory advantage Do so by farther spread outing the Panera Loyalty Program
We could spread out by going a distributer of our staff of life to food market shops near our shop locations. We could besides experiment with a few bill of fare points that we could administer to grocery shops like Whole Foods or bargainer Joes whose values line up absolutely with ours. This would set up more trade name trueness and consciousness even for those who are non near our shop locations.
Beginnings of Resistance
The chief beginnings of opposition will be in the execution of new merchandise points or any promotional alterations to the company. Due to economic issues in old efforts to spread out the choice of points. franchisees may be critical of new points that could potentially spread out our client base. To cover with this quandary we will necessitate to prove the points are company owned locations foremost to hold informations to back up our new merchandises and besides with our strong showing procedure we will hold a bulk of franchisees willing to accept new points for the Panera trade name.
With an aggressive program to farther spread out out locations and with a assortment of franchise proprietors the largest ethical quandary we face are keeping our high quality ingredients. geting the greatest endowment for our locations. and functioning our community. The enlargement of bakerycafes for Panera will besides take to increase the figure of installations to provide fresh dough. to guarantee the best ingredients we will give resources to maintaining a big figure of staff to look into the quality of our merchandises. Besides with this enlargement of locations and larger applicant pool we will necessitate to supply an array of interviews to guarantee that the Panera Bread trade name image and civilization will remain consistent throughout all our locations. As in the past Panera has ever been a community constitution and with larger growing. we can give back to the clients by offering more Panera Cares locations to better function our communities.