The driving concept behind Panera Bread is to provide a premium specialty bakery and cafe experience to urban workers and suburban dwellers. Panera Bread’s distinctive menu, signature cafe design, inviting ambience, operating systems and unit location strategy allowed it to compete successfully in five submarkets of the food away from home industry: breakfast, lunch, daytime “chill out”, light evening eat in or take out, and take home bread.
In his letter to shareholders, in the company’s 2005 annual report, Panera chairman and CEO Ron Shaich said: “we think our continued commitment to providing crave-able food that people trust, served in a warm, community gathering place by associates who make our guests feel comfortable, really matters. ” Panera’s target market are urban workers and suburban dwellers who are looking for quick service meals and a more aesthetically pleasing dining experience than that offered by traditional fast food vendors. The competitive strategy which most closely fit the competitive approach of Panera Bread is the broad differentiation strategy.
Panera Bread Essay Example
Panera Bread is seeking to differentiate its products from its rivals’ in a way that will appeal to a broad range of buyers. The key success in this strategy is to find ways to differentiate its product line and create value for its customers, according to a unique and innovative approach. Panera is trying to differentiate themselves with their pricing, food quality, menu theme, signature menu selections, dining ambience as well as with their restaurant atmosphere, service, convenience, and location. A successful differentiation strategy allows an organization to set a premium price, be profitable, and gain brand loyalty from customers.
Panera Bread is among the companies that are attempting to succeed through differentiation by performing extensive market research, including the use of focus groups to determine customer food and drink preferences and price points. The specific kind of competitive advantage that Panera Bread is trying to achieve involves striving to build a competitive advantage based on their triple combination; Product, Environment and Great Service (PEGS). They are also competing on the basis of providing an entire dining experience rather than by attracting customers on the basis of price only. Their main bjective is for customers to view dining at Panera as being a good value, meaning high quality food at reasonable prices so as to encourage frequent visits. Their management department also claimed that the company’s fresh dough making capabilities provided a competitive advantage by ensuring consistent quality and dough making efficiency. According to them, it was more economical to concentrate the dough making operations in a few facilities dedicated to that function than it was to have each bakery cafe equipped and staffed to do all of its baking from scratch. 2- SWOT analysis of Panera Bread Strengths: Good Brand name. • Attractive and appealing menu • High ratings in customer satisfaction • Nationwide leader in the baker cafe segment • Good franchisees performance • Fresh dough: is Panera’s distinctive competence which is a valuable activity that a firm performs better than its competitors They are really hard to copy • Good financial returns • High quality of food • No long term debt • Sponsorship of local community charitable events • Well experienced in bread making: is Panera’s core competence, it is an activity central to a firm’s profitability and competitiveness that is performed well by the firm.
Weaknesses: • Franchisees stores higher than company owned stores • Less known brand name compare to rivals like Starbucks and Applebee’s Threats: • More competition from other chains • New comers or rivals could offer the same menu Opportunities: • International expansion • Research and development • Marketing, sales and service activities • Open more stores 3- According to Exhibits 1, 2 and 8 we can say that Panera is growing quite quickly and is performing well, although not outstandingly. The table below shows some high value of compound growth rates, most importantly for the total revenues.