Panera Bread Case Study Essay

INTRODUCTIONPanera scribble is one of the great Ameri basis succeeder stories of breaking trends, and shaking up the f be foodstuff with complete transformation. Not only were they lucky, yet they were able to acquire this success bandage doing things their own way. Product and Service eminence were the depicts to this bakeshop-cafs success. Before Panera pelfs creation in ___, never had a affair realise the relaxing purlieu of a caf with the sporty aroma of an inventors bakery. This proved to be a gold mine for its owner and stakeholders, and the compend of this period from 2001 to 2003 shows exactly why. In this analysis, we testament examine the success factors of Panera slit and explain why they were able to achieve just about of the goals they had accomplished thus far. We will excessively explain some selections and opportunities that Panera scrape whitethorn look forward to taking utility of in the future.Panera nets committal was to pee the bakery-caf a place the mingled the welcoming atmosphere of c impinge onee shops, the forage of sandwich shops, and the quick re frolics of steady food eaterys. They named this type of work profuse- routine dine and the term fits because of the atmosphere and reference of receipts they were able to suffer. Panera lollipop targeted 5 get a line consumer dine take which complicate the interestSITUATIONAL analytic thinkingCURRENT SITUATIONThe alliances revenues rose from 350.8 zillion to 977.1 million in the midst of 2000 and 2003 as a solving of revolutionary unit expansion, with 419 neckcloths opening amidst 1999 and 2003. In 2000 clay wide affinity gross sales and annualized unit volumes increased 9.1% and 12%. The egression of these two metrics decreased in the years following with trunk wide comparable sales and AUVs increase only .2% and .5%.GENERAL environsThe quick- unconcerned dine market consists of those companies that seek to fill the jailbr eak amid immediate-food bonds and dear-service eating places. These companies offer speed, efficiency, inexpensiveness, hospitality, character and ambiance. These restaurants fall under agile nonchalant when they offer self-service, a check between 6 and 9 dollars, slightly much than than expensive than fast food entirely cheaper than in force(p) service restaurants. former(a) requirements include that the food be made to state and the dcor macrocosm upscale. This market of restaurants see signifi foott growth between 1999 and 2003. act growth was expected with sales intercommunicate to reach 50 billion in the following decade. This growth was expected to surface at the expense of fast food chains.The industriousnesss growth started with spicy profitability and diverse eat avenues, with impressions such as Mexi scum bag, Chinese, and bakeries. Opening appeals for these establishments in relation to annual sales was minimal, allowing more brand-new players t o get into the market with fresh concepts and placard items. Also the maturing of baby boomers and their children contributed generally to the growth of the fast casual market. This demographic expressed insufficient cartridge clip for pro hatfularation while growing tired of fast food and desiring a high- lumber, fresh, healthy dine experience, without the time consumption of a spacious eat restaurant. This market has effectively emerged itself into a legitimate trend in the restaurant industry.Modern day clients seek establishments that combine qualities such as a casual atmosphere, reference, and quick service. Panera mark focuses on these aspects of their bakeries by offering breakfast, tiffin, daytime chill-out, lunch in the evening and take home meals in alignment with consumer dineneeds. The ships familiaritys client base include seniors, matinee-goers, shoppers, line of merchandise professionals, and students. The follow focuses on delivering high whole ste p foods, targeting suburban d swellers and workers as a allowance specialty bakery and caf.Panera scratching was a pioneer in the caf-bakery segment with unique concepts and operation strengths, which has led the society to its watercourse role in the fast casual dining market. The keep yeller-up boded its concept in coming together the consumers needs of efficiency and the desire for high quality dining, which atomic number 18nt met by traditional fast food chains. The guild strived to establish Panera sugar as a leading bailiwick brand, with its operation quality, real estate strategies, and figure of speech being integral to their successeach company-operated bakery had computerized cash registers to collect oral sex of sale transaction info, used in generating marketing information. Product prices were programmed into the system from the embodied office. The companys in-store information system was de sign-language(a) to assist in get the picture scheduling an d food cost steering, to depict corporate and sell operation management fast access to data, and to reduce administrative time. These systems supplied data to the companys account statement department daily, enabling them to use the data to collide with weekly reports on sales and separatewise important elements. The company besides monitored the average check, customer count, return mix, and other sales trends. Also, facilities had systems that allowed the dent facilities to accept electronic orders from the bakery and deliver orders to the bakeries.TASK ENVIRONMENTEmployees consisted of full time associates in administrative or general positions, commissary operators, bakers, and associates at the bakeries. As of declination 2003 the company had 3,924 full time associates, of whom 344 were employed in general or administrative roles principally at or from the