Case: 5.1 Panera breadGroup 2

Introduction

• Established in 1981• Ronald M. Shaich is Chairman of the Board

and CEO. William W. Moreton is Executive Vice Chairman.

• Companay mission: A loaf of bread in every arm®

• Question 1

• How was panera bread established a unique position in the restaurant industry? How has this unique position contributet to the firm‘s success? Do you think panera bread will reach ist goal of becoming a leading national brand in the restaurant industry?

• owners observed that people were searching for fast-high/qualit-food , served in an enjoyable environment

new industry „fast casual“• combination of advantages of fast food sector

(speed) + advantage of casual dining category (good food)

Establishing the unique position

How to distinguish from rivals?

- Known as the bread experts (bread, bagels, sandwiches,..)+- Serves specialty food(sourdough bread bowls, fresh salads, toasted sandwiches)

Positioning

Success!!!This unique position leads to success:

• Increasing franchising Panera outlets• Incrasing of profits over the years• Reputation as the bread expert

………… BUT ………

Will Panera Bread become a leading national brand in the restaurant industry?

Competitors in Fast Casual

(ranked per Sales in $)11 Panera Bread16 Chipotle > 50 Bruegger‘s > 50 Cosi

Source: http://www.qsrmagazine.com/reports/qsr50-2013-top-50-chart

Will Panera Bread becoming a national leader brand in the restaurand industry?

Yes! Why?

- increasing number of franchise outlets - 2013 numer 7 regarding to sales in $ - Panera is already the leader in Fast Casual sector

• Question 2

• Analyze the restaurant industry using Porter’s five forces model. In what ways has Panera Bread successfully positioned itself against the forces that are suppressing the profitability of the restaurant industry as a whole?

• Porter’s forces

Competi ti ve Rivalry

within an Industry

Bargaining Power of Suppliers

Bargaining Power of

CustomersThreat of New

Entrants

Threat of Substi tute Products

PioneerBakery, arti san.

Healthy Menu

Brand’s recogniti on

Fast-FoodCasual Dining

Panera Bread’s forces

• Question 3

• What barriers to entry has Panera Bread created for potential competitors? How significant are those barriers?

• BRAND’S RECOGNITION: • PANERA BREAD = FAST

CASUAL• ARTISANAL BAKERY• HEALTHY FOOD

• PIONEER’S PRESTIGE• 20YEARS OF EXPERIENCE

• 1,591 UNITS IN US

• Question 4

• What are Penare Bread’s primary sources of competitive advantage? In you judgement, are these sources of advantage sustainable? Why or why not

Long Term Trend

Specialty Food

Environment and WiFi to Drive theGathering Place Business

Best Peopleand Incentives To Retain

Them

Application questions - 1

• What are the ways that Panera Bread can conduct ethical and proper forms of competitive analysis to learn about potential competitors entering the fast-casual category?

Competitor array – “Market”Key Industry Success Factors

Weighting Competitor #1 rating

Competitor #1 weighted

Competitor #2 rating

Competitor #2 weighted

Panera Bread

Extensive Distribution

0.4 6 2.4 3 1.2

Customer focus

0.3 4 1.2 5 1.5

Economies of scale

0.2 3 0.6 3 0.6

Product innovation

0.1 7 0.7 4 0.4

Total 1.0 20 4.9 15 3.7

Competitor Profiling• Background

– key personalities, location of offices, etc…

• Financials– Method of growth, Liquidity, etc…

• Products– Brand loyalty, New products developed, patents, etc…

• Marketing– 4P’s

• Facilities– Plant capacity, shipping logistics, etc…

• Personnel– Number of employees, management style, etc…

• Corporate and Marketing strategies– Objectives, growth plan, etc…

Application questions - 2

• Think at least two other businesses that have established unique positions in their industries. How have their unique positions contributed to their success?

Starbucks• Products• Service• Feeling special

Apple - iphone• 1st Smartphone– Leader now

• User friendly

• Steve Jobs