Panera Bread Company

Case Study

Panera Bread Company

By: Safat Al Mamun Rono Sabbir Ahmed Md. Safiqul Islam Md. Fahim Bin Lutfur Azam Yeasir Mohammad Mahmud Al Hasan

Company Overview
Au Bon Pain Company Founded1978 in Boston, Massachusetts Purchased Saint Louis Bread Company in 1993 Sold Au Bon Pain Division in 1999 Changed company name to Panera Bread Company As of March 27, 2012, there are 1,562 bakerycafes in 40 states and in Ontario Canada operating under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Caf names

Strategy
To provide: fresh, high quality, organic meals to metropolitan citizens. fast meals in a visually appealing, comfortable environment. meals with reduced additives or preservatives.

Product Differentiation
Panera Bread uses a market niche strategy based on differentiation; backward vertical integration.

Panera internally produces fresh dough for company-owned and franchised bakery-cafes.

Product Differentiation
This competitive strategy focuses on a small group and caters to the wants and desires of that particular group of customers

Panera Breads marketing strategy wants these customers to feel as if they are getting something better and more wholesome for the same price as they would from the companys competitors.

Panera Bread Company

SWOT Analysis

Strengths
Panera Bread is widely recognized as the nationwide leader in the specialty bread segment Panera Bread is the nationwide leader in the bakery-caf segment Panera Bread has high ratings in customer satisfaction studies A good brand name that management is continuing to strengthen

Strengths
High Customer loyalty
Menu options Signature Caf designs Operating systems Unit location strategy

Distinctive Menu
Seasonal menu changes Demographical menu changes Organic menu choices

Strengths
Extensive employee training program Extensive demographic study for new site locations Free Wi-Fi access for customers Competitive advantage from centralized dough making operations.

Weaknesses
Alcohol beverages are not part of the companys menu selection and could be a competitive disadvantage Low public awareness Lack of foreign development Market competition with specialty foods has a low market niche Lack of traditional dinner menu

Opportunities
Consumers are prone to give newly opened eating establishments a trial and would return if they experience good service Growth expansion through company-owned cafes and franchising is promising Expansion of Paneras catering business may be a way of boosting revenues Lower stringent franchising guidelines for new entrepreneurs Develop presence in foreign markets Develop a better dinner menu

Threats
The nature of the restaurant industry is fiercely competitive The restaurant business is labor-intensive, capital intensive and risky The life span for some restaurants can be very short depending on fads

Threats
McDonalds
Competition from the fast food industry leader

Subway
Offers fresh sandwiches for less

Starbucks
Direct threat to Panera Warmth

Five Forces Analysis

Porters Five Forces

Factor Analysis
Substitute products are easily accessible (eat at home, convenient stores) Economic downturn limits disposable income substitute products become more appealing. Switching costs to substitutes are low. Panera has multiple options to source each ingredient they use. Economic downturns affect on consumer eating behaviors cheaper meal at home. Over 21 direct competitors/alternative eating establishments of Panera. Many competitors are offering similar menu selections Differentiation and constant menu changes to appeal to consumer preferences. Many competitors in industry. High investment threshold to enter market

Impact

Threat of substitute products

HIGH

Bargaining power of suppliers

LOW

Bargaining power of buyers

HIGH

Competitive rivalry

INTENSE LOW

Threat of new entrants

Recommendation
Panera should advertise more readily on television especially in urban and suburban areas. They can offer online ordering for consumers who are on the go; this way they can have a high turnover rate when it comes to wait times at the locations. Work with franchisees to acquire Corner Bakery Caf!! (Franchisee locations are more profitable and provide higher ROI) Expedite expansion in Canada or International (Europe)!