As you walk through the doors of Panera Bread, the lighting and décor calm you while the fresh smells of the bakery envelop you. Every detail has been carefully coordinated to ensure a high quality dining experience at a reasonable price. This sophisticated concept for Panera began when a cookie company and a fast casual restaurant, called Au Bon Pain, synergized their efforts and found a propitious niche between fast food and fine dining (Repetti & Vincelette, 2005). By 2003, the company was able to generate significant revenues through company-owned stores, through the sale of fresh dough to franchisees, and through royalties and fees paid by franchisees (Repetti & Vincelette, 2005). In an effort to ensure success of Panera’s strategic …show more content…
In fact, franchised operations quadrupled from 1999 to 2003 and outnumbered company-owned Panera locations (Repetti & Vincelette, 2005). Finally, Panera’s fervent focus on their financial strategy gave the company a competitive advantage. The decision to sell Au Bon Pain allowed Panera Bread to entirely eliminate their debt and gain capital for future store openings (Repetti & Vincelette, 2005). Another smart financial decision the company made was their imposed franchise fees and strict requirement that all franchisees purchase dough directly from the company’s fresh dough facility (Repetti & Vincelette, 2005). Therefore, Panera was able to not only generate revenue from company-owned stores, but also had a steady revenue flow from their franchised stores. In order for Panera to experience endured success in their new strategic direction, I propose that the company pursue a strategy that emphasizes growth, seeks to enhance the customer experience, and reinforces their financial control. Panera should continue its rapid growth through franchising. Though franchising can create problems for the franchisor with issues such as poor management, it is the one of the most rapid ways to grow a business without having to provide direct capital (Cavaliere & Swerdlow, 1988). This aspect of their operations strategy must be meticulously managed and franchisee applicants should be carefully selected to ensure that the franchisees are upholding the
Another organizational crisis arose in 1995 when efforts to expand the Saint Louis Bread chain in order to increase brand awareness backfired as consumers favored Saint Louis Bread over its parent company. To solve this conflict, new divisional presidents were created for each chain, and in 1999 Shaich convinced the board of directors to sell all the Au Bon Pain cafes and restructure the Saint Louis Bread chain under the name Panera Bread. Panera’s current organizational structure utilizes vertical integration, with 17 fresh dough facilities that deliver to 1,591 cafes and franchises (“Our History”). Upper level managers now make menu and pricing decisions and overlook the marketing, franchise, concept development, legal, technology, supply chain, and human resource departments (“Organizational Chart”). Lower level
A key aspect of Panera Bread’s business that protects the company from direct competition in the fast food industry is their product niche, artisan fast food. Fast food chains are often criticized for offering unhealthy foods. But, Panera Bread focuses on a higher nutritional value in their products. Dine in restaurants are very susceptible to drops in consumer spending, so Panera Bread’s
The focal point of this is essay is none other than Panera Bread. Louis Kane and Ron Shaich established a bread kitchen bistro called Au Bon Pain Company Inc. in 1981. The organization developed and succeeded through the 1980's and 90's. Saint Louis Bread Company was purchased in 1993 by the association the company already had 20 different locations that covered vast areas of Saint Louis in the first place. Saint Louis Bread Company was at first established by Ken Rosenthal. In May 1999 Panera Bread ventured into a national eatery, Au Bon Pain Co. sold their different chains including Au Bon Pain, which is currently claimed by Compass Group North America. Panera moved its central command to another area in Richmond, Heights Missouri in 2000.
Expanding the target market of Panera Bread is a good growth opportunity for them. This can be achieved by product line (menu options) extension or by entering international market outside the American continent so as to increase their geographical coverage. In addition, Panera has an opportunity to get additional market and growth by adapting rapidly to changing market and customer preferences. They need to advertise and market themselves as a healthy option for eating out. Health oriented food or food that are low in calories, sugar, cholesterol, etc. is getting very important as people started becoming very health conscious and selective. Their effort to roll out new products with fresher ingredients such as antibiotic-free chicken needs to be further expanded. Recognizing the health risks associated with transfat, Panera had completely removed all transfat from its menu by 2006. Organic food, non GMO, etc. They could increase number of their franchises. A number of markets were still available for franchise development. The have opportunity in front of them to open more outlets, both company-owned and franchises. They could open within North America and mainly in areas where they are not present now, and those areas where the growth potential is good, like some of the suburban markets. Many good locations for fast casual dining options are available in many of the untapped areas. Panera has a good market opportunity outside the small urban niche where greater growth
Panera Bread has established itself as one of the most popular, fast growing “bakery-café” restaurants in the United States as well as in Canada. With 1,800 locations in 45 states, the franchise appears to be unstoppable. This in part is due to the superior customer service experience that keeps customers coming back time and time again. Just to give you an example, in 2012; the most recent year that data is available, Panera Bread brought in an astounding $2.13 billion in revenue, about $1 billion more than its revenue in 2008.
