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Panera Bread Case Essay

1211 words - 5 pages

BACKGROUND

Panera Bread Company operates in the retail bakery-café segment of the restaurant industry in the services sector. Under the control of CEO Ronald Shaich, Panera Bread Company functions under the names of Panera Bread Company and St. Louis Bread Company. Originally, Panera operated primarily only on the east coast but has now opened up operations in 35 states. Panera’s stores are located mostly in suburban areas near malls and other shopping centers. Panera Bread offers an assortment of breads, deli sandwiches, salads, and pastries among other products. Panera competes in the restaurant industry against such restaurants as McDonald’s and Wendy’s, but Panera’s ...view middle of the document...

• They do not implement aggressive marketing strategies for new customer attraction.

➢ Franchise

• Panera Bread’s growth strategy is to broaden its market penetration as fast as possible.

• Franchising globally is the best possible means for rapid expansion without an enormous outlay of capital.

ANALYSIS

Competition:

A major risk facing Panera Bread is the high level of competition that exists in their industry. The restaurant industry is rather saturated especially in the fast food segment. McDonald’s, Burger King, and Wendy’s are a few of the fast food chains that already have a strong reputation in the industry. It may be difficult for Panera Bread to gain market share in some markets because of the strong presence and name recognition of these and other fast food restaurants. McDonald’s is the largest fast food chain in the world. They have been very successful in expanding into international markets. McDonald’s CEO, Charlie Bell, recently stepped down due to health concerns, which resulted in a price fall in their stock. However, since the naming of Jim Skinner as CEO, analysts have reaffirmed a positive outlook on McDonald’s. The success of Panera Bread and other such places has forced McDonald’s to reassess their menu and add healthier items. McDonald’s also markets to a different market than Panera Bread in that McDonald’s is a low cost provider. Panera Bread stays in suburban areas while McDonald’s has a suburban presence but also floods the cities. So although McDonald’s and Panera Bread do not operate too similarly, they do compete in the same industry and it is important to look at McDonald’s as a main competitor when analyzing the restaurant industry.

Starbucks Corporation has a very similar niche to that of Panera Bread Company. However, Starbucks concentrates only on the beverage side of the café. Panera Bread also sells coffees and cappuccinos as Starbucks does, but Panera has a wider variety of products to sell. Starbucks and Panera are considered to be competitors because they both have a café environment. Starbucks has been extremely profitable in years past. Both companies take advantage of the unique environment that a café provides.

Marketing:

Historically, marketing had played a very small role in Panera’s success. Panera has always put its focus on customer satisfaction more than anything else. The word of mouth promotion from its existing customers actually ensured the participation of new customers at a great deal. One of the reasons for Panera to be so much acceptable to its customers has been its continuous research to understand customer wants and expectations. As a result it has always been changing its menu according to the customers’ taste. It has paid off very well as 57 percent of the customers who had ever tried dining at...

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