Panera Bread Case Study Essay

INTRODUCTIONPanera cultivated cabbage is iodin of the great Ameri poop success stories of breaking trends, and shaking up the viands market with complete innovation. Not only were they roaring, but they were able to make this success while doing things their own way. Product and Service differentiation were the paints to this bakery-cafs success. Before Panera bootys creation in ___, never had a business combinationd the relaxing environment of a caf with the fresh flavor of an artisans bakery. This proved to be a gold mine for its owner and s tell apartholders, and the analysis of this period from 2001 to 2003 shows exactly why. In this analysis, we will analyse the success factors of Panera prick and explain why they were able to achieve both(prenominal) of the goals they had accomplished therefore far. We will likewise explain some alternatives and opportunities that Panera scribble may look forward to taking advantage of in the future.Panera plunders mission was to hold the bakery-caf a place the intermingled the accept atmosphere of c outee shops, the victuals of sandwich shops, and the quick receipts of closely solid pabulum restaurants. They named this type of service fast-casual eat and the term fits beca utilization of the atmosphere and whole step of service they were able to provide. Panera shekels caned 5 key consumer eat of necessity which acknow takege the followingSITUATIONAL ANALYSISCURRENT SITUATIONThe partnerships revenues rose from 350.8 million to 977.1 million betwixt 2000 and 2003 as a leave of peeled unit expansion, with 419 stores opening between 1999 and 2003. In 2000 corpse broad comparison sales and one-yearized unit volumes increased 9.1% and 12%. The egression of these devil metrics decreased in the years following with system astray comparable sales and AUVs increasing only .2% and .5%.GENERAL environsThe fast-casual eat market consists of those companies that seek to fill the gap between fast-food chains and copious-service restaurants. These companies set up speed, efficiency, in priceyness, hospitality, tonus and ambiance. These restaurants fall beneath fast casual when they offer self-service, a check between 6 and 9 dollars, slightly more than expensive than fast food but cheaper than full service restaurants. Other requirements include that the food be do to order and the dcor organism upscale. This market of restaurants experienced significant growth between 1999 and 2003. Continued growth was pass judgment with sales projected to reach 50 billion in the following decade. This growth was expected to come at the expense of fast food chains.The applications growth started with high profitability and diverse eat avenues, with concepts such as Mexican, Chinese, and bakeries. Opening comprises for these establishments in relation to annual sales was minimal, allowing more mod players to get into the market with fresh concepts and batting order items. Al so the maturing of baby boomers and their children contributed largely to the growth of the fast casual market. This demographic expressed insufficient time for cooking while growing devolve of fast food and desiring a high-quality, fresh, healthy dining experience, without the time inlet of a full dining restaurant. This market has hard-hittingly emerged itself into a decriminalize trend in the restaurant industry.Modern day nodes seek establishments that combine qualities such as a casual atmosphere, quality, and quick service. Panera sugar foc lend oneselfs on these aspects of their bakeries by offering breakfast, lunch, daytime chill-out, lunch in the evening and take home meals in alignment with consumer dining  postulate. The corporations customer base included seniors, matinee-goers, shoppers, business professionals, and students. The lodge focuses on delivering high quality foods, targeting suburban dwellers and workers as a premium specialty bakery and caf.Pane ra Bread was a pioneer in the caf-bakery segment with unique concepts and operation strengths, which has led the partnership to its current position in the fast casual dining market. The keep company de sign(a) its concept in meeting the consumers needs of efficiency and the desire for high quality dining, which bent met by tralatitious fast food chains. The company strived to establish Panera Bread as a leading national brand, with its operation quality, real estate strategies, and design macrocosm integral to their successEach company-operated bakery had computerized cash registers to collect focus of sale transaction data, used in generating marketing information. Product prices were programmed into the system from the somatic office. The companys in-store information system was designed to abet in labor scheduling and food cost management, to provide corporate and retail operation management fast access to data, and to reduce administrative time. These systems supplied data to the companys accounting department daily, enabling them to use the data to cause weekly reports on sales and other most-valuable elements. The company also monitored the average check, customer count, product mix, and other sales trends. Also, facilities had systems that allowed the scar 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 December 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 also had 4,078 part-time hourly associates at the bakeries. The companys priority was staffing its bakeries, fresh dough facilities, and support centers with practiced associates, investing in inveighing programs to ensure quality. The company offe red incentive programs and bonuses to compensated employees, with the addition of product discounts and employee occupation options. Panera Bread believed that providing bakery-caf operators the opportunity to participate in the success of the company would enable the company to tear and retain passing motivated and experienced personnel, resulting in a better customer experience.The company targets mostly those individuals in urban argonas, focusing on white neckband 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 give its target customers a stylish ambiance to dine in. Panera Breads contestation derived from sources within its trade aras. The stores competed based on consumers need for breakfast, lunch, daytime, lunch in the evening, and take home net profit sales with the combative factors being location, environment, customer service, price, and quality of products. The company also competed for leased space in loveable locations where certain 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 facility 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 secure 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 condense with a company named Bunge for its supply of frozen dough.The company also signed an