Panera Bread Company Case Study Paine CollegeBy:Alecia Williams Daviana HarveyJordan SteeleAdriena TolbertIntroductionFood can make you feel good. Food can bring out the best of people. At Panera bread food is served in a warm welcoming environment, by people who care. Panera bread is chain of bakery, fast casual restaurants.
Panera bread is mainly located in the United States but also operates in Canada. Panera bread headquarters is located in Sunset hills, Missouri. The company was founded by Ken Rosenthal in 1987. Panera bread undertook the name St.
Louis bread when it was first founded in Kirkwood Missouri. In 1993 Au Bon Pain Company purchased the St. Louis bread company from Rosenthal.
Four years later in 1997 Au Bon Pain changed the name of the company from St. Louis Bread to Panera bread. The company operates or franchises more than 1900 bakery-cafes in about 46 states. In St.
Louis area where Panera was founded it still operates under its original name St. Louis bread. Panera Bread’s CEO is currently Ronald M. Shaich.
Panera’s strategy during the recession has been “to stay consistent and not to react to the recession”; keeping costs constant and offering new salads and sandwiches. As a result, Panera’s “fast casual” niche (between casual dining and fast food) contributes to its relative success; this positioning allowed it to avoid discounting wars and maintain its margins by attracting customers with a higher quality product perceived to be a good value for the money.In the previous 35 years, Panera has developed from one 400-square-foot treat store into an undertaking with in excess of 2,000 pastry kitchen bistros, 100,000 partners and yearly system wide offers of over $5 billion.
So what’s the key to Panera’s prosperity? It’s been our capacity to change our business at whatever point important and turn as suitable. Panera’s voyage so far has been punctuated by five noteworthy changes – every one of which situated us forever more prominent achievement. Here are the five changes that made the Panera you see today: In the 1980s, originator Ron Shaich blended his treat store with a bread shop, making Au Bon Pain Co. Inc.
Presently, he and his late accomplice, Louis Kane, perceived the capability of changing the organization from a pastry kitchen pitching croissants and bread to a bread shop bistro that utilized bread and croissants as a stage for offering upscale sandwiches. Au Bon Pain Co. Inc. turned into a traded on an open market organization in 1991 and opened several pastry kitchen bistros, turning into a commonplace apparatus in urban areas along the East Coast and abroad. In the wake of gaining 19-unit Saint Louis Bread Company in 1993, Ron acknowledged in the mid-1990s that a developing specialty of individuals needed something more than handled fast food.
He saw they were eager for an ordeal they regarded: genuine sustenance, served in a connecting with condition by individuals with confidence. In speaking to a visitor’s confidence – an acknowledgment that value, time and comfort were not by any means the only monetary forms that made a difference when individuals ate out – Ron made another specialty that would come to be called “quick easygoing” and always change the eatery business. Holy person Louis Bread Company was renamed Panera to position it for national development. In 1998, Ron established that Panera could be broadly predominant, however it would require the greater part of our assets. Thus, in 1999 the majority of the Au Bon Pain Co. Inc.
divisions were sold, and the rest of the organization was renamed Panera LLC. We at that point concentrated the greater part of our opportunity, fortune and ability on developing Panera. The 2000s established what we call our Contrarian Philosophy. Amid the go-go a long time of the mid 2000s, we kept up our consistent, taught rate of development. We put resources into the client encounter – things like outline and Wi-Fi, which urged visitors to wait – and transformed Panera into a get-together place. Amid the subsidence in the late 2000s, when most eatery organizations were abating development and ignoring the visitor encounter, we put resources into a superior visitor encounter.
The outcome: We constructed probably the most beneficial bistros in our history, took piece of the pie from contenders and our stock cost tripled. Before the decades over, there were almost 1,500 Panera bread shop bistros. Perceiving developing purchaser interest for make offerings and comfort, we’ve worked since 2010 to reposition Panera as a superior aggressive option with extended runways for development. The topics we wager on – computerized, clean nourishment, steadfastness and numerous channels of access to our items – are currently reclassifying the eatery business and we are driving in every one of these territories. Panera will hit $1.2 billion in advanced deals this year. We are the first and final eatery organization to focus on and accomplish 100% clean nourishment.
