Panera Bread: Occupying a Favourable Position in a Highly Competitive Industry Group 3

Group Members: Marie Nikki R. Martinez M997Z208 Marko Marinic M997Z206 Anja Grgic M997Z2055

What is Panera Bread? A chain of specialty bakery-cafes Established in 1981 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 Company mission:A loaf of bread in every arm® Menus: Bakery Menu (breads, bagels, egg souffles, pastries and sweets) Cafe Menu (sandwiches, soups, hand-tossed salads, beverages and Kids menu)

Changing Consumer Tastes The owners observed: People were increasingly looking for products that were special (different from typical restaurant food) but They didn´t want to give up the convenience of quick service Company concluded: consumers wanted the convenience of fast food combined with a higher-quality experience

Question 1 : Positioning Panera Bread has established a unique position in the restaurant industry. “Fast casual” –The position that Panera has established allows it to capture the advantages of both fast food and casual dining. It is clear that this unique position has contributed to Panera’s success. It provides Panera a distinct point of differentiation between itself and many of its competitors, and allows the company to sell a fairly large volume of high margin food products.

Question 2 – five forces analysis The Restaurant Industry Competitive Forces Threat to Industry Profitability Low Medium High Threat of Substitutes Threat of New Entrants Rivalry among existing firms Bargaining power of suppliers Bargaining power of buyers

Question 3 – barriers to entry Panera has created barriers to entry in the following areas: Product Differentiation Cost Advantages Independent of Size

Question 4 – primary sources of competitive advantage Panera’s primary sources of competitive advantage are: Its position in the restaurant industry The atmosphere of its restaurants The quality of its bakery products Its brand strength

Application Questions: Ethical ways to overlook potential competitors in the fast-casual category Overlook competitors by doing some online research, trade magazines, trade associations. Who are the new competitors on both national and local level. Check the stories in newspaper articles, if they are publicly traded, read their annual reports (useful information about future plans, growth strategies, new products or services, is their sales increasing or not...) In-person market research , visit competitors´ restaurant. If I am a customer, how would I feel about their service and products? What are its strong and weak points? What kind of marketing are they using? Is their web site good? Are their locations crowded? How is the atmosphere? How is their customer service, do they answer the phone?

Application Questions: Other businesses that have established unique positions in their industries: Zappos- online shoe store Starbucks