4 INTRODUCTION Panera Bread® is established in 1981; The Chief Executive Officer and President is William W. Moreton;Location:Panera Bread is expanding quickly across North America, operating 1,493 company-owned and franchise-operated bakery-cafes in 40 states and in Ontario Canada as of June 28, 2011, under the Panera Bread®, Saint Louis Bread Co.® and Paradise Bakery & Café® names.
5 INTRODUCTION Mission and vision Its mission is to make great bread broadly available to consumers across the United States.The vision is to create a specialty café anchored by an authentic, fresh-dough artisan bakery and upscale quick-service menu selections.
6 INTRODUCTION Long-term Objective To make Panera bread a nationally recognized brand name and to be the dominant restaurant operator in the specialty bakery-café segment;Try to succeed by “being better than the guys across the street”;
7 Target marketUrban workers and suburban dwellers looking for a quick-service meal and more aesthetically pleasing dining experience than that offered by traditional fast food restaurants.
8 Marketing strategyTo compete on the basic of providing an entire dining experience rather than by attracting customers on the basis of price only;Capitalize on Panera’s market potential by opening both company-owned and franchised Panera Bread locations as fast as was prudent.
9 Questions 11. How has Panera Bread established a unique position in the restaurant industry? How has this unique position contributed to its success? Do you think Panera Bread will reach its goal of becoming a leading national brand in the restaurant industry? Why or why not?
10 Panera Bread established a unique position in the restaurant industry with their strategy to create a new category which is called “fast casual” in the restaurant industry.This category provided consumers the alternative they wanted by capturing the advantage of both the fast-food category (speed) and the casual dining category (good food).This new category (fast casual) make Panera Bread’s position not only unique but also it contributed to its success.
11 How has this unique position contributed to its success How has this unique position contributed to its success? Panera Bread did a lot of things to distinguish itself from its rivals, such as:Adding a bonus to the mix-specialty foodOpening for breakfast, lunch, and dinner also offer hand-tossed salads, signature sandwiches, and hearty soups served in edible sourdough bread bowls along with hot and cold coffee drinks.Providing catering services through its via Panera catering business.Suggesting a new time of day to eat specialty foods, calling the time between lunch and dinner “chill-out” time.Providing an inviting neighborly atmosphere adding to their appeal as well.
12 Do you think Panera Bread will reach its goal of becoming a leading national brand in the restaurant industry? Why or why not?Yes, Panera Bread will reach its goal because the company is counting on its unique positioning strategy, its signature foods, and savvy execution to make this goal a reality.
13 Question 2Analyze the restaurant industry using Porter’s five forces model.
14 Industry Overview Porter’s five forces: Threat of substitute products HIGHBargaining powerof suppliersLOWRivalry amongexisting competitorsBargaining powerof buyersHIGHThreat ofnew entrantsLOW
15 Porter’s Five Forces Factor Analysis Impact Threat of substitute productsSubstitute products are easily accessible (eat at home, convenient stores)Economic downturn limits disposable income – substitute products become more appealing.HIGHBargaining power of suppliersPanera has multiple options to source each ingredient they use.LOWBargaining power of buyersEconomic downturn’s affect on consumer eating behaviors – cheaper meal at home.Over 21 direct competitors/alternative eating establishments of Panera.Competitive rivalryDifferentiation and constant menu changes to appeal to consumer preferences.Many competitors in industry.INTENSEThreat of new entrantsHigh investment threshold to enter market
16 In what ways has Panera Bread successfully positioned itself against the forces that are suppressing the profitability of the restaurant industry as a whole?
17 Positioning strategyPanera Bread’s strategy is “to provide a premium specialty bakery and café experience to urban workers and suburban dwellers.”The concept is a mix between fast food and casual dining, or fast casual.By choosing this strategy, Panera is attempting to achieve competitive advantage in the unique offerings it provides, offerings that rivals don’t have and can’t afford to match.In this case, delicious handcrafted bread arriving fresh daily, served in an inviting atmosphere is the company’s competitive advantage and core competency.
18 Unfavorable Position for Everyone HighCasual DinningFast CasualUnfavorable Position for EveryoneFast FoodApplebee’sRed LobsterChili’sCarrabba’s Italian GrillPanera BreadBruegger’sChipotleCosiFood QualityMcDonald’sWendy’sBurger KingTaco BellLowSlowSpeed of ServiceFast
19 Question 3. What barriers to entry has Panera Bread created for potential competitors? How significant are these barriers?
20 Barriers to entry for potential competitors Economies of ScaleProduct DifferentiationCapital Requirements
21 Barriers to entry for potential competitors (Cont…) Cost advantages independent of sizeAccess to Distribution ChannelsGovernment Policy
22 How significant are these barriers? It is necessary to consider entry barriers when assessing dominance, when determining whether unilateral conduct might deter new firms from participating in a market, and when analyzing the likely competitive effects of mergers. Entry barriers because competition will not be reduced if new firms could enter easily, quickly, significantly.
23 QUESTION # 4What are Panera Bread’s primary sources of competitive advantage? In your judgement, are these sources of advantage sustainable? Why or Why not?
24 PRIMARY SOURCES OF COMPETITIVE ADVANTAGE  Position in the industry Brand strength Atmosphere Distinctive products Customers’ loyalty Financial Performance
25 SUSTAINABILITY OF THE SOURCES OF ADVANTAGES  Position in the industry:a.) Avoid arising of competitionb.) Success in positioning and executionc.) Positioning strategy of various restaurant chainsd.) Snack timee.) Expansions
26 SUSTAINABILITY OF THE SOURCES OF ADVANTAGES (cont.)  Brand strength:a.) Special brands and foodsb.) Fast-casual category
27 SUSTAINABILITY OF THE SOURCES OF ADVANTAGES (cont.)  Atmosphere:a.) Franchised outlets have been operatedb.) Conveniencec.) Customer attractiond.) Expansions
28 SUSTAINABILITY OF THE SOURCES OF ADVANTAGES (cont.)  Distinctive products:a.) Product differentiationb.) Offers various kinds of foods
29 SUSTAINABILITY OF THE SOURCES OF ADVANTAGES (cont.)  Customers’ loyalty:a.) Teamworkb.) Manager-customer relationship
30 SUSTAINABILITY OF THE SOURCES OF ADVANTAGES (cont.)  Financial performance:a.) Avoid threats to profitabilityb.) Increase of sales