Case Study Panera Bread

Synopsis
Panera Bread is a casual made-to-order fast food restaurant that offers specialty breads, sandwiches, tossed salads and soups. Established in 1981, with 1,562 company owned and franchised locations, Panera Bread has moved into the forefront of the restaurant business, and has strategically penetrated the market while acquiring a robust amount of loyal customers. Most of the restaurants offer the choice of indoor and outdoor dining. A fireplace inside the restaurant is appealing to many customers during the winter months, of whom are looking for a hot cup of coffee and a place to read their newspaper or book.

Coffee, tea, and soda are offered with free refills, and water with lemons is complementary. Indoor tables, free refills, and comfortable tables/chairs make Panera Breads establishment a functional study place for college kids. Every restaurant is well staged with elegant displays of their specialty baked products, making it nearly impossible not to indulge. This fast growing restaurant has maintained a competitive edge due to their appealing interior design, neutral dining environment, fresh baked goods, fresh coffee and tea, made-to-order foods with possible drive-through capabilities, customer rewards card, tables equipped with electrical outlets, and efficient service.

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Panera Bread establishments, undoubtedly, offer an experience that can only occur at Panera Bread.

Resources

Panera Bread has a driving concept to provide a premium specialty bakery and café experience to urban workers and suburban dwellers. Attractive & appealing menu
Nationwide leader in the bakery-café segment
High ratings in customer satisfaction studies
Good brand name
Fresh dough operations & sales to franchised stores
Initial success in catering
Good franchisees – higher sales in franchised stores compared to company-owned Financial strength of the company – able to grow without taking on too much debt

Capabilities
Panera bread offers an upscale fast casual dining experience.

Panera operates in three business segments: company owned bakery-café operations, franchise operations, fresh dough operations. Every restaurant is well staged with elegant displays of their specialty baked products, making it nearly impossible not to indulge. This fast growing restaurant has maintained a competitive edge due to their appealing interior design, neutral dining environment, fresh baked goods, fresh coffee and tea, made-to-order foods with possible drive-through capabilities, customer rewards card, tables equipped with electrical outlets, and efficient service.

Core Competencies
Panera has created a casual but comfortable place where customers could eat freshly baked sandwiches, soups and salads without worrying about whether or not it is nutritious. The company is designed to visually reinforce the distinctive difference between its bakery-cafes and those of its competitors. Management of corporate and franchise growth, as well a deep sense of community involvement and the desire to give back to community, further solidify Panera’s placement as something different in today marketplace. Panera’s deep sense community can be seen as Panera gives away leftover bread to homeless shelters and collects money for other charitable causes such as the Operation Dough-Nation program.

Finding of Fact #1

The Panera Bread Company does not have an aggressive marketing strategy and aims to let customers discover Panera on their own. Panera’s service is not as fast as other fast-food companies and charges higher prices. Panera has higher prices than rivals, which could be due to their operating costs. Panera has expanded in the past years but the locations are concentrated geographically.

Recommedation#1
Panera has opportunities to continue their success in the fast casual industry. They can try to control operating costs that might be out of hand or unnecessary. The company should consider expanding into new markets and expanding geographically, even internationally. Products can continually be made based on current food trends. The peak hours at Panera are breakfast and lunch, efforts could be made to attract a larger dinnertime rush. I think that they should apply dinner specials so that more customers come in during that time; this would be to increase sales during dinner times. Another idea is for online ordering, for the customers on the go. This way they can have a higher turnover rate when it comes to waiting in lines. Finding of Fact #2

Panera Bread operating cost is too high.

Recommendation #2
Another thing that I would recommend Panera do, instead of making their dough at bakeries, Panera makes their dough at their stores. This could eliminate the middleman, and possibly eliminating excess materials in the process (including a reduction in transportation costs). This could potentially help their bottom line. Making low operating costs for a fast casual industry will prove successful. In an industry that has easy substitutes it is important to cut down overhead prices to make the most from your sales. Integrating vertically could cut operating costs making profit increase.

Finding of Fact #3

Panera Bread management needs to strengthen the company’s competitive position.

Recommendation #3
I recommend that the company focus on location to help increase their competitive position. It is a key success factor. Most consumers at a fast casual restaurant will be middle or upper class. It is important to locate these restaurants near demographic areas where many middle or upper class people can access the business. Many fast casual restaurants try to create a third place. The location of this restaurant is important because it should be placed in a central location where other commodities are surrounding it.

To stay profitable in the highly competitive restaurant industry, Panera regularly reviews and revises their menu to sustain the interest of regular customers, satisfy changing customer preferences, and be responsive to various seasons of the year. Panera develops an advantage in changing their menu over competitors such as McDonald’s and Subway who do not change their menu frequently and customers often lose interest in their menu offerings.

Works Cited

Wheelen, Thomas L. and J. David Hunger. Strategic Management and Business Policy Toward Global Sustainablity. Upper Saddle River: Prentice Hall, 2012.