agreement with Dawn Food Products to prep and deliver the frozen dough structured as a cost-plus agreement. Franchised bakerys operated under individual contracts with either 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 wide stockholders equity equaling 195,937 in December 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 $245,943 for the year.INTERNAL ANALYSISThe company out telephone wire centered almost a conceptual focus on the specialty bakery kinfolk with a focus on artisan attention bread made with all-natural ingredients. The strategies implemented by the company focus on meeting the serious consumer trends met by fast food chains, while striving for a more upscale environment. In an perspiration to make Panera Bread emerge into a nationally dominant name, the company framed its poster, operating systems, prototype, and strategies around effective competition within sub-level business targets. This helped to company to increase profits between 2002 and 2003. The unique character of Panera Breads quality in its cafs, menu options, distinguished bakery design, on with the valuable 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 rapidly 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 document intention of opening an addition 409 bakeries. The company has 8 key executive officers with extensive experience, both with Panera Bread and also with other major corporations and organizations including Starbucks, fidelity Investments, and other companies. All of these officers obtained their pos ition with Panera between 1999 and 2003. The company derives its culture from the preexistent chains of fast food and full service dine-ins. In an effort to supply consumers with a third option that combined the attributes of both of these markets, the company, by many stages of conception, effectively identified a niche within urban consumers. The company pioneered a new market segment of food service trends and finished constant growth and innovation has built a successful company. The company is structured with top management and 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. dodging FORMATIONPanera Bread has maintained its business dodging all over its sprightliness and they continue to employ a product/service differentiation strategy to sustain their competiti ve advantage as a fast-casual dining experience. This strategy has enabled them to grow very swiftly over the past 15-20 years and has accustomed them a substantial hold on the market for fast-casual dining. Panera Breads decision to employ this differentiation strategy correctly, gives them the best opportunity to gain for their target market. They are in a market where there are many ways to differentiate the products and services they provide. Buyers often perceive these differences as the product/service having value. Fortunately, few rival firms are following this explicit differentiation approach. Ron Schaich and his team were correct when concluding that this differentiation strategy would attract patrons which gave Panera Bread every reason to employ this strategy.To differentiate themselves from the likes of McDonalds, Burger King, or pizza pie Hut they focused on an extremely high quality of food products. This played into their game plan of becoming a specialty cafe a nd they continued to choose the best and most natural ingredients for their products. Every linger of bread is baked with the four ingredients, water, natural yeast, flour and salt, no chemicals or preservatives are ever used. Another practice they employ to provide archetypal class products is within their supply chain. To provide fresh dough to their locations every day, they have many regional fresh dough facilities.These facilities would go through a 48 hour process to prepare bread and beigel 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 sweet goods, egg souffls and natural anti-biotic free xanthous all to meet the customers ever changing preferences. These are the practices upon which Panera Bread has continued to provide an excepti onal distinct product line to its customers in hopes of sustaining a competitive advantage.Panera has also implemented change 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 solid 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 approximation 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. One of the great benefits that Panera Bread provides to its customers is free wireless high-speed internet and since they were one of the jump to do so, this created a competitive advantage for them.The fast-casual dining industry is in general 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 can 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 block avenues for current competitors as well as new entrants. If they can continue to stay 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 businesses and they use this size to stimulate further growth. Continuing to grow gives them the opportunity to generate more revenue if executed well with the right buyers. Revenue is eer a great reason for expansion and Panera Brea d knows this. They are one of the best in the restaurant industry at recognizing shifts in consumer preferences and being able to make the veracious adjustments to satisfy their customers. This is crucial especially in todays world where change is continuous and rapid. As Panera Bread consistently 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 track 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 growth in profits. Unfortunately, with each benefit from an alternative there is always a cost that Panera Bread may or may not be uncoerced to incur. Firstly, Panera Bread could try to vertically integrate their products. This would call for them t o pre-pack some of their bread and sandwich products and sell them in local grocery chains crossways the United States. This strategy would make their products more accessible to the general universal even where there are no Panera Bread caf-bakeries nearby. One of the key risks with strategy would be the possibility that product quality would diminish because the products are not being made fresh within the actual bakeries.The bit 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 orchestrate retail stores. This would also make the products more accessible to the general public, thus giving Panera Bread more exposure. This strategy would require Panera Bread to train managers within the retail store to be able to handle the proper preparation of their products. Lastly, the third alternative would be acquiring local cafes and transforming them into new caf-bakery locat ions. 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 conduct full takeovers, there is a risk that they could lose some of the authenticity of their products/services.