companys support centers. The company to a fault had 4,078 part-time hourly associates at the bakeries. The com panys priority was staffing its bakeries, fresh dough facilities, and support centers with skilled associates, investment in training programs to ensure quality. The companyoffered incentive programs and bonuses to salaried employees, with the addition of point of intersection discounts and employee form options. Panera Bread believed that providing bakery-caf operators the opportunity to come in in the success of the company would modify the company to attract and retain highly motivated and experienced personnel, resulting in a better customer experience.The company targets loosely those individuals in urban beas, focusing on white collar workers who seek a fast and healthier alternative from fast food burgers and other common establishments of fast service. With a large focus on individuals seeking a fast, quality bakery product, the company seeks to provide its target customers a stylish ambiance to dine in. Panera Breads competition derived from sources indoors its em ployment areas. The stores competed based on consumers need for breakfast, lunch, daytime, lunch in the evening, and take home shekels sales with the matched factors being location, environment, customer service, price, and quality of products. The company also competed for hired space in desirable locations where certain(p) competitors had capital resources that exceeded those available to Panera Bread. Those primary competitors included specialty food and casual dining restaurant retailers, including national, regional, and locally owned concepts.Panera Bread had a fresh dough ease system that supplied fresh dough to the company owned and franchise operated bakeries daily. The company had 16 commissaries that prepare the fresh dough. These commissaries assured product quality and consistency, headed by the companys master artisan baker, Mile Marino, who has been with the company since 1987. The company also entered into five year contract with a company named Bunge for its br ing of frozen dough.The company also signed an agreement with Dawn Food Products to prep and deliver the frozen dough unified as a cost-plus agreement. Franchised bakerys operated under individual contracts with two the company distributor or other regional distributors, with three companies serving as the primary distributors for Panera Bread. The company has had increasing stock holders equity between 1999 and 2003, with its most recent total shareholders equity equaling 195,937 in celestial latitude of 2003. Total incurred liabilities of the company equaled $46,235 in December of 2003 which made for a total liabilities and stockholders equity of $245,943for the year.INTERNAL ANALYSISThe company strategy centered virtually a conceptual focus on the specialty bakery category with a focus on artisan care scrawl made with all- immanent ingredients. The strategies utilise by the company focus on meeting the important consumer trends met by fast food chains, while striving fo r a more upscale environment. In an effort to retain Panera Bread emerge into a across the country dominant name, the company framed its menu, in operation(p) systems, prototype, and strategies around effective competition inwardly sub-level business targets. This helped to company to increase mesh between 2002 and 2003. The unique character of Panera Breads quality in its cafs, menu options, distinguished bakery design, along with the rich locations of its stores contributed to its success. The company planned to combine company and franchise efforts in order to achieve its growth. Franchising proved to be a key factor in the companys success, allowing the company to expand more cursorily due to increased resources to outfit the strategies and concepts produced by Panera.At the closing of the 2003 fiscal year, the company had 429 bakeries in operation and documented invention of opening an addition 409 bakeries. The company has 8 key executive officers with extensive experien ce, both with Panera Bread and also with other study corporations and organizations including Starbucks, Fidelity Investments, and other companies. All of these officers obtained their position with Panera between 1999 and 2003. The company derives its culture from the exist chains of fast food and full service dine-ins. In an effort to bring home the bacon consumers with a third option that combine the attributes of both of these markets, the company, through many stages of conception, effectively identified a niche within urban consumers. The company pioneered a new market segment of food service trends and through constant growth and innovation has built a successful company. The company is structured with top management and display board executives establishing and updating views goals and visions for the growth and target of the restaurant chain. The company has both corporate and franchise operated bakerys that adhere to the vision and direction of company management and consumer trends. schema FORMATIONPanera Bread has maintained its business strategy over its lifespan and they tarry to employ a product/service eminence strategy to sustain their competitive advantage as a fast-casual dining experience. This strategy has enabled them to grow very fleetly over the past 15-20 years and has devoted them a substantial hold on the market for fast-casual dining. Panera Breads finish to employ this differentiation strategy correctly, gives them the dress hat opportunity to succeed for their target market. They are in a market where at that place are many ways to strike out the products and services they run. Buyers often perceive these differences as the product/service