Our My Panera dependability program is the biggest in the business, with 28 million individuals. What’s more, we are driving in Omni-channel through our conveyance, providing food, Rapid Pickups and Panera at Home alternatives. On July 18, 2017, Panera was procured by JAB Holding Co., finishing its 26-year keep running as an open organization on a high note.
Panera was the best-performing eatery supply of the most recent 20 years, conveying an aggregate investor return up 86-crease from July 18, 1997, to July 18, 2017, contrasted with an under twofold increment for the S&P 500 amid a similar period. Additionally, Panera’s stock created annualized returns of 25% in a similar time period, besting even the execution of Warren Buffet’s Berkshire Hathaway. Our organization with JAB will enable us to keep settling on the long haul choices that prompt the business driving transformational work we have dependably exceeded expectations at and an ever brighter future for the greater part of our partners.
Analysis Strengths Panera has put resources into a great deal of innovation. You would now be able to buy a supper through a PC or cell phone, submitting the request from inside the store on a telephone for eating in, quickly label paths for dining in and to-go requests, and innovation strengthen for custom requests at in-store stands or through the web or portable application. This has helped them to keep a tab on the in-store activity stream for feast in and carryout clients and furthermore made administration more advantageous and quick. Panera is the primary fast food stand to evacuate a rundown of boycotted fixings freely from their menu.
A portion of the fixings incorporate counterfeit hues, flavors, and sweeteners. Panera Bread Company has made its menu in a way that it incorporates things like sandwiches, soups or pasta which are simple on the sense of taste and can be expended anytime of time. The nearness of servings of mixed greens in the menu additionally pull in solid eaters to the fast food stand. Ideal from the plan of their menu to their insides to a savvy use of innovation each choice that has been taken by the pioneers of Panera has been with the aim of supporting their upper hand and that has helped them over the long haul. Rather than taking a gander at what the client needs, Panera has taken a gander at what they disdain about fast food joints. They found that a portion of the things they abhorred were the long line at the charging work area, the failure to modify and the trouble in installments. Through the Panera 2.
0 activity, the organization looks to wipe out every one of these issues.WeaknessesPanera has backed off the quantity of new store openings over the most recent couple of years. While in 2013, the organization opened 133 new eateries; in 2014, the numbers lessened to 114; and for 2015, they have recently opened 105 and 115 new areas. This demonstrates business might back off for the organization. PBC presently has around 1900 outlets in 46 states and the organization needs to utilize the crisp batter for their heats and bread which are made in 20 offices the nation over. Dealing with the inventory network and the work is the 1900 outlets are swinging to challenge for the organization.
Panera as of late declared that they were intending to establishment around 73 of their outlets. This will turn out to be a fiasco since it will cut down their benefit and additionally act antagonistically on their upper hand against key opponent Starbucks. While different organizations are concentrating on enhancing their menu, Panera is giving innovation more significance than it merits. Faultfinders assert that this will occupy the organization from their center business which is sustenance.OpportunitiesThere is a solid propensity for westernization among Asian societies which has expanded the interest for fast food and has likewise made worldwide cooking styles more worthy.
This is expanding the extension for fast food culture in these nations where there is a gigantic open door on account of the thick populace in these regions. With more ladies in the workforce individuals want to cook less and eat out additional. In any case, they are aware of forgoing garbage and in this manner would lean toward eating sandwiches and serving of mixed greens in contrast with fast food.ThreatsSome of the major competitors of Panera Bread Company are Starbucks, Buffalo wings, and Chipotle Mexican Grill. All of these restaurants pose threats because they solely focus son selling fresh produce to their customers. Chipotle is a main threat for Panera. Recently the re-introduced the market to a freshly made creamy spicy queso dipping cheese sauce after discontinuing years ago because it wasn’t made fresh.
With this new addition to the menu it is sure to regain lost customers and those looking to add a little spice to their life, this is sure to increase sales. Statistic shows the number of Chipotle Mexican Grill locations worldwide from 2007 to 2017. In 2017, the number of Chipotle restaurants reached 2,408, up from 2,250 the previous year.Political Some variables assume a critical part in deciding the components that can affect Panera Bread Company’s long haul productivity in a specific nation or market. Panera Bread Company is working in Specialty Eateries in excess of dozen nations and open itself to various kinds of political condition and political framework dangers. The make progress in such a dynamic Specialty Eateries industry crosswise over different nations is to enhance the orderly dangers of political condition.
