panera bread company progress in a challenging

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Growth Approach, Alcoholic Beverage, Firms, Consumer Notion

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Panera Bread Company-Growth in a Challenging Economy

Panera Bread Company – Growth in a Challenging Economy

Precisely what is Panera Bread’s strategy? Which in turn of the five generic competitive strategies #8230; What type of competitive advantage is definitely Panera Bread trying to achieve?

Panera Bread’s business strategy was to associated with bread organization a brand identified nationally and to be a major restaurant inside the specialty bakery-cafe segment. It was to be achieved by using a business model that aimed to satisfy consumers’ needs by giving quality foodstuff in a everyday setting. Panera was able to get stable income that empowered it to offer this worth to buyers through meals sales and collection of the franchising fees. Furthermore, the management at the Panera Bread Company intended to expand the business enterprise locations simply by 17% by using an annual basis. This was being done by using a expansion technique that targeted an development of one coffeehouse per 160, 000 people by 2010 (Thompson, 2012).

This was maintained the business environment within that this company operated. It had a 5% expansion in 2006 thus making it is business technique compatible with industry conditions. Due to its operations within a competitive environment, Panera skilled threats via low cost and differentiated items. In order to make utilization of buyers who have wanted great meals at affordable prices, Panera applied the best expense provider strategy. The usage of the best expense provider approach and its devotion to offering food that customers may trust catapulted Panera to success. However , the competitive nature from the industry could not allow the strength of its strategy to get a competitive edge. It was through the best price provider strategy that Panera was able to get a market share of 0. 5409%, which converted to $345 billion twelve-monthly sales inside the restaurant sector (Thompson, 2012). Evidently, this is a significant market share considering the nature with the industry. Consequently, Panera produced strong financial position, which allowed it to manage the competition. Therefore , Panera’s strategy could be considered effective mainly because it played a task in the regarding the business as well as the acquisition of new clientele.

Intended for the useful area tactics, Panera’s marketing strategy had three main projects. One of the initiatives focused inside the creation of awareness regarding Panera throughout the provision of quality crave-able food that may be trusted by simply customers. Additionally , the approach involved improving the benefit of its bakery-cafes as gathering places for customers. In the second initiative, primary was in creating awareness as well as the trials of Panera at various meals times as the third project aimed to support the customers’ perception of Panera being a favorable means to fix dinner. In an effort to strengthen it is marketing strategy, Panera avoided the hard-sell advertising but instead opted for a mild approach wherever consumers are permitted to experience the brand by themselves. This kind of marketing strategy was successful as it was noted with all the strong financial performance at Panera.

The production and syndication strategy for Panera involved the use of economies of scale and centralized operations for the dough producing. In total, 17 regional new dough services were logically placed to serve over the thousand Panera bakery-cafe spots. The centralized operations added in the regular production of quality bread. Ideally, Panera’s production strategy supports the intentions of being better than different bread restaurants and by having products that might entice clients to come back. This kind of production strategy in Panera was strong and effective since it backed other firm strategies.

Panera has exclusive franchise system where every single franchise permit served by least 15 bakery-cafes to be opened in a period of six years. The applicants that can meet this criterion are thought for license by Panera. It was also a requirement for the applicants to acquire at least net worth of $7. 5 million and resources essential for the growth of 15 locations, an experience to operate a restaurant, top marks commitment to market Panera’s manufacturer and traditions.

2 . What does a SWOT analysis of Panera Breads reveal regarding the overall elegance of the situation? Does the company have any primary competencies or perhaps distinctive expertise?


Panera has demonstrated its capability to build a dedicated clientele. More than 81% of its clientele showing all their willingness to test out the multiple meal instances at Panera. Its growth strategy is usually strong and attainable since indicated in the expansion technique (Hitt, Ireland in europe Loskisson, 2007). The budget for Panera shows an optimistic performance specifically due to the deficiency of any long-term debt. Through research and development put together with product advancement, Panera provides managed to maintain high quality foods that appeal to new customers and contribute in their retention.

