Panera Bread
Case study 5
Team members:
Mario
MA1N0225
Maria
MA1N0229
Oogi
MA1N0216
History
• Panera Bread is a casual made-to-order fast food
restaurant that offers specialty breads, sandwiches,
tossed salads and soups.
• Saint.Louis Panera Bread, specialty bakery-cafes, has
grown from 602 company-owned and franchised
units in 2003 to 1270 today.
• In 2008 alone, It sales increased by over 23 percent .
• What ‘s Panera’s secret? - Key of success of Panera
Bread’s is positioning and execution.
•
Changing Consumer Trends
– Panera established in 1981, founded by Au Bon Pain
Co. The company grew slowly until mid 1990,when it
acquired a company, chain of 20 bakery–cafes
located in the St. Louis area.
– Owners observed that people were increasingly
looking for products that were special from run-ofthe-mill restaurant food.
– They led to trend the company that good food
served quickly in an enjoyable environment.
•
The Emergence of Fast Casual
–
–
–
As a result of these changing , a new category in the
restaurant industry, called “fast casual,” emerged. This
category provided consumers the alternative they
wanted by capturing advantage of the both fast food
category (speed) and casual dining category (good food).
The owners of Au Bon Pain and Saint Louis Bread
Company felt that they could help pioneer this new
category, so they repositioned their restaurants, named
Panera Bread.
The position that Panera moved into is depicted in the
graphic titled “Position Strategy of Various Restaurant
Chain”.
“Position Strategy of Various Restaurant Chain”
Panera’s Version of Fast Casual
– They established fast-casual category and added a
bonus to mix – specially food.
– The company has become known as the nation’s
bread expert and offers a variety of artisan breads,
pastries, and baked goods.
– Panera Bread’s restaurants are open for breakfast,
lunch and dinner and also offer hand-tossed salads,
sandwiches, hearty soups, hot and cold coffee drinks.
– The company also provides catering services through
Via Panera catering business.
– Panera even suggests new time of day to eat specially
foods, calling the time between lunch and dinner
“chill-out” time.
– Panera Bread is now the acknowledged leader in the
fast casual category, sales were $941 billion in 2008.
– It is unique blend of fast-casual service and specialty
foods also continues to gain momentum.
• Present Status and Goal for the Future
– Panera’s leadership in the fast-casual category and
financial performance has drawn considerable
attention to the company.
– The company’s goal remains to make Panera
leading national brand.
– The company is counting on its unique positioning
strategy and its signature foods and savvy
execution to make this goal reality.
Questions and Answers
1. How has Panera Bread established a unique position in the
restaurant industry? How has this unique position contributed to
its success?
• Panera Bread created a new category fast casual. They merged the
advantages of fast food and casual restaurants.
• Hence,they take care to have good quality of food while having
fast service.
• The idea appeales to the customers  speciality and quality food
served in a fast way in beautiful neighbor-like atmosphere cafes.
• Appart from the traditional meal times they have chill-out time.
Their menu is rich in different food, from bread based meals to
warm meals or refreshing salads. They provide catering services.
• That’s the key to their success.
Q1: Positioning strategy of Panera Bread and
other restaurant chains
1. (Cont)Do you think Panera Bread will reach its goal of
becoming a leading national brand in the restaurant industry?
Why or why not?
• Yes, since they already are regarded as a nation’s
bread expert. However, they are still developing and
expanding. Their positioning as well as the execution
of their vision are very strong.
• 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?
Factor
Analysis
Impact
Threat of substitute products
• Substitute products are
easily accessible (cooking at
home, ready-made meals)
• Economic downturn forces
some consumers to turn to
cheaper substitute products.
HIGH
Bargaining power of suppliers
• Since Panera uses common
ingredientes they can choose
the best offer of supplier.
LOW
Bargaining power of buyers
• Economic downturn causes
consumers spending less
money on food e.g. cooking at
home.
• Buyers may turn to the
company’s major competitors.
HIGH
Competitive rivalry
•Many competitors in
resttaurant/food industry.
• Competitors constantly
change menu to meet
consumers’ preferences.
INTENSE
Threat of new entrants
• Since it’s a recipe for
success, many restaurants
would like to go casual fast.
HIGH
• 3. What barriers to entry has Panera Bread created for
potential competitors? How significant are these
barriers?
• The threat of new entrants is very high for Panera.
• Economies of Scale
• “Primary competitors include specialty food and casual
• retailers”
Product Differentiation
dining restaurant
.
Capital
Requirements
• The barriers to •entry
are low,
and people are always
looking•forCost
new advantages
and interesting
places to eatof(which
independent
size is one
of the reasons
why Panera
was so successful).
• Access
to Distribution
Channels
• Government Policy
• Buyers have a lot of power because there are a lot of other
places they could eat. Paneras are often located in busy
places, such as malls or busy streets. This means that they
usually have several other eateries around them.
• 4. What are Panera Bread’s primary sources of
competitive advantage? In your judgement, are these
sources of advantage sustainable? Why or why not?
• Panera’s strengths come in their ability to provide fresh meals to
consumers, keeping up with the growing demand and trend for
Product differentiation or brand’s recognition
such•products.
do this it
at was
a reasonable
price.
•• They
Evenalso
though
“casual”,
it was fast at the same
• They’ve also remained true to their initial vision,
artisan
time.offering
(fast-casual)
breads, while still expanding and offering many other menu
• Healthy food
options.
• Their positive reputation attracts new customers,
and their
• Brand
Equity
friendly environment keeps them coming back.
• Industry Analysis
• They have proven skilled at training new managers and in
• Pioneer’s
prestige
choosing only extremely qualified candidates
for their franchise
openings.
• Experience