The strategy of the "Panera Bread" bakery-cafe
- What is Panera Bread's strategy? What type of competitive advantage is Panera Bread trying to achieve?
- What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? Does the company have any core competencies or distinctive competencies?
- What is your appraisal of Panera bread's financial performance? How well is the company doing financially? Use the financial ratios in table 4.1 of chapter 4 as guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Panera's recent financial performance
- Which rival restaurant chains appear to be Panera's closest rivals?
- What strategic issues and problems does Panera Bread management need to address?
- What does Panera Bread need to do to strengthen its competitive position and business prospects vis-a-vis other restaurant chain rivals?
Established in 2007, Panera Bread is a Bakery-cafés born from "Saint Louis Bread Company". This firm has quickly succeeded to become one of the leaders of the US fast-casual restaurant sector. In an industry characterized by aggressive competition, Panera Bread has adopted a competitive strategy that provides several competitive advantages. The aim of the group is to set up about 2000 cafés in 2010. The general strategy is to make good bread broadly available to consumers across US. The strategy of the marketing department was to insist on the dining experience more than on the price. The aim was to convince the consumer that when you eat in a Panera Bread bakery café, it is good value for money including high and healthy quality for reasonable prices. The marketing research knew that the customer satisfaction rate is high, and when a customer eats for the first time in a Panera Bread bakery café he will certainly come back for more. So the strategy was to get more first time diners into the Panera Bread bakery café by promoting prices, product merchandising or offering sponsorship of local community charitable events. Other marketing actions were displayed to attract customers. The strategy was to improve the appeal of the bakery café by describing them as a "neighborhood gathering place".
[...] By having these distinctive competence and core competence factors, Panera Bread has the strength of resources and the capability that rivals do not have which results in a competitive advantage. It also allows optimizing production costs which is necessary to struggle with rivals in an intensely competitive industry. These core and distinctive competencies add a lot of power to the differentiation strategy. It is important to underline that rivals would have a lot of difficulties to imitate these core and distinctive competencies as it would be both expensive and time consuming for them. [...]
[...] Moreover, by seeing the net cash used in investing activities, we can see that every year the firm use a lot of this cash to invest. So the working capital is very important for Panera bread. We have also seen that the return on investment is good and it allows the firm to think that the choice of its investments has been well made. The net increase in cash and cash equivalents have also increase a lot because they have used less cash in investing, but Panera Bread have succeeded to release cash from its activities and it is a good point. [...]
[...] In fact, the strategy is to make the experience of dining at Panera Bread, so attractive with the help of some differentiation so that consumers will be privileged to eat in a Panera Bread bakery cafe rather than in a fast casual restaurant even if it is a little bit more expensive and farther from their place. This differentiation is very hard and expensive for rivals to duplicate. Moreover, Panera Bread Company uses no preservatives or chemicals in its products. [...]