OCCUPYING A FAVORABLE POSITION IN A
HIGHLY COMPETITIVE INDUSTRY
Group nu 2
Valerie- MA1N0220
David- MA1N0219
Bảo Bảo- MA1N0230
Amos- MA0N0241
INTRODUCTION TO THE CASE
Restaurant industry focus: highly competitive
environment
 Panera-Bread:a chain of specialty bakery-cafes
 Rapidly growing

 602
company-owned and franchised units in 2003
-- > 1270 today
 In 2008: sales increased by 23%, 941 million USD

How come that Panera-Bread is prospering
while others are experiencing difficulties?
DEVELOPMENT OF PANERA-BREAD
1981: founded under Au Bon Pain Co. (3 bakerycafes, 1 cookie store)
 Slow growth until mid 90s when it acquired Saint
Louis Bread Company (chain of 20 bakery-cafes)
 Customers wanted good food, served quickly in a
pleasant environment

New food category „fast casual“ = advantage of fast
food (speed) and casual dining category (good food)
 New company name Panera Bread, offering also
specialty food

POSITION STRATEGY OF RESTAURANT CHAINS
PANERA BECAME






Nation‘s bread expert offering artisan and
other specialty breads (bagels, pastries,
baked goods, salads, signature
sandwitches, soups)
Also provides: Via Panera Catering service
Nice and inviting atmosphere in the
restaurants
Open for breakfast, lunch, dinner
Chill out time: time between lunch and
dinner to eat specialty food
Leader in fast-casual category, observing
needs of customers and following trends
Q1: HOW HAS PANERA BREAD ESTABLISHED A UNIQUE
POSITION IN THE RESTAURANTS INDUSTRY?
By following the trend and listening to the
customers
 Offering good food served quickly in a pleasant
environment
 Creating a new category „fast casual“

Q1: HOW HAS THIS UNIQUE POSITION CONTRIBUTED TO
THE SUCCESS?
This unique position was driver of the success
 People wanted not only food served quickly but
they also wanted to dine in an inviting and
pleasant environment

Q1: DO YOU THINK PANERA BREAD WILL REACH ITS GOAL
OF BECOMING A LEADING NATIONAL BRAND IN
RESTAURANT INDUSTRY? WHY OR WHY NOT?



YES
$3 billion in systemwide sales, the company exhibits purchasing power
and leverage rare in the fast-casual category
Panera’s national name recognition attracts customers and quality
staff, while longstanding relationships with vendors lead to proprietary
equipment capable of increasing the bakery-cafés’ efficiency and
throughput.
Quotes of Moreton, CEO of Panera
“Panera’s DNA—how you treat customers,
how you improve, how you innovate—
didn’t budge.”
“While some would use that leverage to
cut costs, we’ve chosen to use it to come
up with quality and innovation that others
cannot match,”
http://www.qsrmagazine.com/executive-insights/moreton-s-view-top
Q2: 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

Q2: FIVE FORCES ANALYSIS





Threat of Substitutes – Panera has lessened the threat of
substitutes by creating a pleasing atmosphere in its restaurants
and making its bakery second to none.
Threat of New Entrants – Panera has lessened the threat of
new entrants by establishing a first-mover advantage (or near
first-mover) in the fast-casual portion of the restaurant
industry.
Rivalry Among Existing Firms – Panera has lessened the
threat of rivalry among existing firms by creating a position
that appeals to both fast-food consumers and casual dining
consumer. The strength of its brand creates a barrier to entry.
Bargaining Power of Suppliers – This is not a major threat to
Panera.
Bargaining Power of Buyers – This is not a major threat to
Panera.
QUESTION 3

What barriers to entry has Panera bread
created for potential competitors?

How significant are these barriers?
BARRIERS OF ENTRY AND THEIR SIGNIFICANCE

Barriers of entry created

1.
Economies of Scale
1.
2.
Products differentiation
2.
3. Cost advantages
independent
of size
4. Access to distribution
channels
5. Capital requirements
Significance
3.
Created large economies
of scale, difficult to enter
Strong brand name,
welcoming environment
In existence for long time
4.
Shops Spread all over
5.
Already has large capital
Q4: WHAT ARE PANERA‘S PRIMARY SOURCES OF
COMPETITIVE ADVANTAGE?
Positioning in restaurant industry
(good food served quickly)
 Establishing of new category fast
casual (is not associated with
unhealthy food)

good and healthy food is served fast
 Food is more healthy than in fast
food (Mc Donalds) and the food is
served quickly than in restaurants


Nice and warm atmosphere of
restaurants (exterior and interior)
Q4: IN YOUR JUDGEMENT ARE THESE SOURCES
SUSTAINABLE? WHY OR WHY NOT?
Yes
 Since people put more and more focus on healthy
living style as well as are busy and do not have lot
of spare time, they will always need healthy food
that is served quickly
 Panera-Bread has great background (knowledge
as well as finance) to maintaint this business
sustainable by keeping follow the customer‘s
needs (regarding assortment,
environment…innovation)

ENJOY YOUR DAY