having value. Fortunately, few be firms are following this distinct differentiation approach. Ron Schaich and his team were correct when concluding that this differentiation strategy would attract patrons which gave Panera Bread each reason to employ this strategy.To differentiat e themselves from the likes of McDonalds, Burger King, or Pizza Hut they focused on an extremely high quality of food products. This played into their game plan of neat a specialty cafe and they keep to choose the best and most natural ingredients for their products. Every loaf of bread is bake with the four ingredients, water, natural yeast, flour and salt, no chemicals or preservatives are ever used. another(prenominal) practice they employ to provide prototypal class products is within their supply chain. To provide fresh dough to their locations every day, they take many regional fresh dough facilities.These facilities would go through a 48 hour process to prepare bread and bagel dough for shipment, which provides consistent quality and efficiency to all the locations. Panera Bread also found that many customers were more health conscious which prompted them to introduce a full line of whole grain breads. Other improvements that they instituted included new artisan clean g oods, egg souffls and natural anti-biotic openhanded chicken all to meet the customers ever changing preferences. These are the practices upon which Panera Bread has continued to provide an surpassing distinct product line to its customers in hopes of sustaining a competitive advantage.Panera has also implemented multifariousness in other areas to provide their customers with a differentiated service experience. They have employed a cafe design which created one of the most comfortable and unassailable environments to dine in. This has been very successful for their strategy of distinguishing themselves and their offerings to customers. Like Starbucks, they wanted to create an environment in which consumers would identify Panera Bread as a neighborhood meeting place. As a result, patrons would continuously use a Panera Bread location for all sorts of gatherings whether they are for business or pleasure. adept of the greatest benefits that Panera Bread provides to its customers is free wireless high-speed internet and since they were one of the first to do so, this created a competitive advantage for them.The fast-casual dining industry is generally a new concept. At this point, Panera needs to sustain its leadership and competitive advantage in this industry to continue to grow and fend off competitors. One of the best defensive strategies that they bathroom employ is the leverage gained by economies of scale. With these economies they can continue to offer their products on their terms, which give them an advantage over the competition. This in turn gives them more control over the market and the suppliers in this industry. Here they can shut up avenues for current competitors as well as new entrants. If they can continue to bridle on the top of the industry they can continue to employ this defensive strategy.One of the main reasons that Panera Bread is relevant is because of its size. At this point they are one of the largest fast-casual dining bus inesses and they use this size to stimulate gain ground growth. Continuing to grow gives them the opportunity to generate more revenue if executed well with the right buyers. Revenue is always a great reason for expansion and Panera Bread knows this. They are one of the best in the restaurant industry at recognizing shifts in consumer preferences and being able to make the becoming adjustments to satisfy their customers. This is authoritative especially in todays world where change is continuous and rapid. As Panera Bread systematically strives to be a leader in product and environmental offerings,its crucial that they continue to be aware of and progress along with the changing world. Even though they can employ some of these strategies in the future, they cant lose remnant of their business model for fast-casual dining restaurants in the process.Though Panera Bread has been very successful during this period, there are some strategies which they can enact to stimulate a growt h in profits. Unfortunately, with each benefit from an alternative there is always a cost that Panera Bread may or may not be willing to incur. Firstly, Panera Bread could try to vertically integrate their products. This would call for them to pre-pack some of their bread and sandwich products and care them in local grocery chains across the United States. This strategy would make their products more fond to the general worldly concern even where there are no Panera Bread caf-bakeries nearby. One of the key trys with strategy would be the possibility that product quality would diminish because the products are not being made fresh within the existing bakeries.The second strategic alternative would be the use of mini cafes within retail stores. This strategy has already been implemented by Starbucks with their mini cafes inside of Target retail stores. This would also make the products more accessible to the general public, thus giving Panera Bread more exposure. This strategy wo uld require Panera Bread to train managers within the retail store to be able to handle the good preparation of their products. Lastly, the third alternative would be acquiring local cafes and transforming them into new caf-bakery locations. This strategy would essentially eliminate competition and create new areas where these products can be accessed. On the other hand, if Panera Bread is unable to suffer full takeovers, there is a risk that they could lose some of the authenticity of their products/services.