Panera Bread Case Analysis Case Study Solution
Price
The company’s pricing strategy is highly viable because of high rivalry that exists in all the fast-food restaurants. The company’s pricing strategy involves the identification of the places where prices are less and more sensitive to the market place. The company aims to maintain the price difference of 10% between two markets.
The company has separated its product mix into “day par mix and business composition mix”. The modification in the price strategy leads to the decline in profit of the company in the upcoming years because of great inventory price. To overcome this problem; the company has made detailed pricing of its menu.
Place
The company has about 2000 restaurants across the U.S and Canada. The maximum number of its fast-food restaurants are located in the U.S. The company has its outlets in almost every country of the United States. The strategy of the company consists of two models of fast-food ownership. The first model comprise of the operation of the company’s restaurants and the second is the operation of the outlets of the company’s restaurants. The company’s approach is to cut the existing restaurants and grow the outlets of the company.
Another strategy of the company is to provide digital platform to its customers, such as; online feedback. Where the customers share their experience related to the food and place. The corporation has also introduced a home-based delivery service for the convenience of its customers.
Promotion
The promotional strategy of the company is mostly through word of mouth of its customers,through which, the company promotes its products. Therefore, the company offers the best services and experiences to its customers.
The company focuses on additional factors in their services that would attract the potential customers. The company has initiated to launch “Panera 2.0”, which enriches the customer experiences and also tend to increase the profitability of the company. The company has introduced its online delivery service to enhance the customers’ experience and to decrease the waiting time.
Another promotional strategy includes the social media. Through social media, the company attracts a large number of customers and provides the information related its new products. Moreover, through CSR activity, the company builds strong relationships with its customers.
Strengths
The major strength of the company is its popularity. The company is known for its fresh and excellent quality products. Besides the offering of bread, coffee and other bakery items;the company has penetrated its markets in 1500 locations to increase its brand recognition and earn more revenues.The company has the good financial background and an ability to acquire other outlets to expand its business. Moreover, the company has its strong distribution and supply chain department.
Weakness
The major weakness of the company is the operational skills. The company has acquired large number of outlets,but the management of these outlets create financial distress, as the expense of acquiring outlets are higher than the income. Besides, the company has strong rivalry from domestic and global competitors. Moreover, the company has offered a limited product mix.
External Assessment
Major competitors
Panera Bread has been able to successfully compete as a bakery and restaurant even in the market where fast food dining is extremely popular and competitive. It has around “1900 outlets in 46 states with over 20 dough making units across the country”. The company has become the first fast food restaurant to remove a list of blacklisted ingredients form their menu. So many decisions based on producing a healthy, environmentally conscious business have given “Panera Bread” a competitive advantage over other companies.
An understanding of its customer and good management of the supply chain has helped it compete with rivals such as Starbucks, Chipotle, Zoe’s Kitchen, McDonalds, and Duncan Brands. The company has the target market consisting of urban workers and suburban dwellers.
In 2018, Panera Bread commissioned a study by the Food and Drug Administration to have research on the consequences of adding buttery-type flavors, gums and added colors to food. This was done to shine a negative light on its competitors, which were selling “egg-like substitutes”. It announced its FDA petition while launching its own new break fast sandwiches which it advertised as featuring,” 100% real eggs “. It referred to its competitor by stating their product as, fake-egg products”.
Chipotle, one of Panera’s biggest competitors has controlled the“fast-casual Mexican dining” in America. They also are known for using fresh ingredients in their products. Their price, product, place and promotion are similar. A geospatial analysis done by the Chipotle Company shows the competitive edge within “fast-casual from Panera, with 87% of Chipotle’s competing with Panera, by operating just 10 minutes’ drive away from Panera’s outlets. Chipotle has to deal with other competing Mexican brands. Starbucks’ fresh food offering is yet another competition for Chipotle and Panera, with Starbucks doing quite well.
Key industry trends
Key trends in the “fast-casual dining” industry are the restaurants that are including more customizable options. Fast-casual dining can charge more per item than fast food restaurants. Providing more protein alternatives that are sourced from non-meat products and plant-centric meals are being crafted as well as fermented foods and food containing probiotics. Eating in-house vs. ordering take-out and moving away from the use of single-use disposables, such as; Styrofoam, which are better for the environment, are the key trends in 2019.
Jason’s Deli uses an app where you can order, pay, walk in and grab food quickly, and is known for a plethora of healthy options and similar value chain to Panera Bread. Jason’s Deli is privately traded as well as family owned. Jason’s Deli has 268 locations in 29 states, and pulls in the revenue of over $500 million.
The company has greater recognition than Jason’s Deli, and offers more frequent discounts and promotions. You can use Apple Pay support and PayPal support to pay at Panera Bread. Panera Bread scored 4.7 in comparison to Jason’s Deli’s 3.4 on the Knoji Comparisons website. With endless possibilities for creating new breads and products that appeal to Panera Bread’s existing customer base, there are a lot of opportunities to thrive in the fast-casual dining market sector............
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