Weak points

Panera hasn’t fully applied its potential in advertising strategy. The corporation is also found in some regions leaving away many consumers from selected areas un monitored. In addition , the frequent diners at Panera only visit the restaurant for just one meal per day.


Lifespan cycle in the market is still growing and therefore the company has a chance to expand. Additionally, there are large numbers of small potential buyers in the industry where company could get more clients for enlargement plans (Hitt, Ireland Loskisson, 2007). Additionally it is likely that buyers will be willing to try out the new eating places and hence clients will be available to get the new restaurants.


The lower switching costs has also generated low buyer loyalty. For customers who aren’t ready to check out the existing rates at Panera, the replace products from the other companies might be convenient as a result of low prices. Due to increased competition from the competition, any slack in quality delivery will certainly lead to customers going to competitors. Furthermore, the steep learning curve needs Panera to test out new products that sometimes might not impress absolutely free themes.

3. What is your appraisal of Panera Bread’s financial efficiency based on the information in case Shows 1, 2, and 7? Panera’s the latest financial efficiency

Panera has displayed a reliable financial overall performance since 2002. The total revenue recorded in 2002 was $282, 240, 000 even though the same elevating to $1, 542, 529, 000 this season. Similarly, there operating profit has also been constant over the years exactly where in was $3, 401, 400 in 2001 and $185, 069, 000 in 2010. With the elevated profits, the main beneficiaries have been the shareholders. For instance, the internet income to share holders in 2002, 3 years ago, 2008, 2009 and 2010 were $21, 300, 500, $57, 456, 000, $67, 436, 000 $86, 050, 000, and $111, 866, 000 correspondingly. Since 2002, the value of the total assets in Panera has grown from $195, 431, 000 to $328, 973, 500 in 2010.

Although the overall income collection pertaining to Panera has become high and steady, the revenues through the franchised kept have been above the income from the company-operated stores. Relating to this, the profits collected this year were $1, 321 million from the company-operated stores and $1, 802 millions from the franchised retailers. This could be attributed to the elevated number of Panera bakery-cafes.

Pertaining to the first two sectors of 2011 financial season, Panera noted an 18% increase in product sales revenues via $743. a few million to $873. a couple of million. Also, there was an increase in the net salary in the same year by $52. 5 million to $68. your five. The growth price of the franchise-operated cafes in 2011 was above the growth level of the company-operated cafes. Because the beginning of 2011, there were more than forty new company-operated and franchised bakery-cafes. This boosted the whole number of Panera restaurants to about 1500. The management was seeking to add a hundred and five new company-operated cafes right at the end of 2011. In the 1st three several weeks of Come july 1st 2011, the stock price for the Panera Bread was around $132. 00 per reveal. This was a boost from the $101. 21 value per discuss in 12 , 2010 (Thompson, 2012). Really, the constant performance from the share prices are an indication of the solid financial position the business has been experiencing.

4. Based upon the information in the event Exhibit a few, which rival restaurant organizations appear to be Panera’s closest competitors?

According to the set of the restaurants provided in exhibit 3, Starbucks seems to be Panera’s closest rival in the restaurant market. The company has more than 14, 000 businesses operated and licensed locations in the U. S. only and more than 5, nine hundred international locations. In terms of financial efficiency, Starbucks had revenue of $10. several billion in 2010 with around retail sale of $1. you million for each and every company-operated location in U. S. (Smith, 2011). The real key menu classes for the Starbucks include the Italian-style capuccino beverages, teas, sodas, juices, and various pastries. In some locations, casse-cro?te and salads are offered. Panera’s menu also includes cafe sandwiches, hot refreshments such as espresso and tea, fruit juices, and salads. Additionally , the company has an espresso pub that offers espresso products and delicious chocolate.

The monetary performance of the Panera breads is quite outstanding. The company profits are constantly on the elevating end, one factor that clearly points out by stable budget. There is a superb improvement between these successive years. Beneath

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