Panera Bread Company can nearly dissect factors before entering or putting resources into a specific market. Political soundness and significance of Specialty Eateries segment in the nation’s economy. Administration and obstruction in Specialty Eateries industry by government.
Tax collection, assess rates and motivations, and hostile to trust laws identified with Specialty Eateries EnvironmentalThe Macro condition factors, for example, swelling rate, funds rate, financing cost, remote swapping scale and monetary cycle decide the total request and total interest in an economy. While miniaturized scale condition factors, for example, rivalry standards affect the upper hand of the firm. Panera Bread Company can utilize nation’s monetary factor, for example, development rate, swelling and industry’s financial pointers, for example, Specialty Eateries industry development rate, and customer spending to conjecture the development direction of area name as well as that of the association. Monetary elements that Panera ought to consider are sort of financial framework in nations of task, what kind of financial framework there is and how stable it is. Government mediation in the free market and related Services Comparative focal points of host nation and Services segment in the specific nation.
SocialSociety’s way of life and method for doing things affect the way of life of any association in a situation. Shared convictions and states of mind of the populace assume an awesome part in how advertisers at Panera Bread Company will comprehend the clients of a given market and how they outline the promoting message for Specialty Eateries industry buyers. Social factors that authority of Panera Bread Company ought to dissect the socioeconomics and ability level of the populace Class structure, progressive system and power structure in the general public.
Entrepreneurial soul and more extensive nature of the general public. A few social orders energize business enterprise while some don’t. TechnologyOver the past couple of years, Panera has been aggressively fighting its way up the ladder with a series of investments in technology and menu offerings.
In April 2014, the fast-casual company unveiled Panera 2.0, which the company called, “an investment in the customer enabled by technology and powered by operational excellence.” Among the slew of new tech initiatives include advanced to-go ordering on a computer or mobile device, the ability to order from inside the store on a mobile device for dine in, fast-lane kiosks for dine-in and to-go orders, and customized ordering at in-store kiosks or through the web or mobile app. These rollouts allow for a smoother in-store traffic flow for dine-in and carryout customers as well as increased convenience and speedier service for on-the-go customers.In addition to Panera 2.0, the company recently announced that it would roll out delivery to 10% of its stores in 2016. Panera plans to use in-house delivery drivers instead of a third-party delivery service to ensure consistent quality and a faster delivery time.
Delivery options will be available for both small single-person orders and large catering orders.Strategic AlternativesIn our examination we have agreed that Panera Bread is completing a great job at executing its systems. They are completing an awesome activity at raising their organization’s quality mindfulness as far as their store’s condition, item and uncommon administrations. Their bistros bid to higher end clients that are searching for an agreeable domain with their eating knowledge.
Their bread shop bistro has done this adequately. Components, for example, chimneys, lounge chairs, warm lighting and a calm studious condition have moved Panera Bread in this classification. The greater part of their bread is prepared new and in house as they have been endeavoring towards giving the best quality sustenance and items for esteemed clients.
This parlor and home far from home condition is exceptionally speaking to their clients and is one of the key elements to Panera Bread’s prosperity. They have likewise done extraordinarily well as far as development and extension; their CAGR for add up to income from 2002 to 2006 was 30.9%. Nonetheless one negative that could be seen about this is the greater part of these extension eateries have been establishments as opposed to significantly organization possessed. They have space to move and keep on growing which will clearly enable their execution and benefits later on, as they too have appeared in the previous couple of fruitful years of their development. Opening 123 new bistro bread shops in 2012 alone, and 112 fresh out of the box new stores in 2011. The opening of new stores is because of the measure of money income the stores has created, while gladly having the capacity to state that the organization has no obligation.
For whatever length of time that Panera Bread keeps on creating excellent quality items they will be fruitful in an exceptionally intense and to a great degree aggressive market. While we couldn’t discover any cases or postings of Panera Bread’s piece of the overall industry they have settled them into an agreeable specialty and will hope to keep on improving upon their stores in any capacity they can. Organizations like Chipotle, Starbucks, and Einstein’s bagels are the significant rivalry that Panera bread faces. What makes this opposition intriguing is the manner by which these organizations shift. Einstein’s spotlights on bagel items while offering breakfast sandwiches and espresso, Starbucks centers around espresso items while offering breakfast sustenance’s and a little determination of heated products. Chipotle concentrates its assets on giving burritos and Mexican nourishment.