Panera Bread is one of the great American success stories of breaking trends, and shaking up the market with complete innovation. Not only were they successful, but they were able to achieve this success while doing things their own way. Product and Service differentiation were the keys to this bakery-café's success. Before Panera Bread's creation in ___, never had a business combined the relaxing environment of a café with the fresh aroma of an artisan's bakery. This proved to be a gold mine for its owner and stakeholders, and the analysis of this period from 2001 to 2003 shows exactly why. In this analysis, we will examine the success
Over the last few decades there has been a huge change in operations. This change has occurred due to the demand for time consuming goods to be delivered faster and faster to the public. The growing population wants goods quicker and more efficiently than ever before; Panera Bread would be
The Panera Bread Company is starting 2007 with unfinished goals and missed targets previously set and a review of their strategy is in order to continue their ongoing success. The company has grown substantially since its inception in the competitive restaurant industry; however, an aggressive target of 2,000 Panera Bread bakery-cafes will require a focused strategic plan. The company has a strong base with loyal customers who appreciate Panera’s unique dining atmosphere with a focus on quality products at a reasonable price. Panera will need to continue its market research and focus on environmental issues, which are an important core value. The opportunity for
When eating the establishment, you will spend around an average of $8.50 for lunch, which isn’t far off from their competitors in the fast food market. Simple things like listening to your customers will and can go a long way. To further their connection with their customer they took a survey that showed that 82% of consumers would prefer freshly cooked eggs in their breakfast sandwiches and Panera took the initiative to give the people what they wanted. “’To compete in this business, we believe we need to have offerings that are worth getting out of your car for,’ said Panera’s Chief Concept Officer, Scott Davis” (Wheelen pg.32-14). This type of mentality will concert people into loyal customers, and once a customer is loyal to your company you have them for
It is extremely important to build you brand loyalty in this industry, whether it’s through rewards programs or unique dine-in experiences, it can make or break your business. Panera Bread Company will need to make sure that it implements a strategic strategy that separates itself from its competitors and provides a supreme food quality and dining experience.
The rivalry among competing sellers, often the strongest competitive pressure, is also fairly high for Panera in the restaurant industry. No switching costs, numerous competitors, and an increase in the availability of healthy food
Another thing that I would recommend Panera do, instead of making their dough at bakeries, Panera makes their dough at their stores. This could eliminate the middleman, and possibly eliminating excess materials in the process (including a reduction in transportation costs). This could potentially help their bottom line. Making low operating costs for a fast casual industry will prove successful. In an industry that has easy substitutes it is important to cut down overhead prices to make the most from your sales. Integrating vertically could cut operating costs
Panera Bread has an appealing set menu based on artisan ingredients that attracts clientele and provides a competitive advantage in the niche market. The company has a differentiation from competitors with bread making capability and signature products which generates a solid brand and superior customer satisfaction. The company is also financially strong as they have undergone their growth without absorbing significant debt. Weaknesses are the traits that inhibit a company achieving its mission. These faults depreciate the organizational success and development.
Panera Bread Company has a variety of strengths that make it stand out from its competitors in the market. One of these strengths that make Panera Bread Company stand out from its competitors is that it has strong brand image across the whole entire country. This strength is the foundation for many successes Panera Bread Company has achieved such as having very good financials in all regions of the country. The reason this strength is so important for Panera is that it allows for its potential customer no mater where he or she is in the country to know exactly what a great experience they will be getting when coming to dine at Panera Bread Company. This is in contrast to some Panera Brad Company’s competitors because they aren’t not known
Panera Bread is considered to be one of the U.S. most successful fast-casual restaurants. The company is one of the revolution makers in the industry of fast food, which managed to transform the traditional image and perception of to-go products that are available at an acceptable price on the market. As its initial founding company was established in 1981, Panera Bread managed to gain up to 4.5 billion USD in sales by the year of 2015, whereas the average sales per one store made up to 2.5 million USD annually (Thompson). Nevertheless, the company that once managed to upgrade bread and pastry into a trend of fast and healthy eating, today is struggling with massive competition on the fast food market. Its previous strategic strengths now became a burden that stops innovation and creativity and does not