Panera has a moment advantage over these organizations as they offer quality prepared breads, soups, sandwiches, plates of mixed greens and in addition drinks. They likewise offer the coffeehouse condition, which is exceptionally speaking to numerous who are searching for quality nourishment and a studious domain. While development is imperative for them to guarantee that organization esteems and culture can stay in their diversified areas.
Wide separation methodologies rely upon addressing client needs particularly or making new needs, through exercises, for example, advancement or enticing promoting. The goal is to offer clients something that adversaries can’t or if nothing else as far as the level of fulfillment. There are four essential courses to accomplish this goal. The first is to join item qualities and client includes that lower the purchaser’s general expenses of utilizing the organization item. Panera does not take after this course viably on the grounds that they have high working expenses compelling them to increment or keep on selling their items at a high value contrasted with their opponents.
In FY2009, Panera Bread’s incomes come to $1.35 billion, a 4.1% expansion over its FY2008 incomes, while net pay rose 28% to $86 million. Working edges have expanded by more than 1% for every one of the last seven quarters, with FY2009 working edge achieving 10.4%.3 Comparable bread kitchen bistro deals development expanded by 0.
5% by and large in FY2009. However Panera’s working pay has battled and hasn’t been exceptionally predictable during that time and has bringing about the expansion of costs (Wikinvest). However with such an excess of being stated, Panera has still possessed the capacity to turn a benefit and figure out how to function without much if any obligation even while they have been relentlessly growing. On the off chance that they can start to oversee and begin to support their working costs they will have the capacity to see an expansion in their working salary, which means more benefits and a more grounded main concern.
The second course is to consolidate unmistakable highlights that expansion consumer loyalty with the item. Panera is completing an incredible activity executing this course. Panera was the main free Wi-Fi supplier in 2006-2007. They offer a “the third place” condition to clients. The third course to a separation based preferred standpoint is to join impalpable highlights that upgrade purchaser fulfillment in non-financial ways. Panera has made a solid brand picture that puts them in front of different bread shops and bistros.
They likewise are helping the group with their projects in that influence the neighborhood groups. The last course is to flag the estimation of the organization’s item offering to purchasers. Panera takes after this course to separating themselves the nearest. They flag the estimations of Panera with a high value, which suggests high caliber of sustenance. Panera likewise advances a solid accentuation on client benefit, mark administration, and the utilization of innovation in their bistros.
These things bolster separation from rivals. The organization is fruitful on the grounds that purchaser needs are incredible. There is an extensive and different populace of individuals that purchase from Panera Bread. The items have numerous choices and approaches to separate it and they all make an incentive to the client. As of now, there are very few adversaries that are putting forth precisely what Panera offers. Panera is one of the main “quick easygoing” eateries. Panera has a lot of opponents in the sustenance/eatery industry yet there are very few that are attempting to recreate Panera Breads separation procedure.
Panera is likewise attempting to expand the utilization of innovation in their bistro’s to make a considerably more prominent favorable position in the market (Thompson. , Peteraf, , Gamble, , and Strickland, 2010).We have a couple of suggestions that can advance Panera’s development. I have seen in past years that Panera has turned out to be even more an eatery than simply offering high assortment of prepared merchandise. We surmise that they have to backpedal to their emphasis on bread. That made them remarkable previously, and Panera should endeavor to fuse that into each feast.
By doing this, Panera won’t be another top of the line bistro contending with Starbucks. Something else that we imagine that Panera could do, rather than making their batter at bread shops, Panera makes their mixture at their stores. This could kill the agent, and potentially taking out abundance materials all the while (counting a decrease in transportation costs). For a few organizations, anything that helps the main issue is something to be thankful for. Panera doesn’t generally advertise itself in general. At the point when was the last time you saw a Panera bread business and recollected that it? At the present time, Panera publicizes itself as an establishment outlook, where they should advertise themselves as a Company point of view. Giving individuals the essential learning behind Panera.
Obliging the promoting center, we trust that they should target understudies, for later hours. Advertising to them that they have free Wi-Fi, could acquire additional clients. The cooking business is winding up more mainstream inside the nourishment business. We feel that if Panera Bread opens their business to cooking rebates for schools and work environments. This will enable them to get their image out there to a lot of individuals at once.
At last, I surmise that they ought to apply supper specials with the goal that more clients come in amid that time; this is increment deals amid supper times. Another thought is for internet requesting, for the clients in a hurry. Along these lines they can have a higher turnover rate with regards to holding up in lines.Evaluations of AlternativesThe alternative to backpedal Panera’s emphasis on bread is would be very beneficial to the company. With this, they can introduce an artisan menu to a new market while continuously improving and expanding healthy menu items.
Implementing this concept, would keep the consumer coming back for something new. Though the down fall to this alternative would be spending more money, by expanding the menu the company allows more revenue to enter from its new products. Rather than making their batter at bread shops, Panera makes their mixture at their stores killing the agent, and while potentially taking out abundance materials is a simple, yet strong strategy that Panera should use due to the fact that it would cut out the expense from the middle man. It is found that you spend more when you outsource instead of in-housing.
In doing this, the expense for storage will rise, inflating the overall expense total. Knowing this, it would be a risk that the company should take. Suppose the company that Panera Bread uses to make their batter inhibited a massive flood due to a storm, the company would then take a loss to their production. Making their own batter in store ensures that the company is not losing any production. With there being a lack of a lack advertising marketing for Panera Bread; as mentioned, they should advertise themselves as a Company point of view.
Doing this, allows for the company to be viewed worldwide, generating more buzz and excitement for the company. Suppose, an attention grabbing commercial for the company generated around the world, it could increase their net profit of $145.57M (Amigo Bulls) by 5 or 10 percent. For example, the company could develop a 15-30 second commercial that contained a catchy remake of one of today’s biggest hits playing in the background while there’s an eye-grabbling storyline through video graphics. The commercial should not just target one particular audience, but it should reach everyone; ranging from young to old.
If the commercial played frequently throughout each day through the air waves, television, and online advertising, its sales are sure to increase due to the company’s exposure to a more broad audience. With that being said, however, with this alternative comes the increase in expenses. Mass advertising requires a greater expense. The expense for television ads are an average of approx. $342,000 per 30 second ad, while radio ads are approx.
$3 to $500 per 60 second ad (Marketing Manager Insider). Though this method may be more effective, however, it may not be as efficient. Yet another strategy for Panera Bread, advertising to customers that they have free Wi-Fi, could potentially be an unseemingly great strategy to increase sales and exposure of the company. This allows the customer to spend more time inside of the business causing them to buy more products. This strategy opens up the door to corporate workers, college students, and the everyday person.
Having free Wi-Fi allows customers to conduct business meetings in the establishments, work on various projects, and everyday web surfing, all while enjoying one, or several of Panera’s products. Dropping their prices to a more broad market and entering into lower markets is yet another strategy for the company. This strategy ensures that Panera is adequate to compete with the competitors in its market. However, this action also requires the company to produce and sale more products which will increase Panera Bread’s expenses. Recommended ScenarioSome recommendations for the company include, consistently changing their menu, re-evaluating the product and production cost, and even having to maintain a modern and upscale appearance in the store locations. Consistently changing the menu while still emphasizing bread gives their consumers something fresh and wanting more. This would include finding new flavors and recipes to use, etc.
Re-evaluating the product and production costs will ensure that the company is balanced and continuously growing. By doing this, the company is ensuring that they are not spending more than they are bringing in. The company should make sure that their products are changing, but not negatively affecting the revenue. Having the company uphold this upscale and modern-feel, allows the customers feel relaxed and sophisticated. This recommendation provides the perfect setting for the likes of business men/women, etc.
The upscale look will give the customers a new sense of pride for dinning in at one of the company’s establishments. Imagine you have an important presentation coming up with a group of your classmates/co-workers; Panera Bread has the perfect scenery for meeting up with your group. Or maybe some special family members have come to visit; the modern-feel of the establishment makes the choice to dine at Panera a top pick. By implementing these things, Panera Bread Co. is sure to grow even more. Works CitedAll products require an annual contract. Prices do not include sales tax (New York residents only).
“Number of Chipotle Mexican Grill Restaurants 2017 | Statistic.” Statista, www.statista.com/statistics/221456/number-of-chipotle-restaurants/All products require an annual contract. Prices do not include sales tax (New York residents only).
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