Foundation of competitive strategy

GHOURRABOU Firdaous
By Mr Mark PORTER

SUMMARY:

o Pest (el) Analysis

o Porter Analysis
o Swot Analysis

Of
PANERA BREAD

o Analysis of the company

!

Strategy of Panera bread:

- Key Success Factors

Competitive analysis

Franchise analysis

Supply Chain analysis

o Panera Bread Facing a Challenge

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! Pest(el) Analysis:
" Political:
-

Regulations and Licenses Health

Property and Safety rules and laws

Competition regulation

Taxes obligations

" Economic:
-

Strong Competitors such as BAGL

Economic growth

" Social:
-

Social preferences and also differences/similarities

Trends and Health issues

Presence and awareness of obesity Guilty Pleasures

" Technology:
-

Emerging technology: Pre Ordering online

A high speed internet

As we can hear in too many ways and from too many different people, many legal
regulations about food poisoning exist, so what should Managers do to be straight
and follow it? Well they simply must follow all of them in order to avoid penalties
and legal proceedings, knowing that regulations about employees represent also an
important and major role to maintain stability within the company, and here within
Panera Bread Company.

(suite)

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! Porter Analysis:
Threat of new entry:
The threat of potential new entrant is strong. The barriers to get into the industry are low. Its not
that expensive to start a business in this field. For this reason we can find a lot of new entrants.
Competitive Rivalry:
The competition is really strong for Panera Bread. There are so many direct competitors to the firm
such as Starbucks, Atlanta bread company, Chipotle Mexican grill , Brueggers and many others (
as we can see in the appendix 9).Those firm are all fighting for the same goal : attracting customers
and making profits. Theyre all offering similar products which make it a hard competitive industry.
Threat of substitutes:
The threat of substitutes is Strong. Substitute product can be restaurants, fine dining even fast foods
that offer different products or services from Panera bread. Substitute product can also be all the
indirect competitors that offer different kind of food , locations , services.
Given the fact That many restaurants and fastfood chains exist in the United states , It explains That
the threat of substitutes Is really strong.
Bargaining power of buyers :
The bargaining power of buyers is strong. The buyers are
affecting all the aspects ( the competition , the potential new
entrants , and the substitutes ) However we can notice that
Americans dont eat out everyday in a restaurant.
Bargaining power of supplier:
The bargaining power of supplier is weak due to the switching
costs.

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! Swot Analysis of Panera Bread

Strengths:
-

High Competence in bread baking

Massive customer loyalty and Brand awareness

As student doing supply chain I can theyve screened a very high performance in supply chain

Loyal to its brands image with a good franchise

dough making efficiency, quality

Leading company in the bakery-caf segment

Weaknesses:
-

Skinny corps of diversification in menus in comparison with the competitors

Base in U.S and Canada, nearly Unknown in Europe

Opportunities:
-

Opening up to Europe and other countries

International expansion

Organic and BIO Products

Advertisement and Promoting

Threats:

Massive competition : Restaurants industry

Fullness of the Market (Saturation of the Market)

People consume less and go out because of the economic crisis

The increasing of the vegan/organic trends

Extremely high operating costs

T
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Strategy of Panera bread:

- Key Success Factors
Differentiation is a key success factor for any business industry
and especially for Panera bread. Due to the hard rivalry, its
important for each firm to stand out from the competition.
Panera Bread is a successful firm in the US for many reasons:
Consistent quality: The company offers to their customers fresh
baked goods , as well as a tasty experience by using the best
products on the market.
Low operating costs
Place: Multiple locations across the US ( near great amount of
traffic) in order to respond to the customers needs. The stores
are unique ( fireplaces , high quality furniture, cozy setting
areas)
Franchise strategy
Long-term objectives

PGES concept: Product , Environment , great service ( PEGS)

" Panera Bread is doing well by providing to their customers
the best quality in terms of product , services and
environment.

 Competitive analysis
Nowadays, most restaurants are trying their best to attract customers by responding to
their needs and preferences: such as providing the best dishes and menus as well as trendy
food such as organic, vegetarian food. Obviously, Panera has a competitive advantage
against it competitors by offering goods and ingredients that some competitors cant really
afford. Despite the fact that Panera has many competitors in the restaurant/fast food field,
the firm does have its own differentiation strategy fast casual restaurant. On the other
hand, the firm offers higher prices than other regular restaurants but today the customers
are willing to pay more for a better quality. Panera has also a great customer loyalty,
which can be a great competitive advantage.

Franchise analysis:
Franchising has an increasing role in the economy of each country and especially in the
united states. Paneras main franchise strategy was to provide its franchisees with market
analysis , a training program for employees as well as certifications , benchmarking data
and calendar planning assistance. This strategy turned out to be a successful.

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Supply Chain analysis:

The supply chain system of Panera bread provides bakery cafes with high-Quality food. The firm
uses distributors to distribute products and materials to bakery cafes. Franchise-operated cafs
operate under contracts with one of Paneras independent distributors. This strategy include 2
initiatives: creating relationship with suppliers and adopting a discipline that allows firms to
control costs and risks ( vendor management ) .

From the suppliers of Panera Bread of their raw materials to produce bread and so son
ever, the best bakeries, that they produce in fact themselves in the proper shops, to the
Factories and then to not the Warehouse but to the Bakeries straight away, sometimes in
the same place to be finally sold to the final customers and wait afterwards their feedback
and work on gaining their loyalty.

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! The challenge of Panera Bread:

Despite the fact that Panera bread is a successful company (high growth rate, competitive
advantage,..).The firm is operating in a high competitive industry (restaurant/fast food )
which obliges the company to constantly renew their strategy in order to attract customers and
achieve profitable growth as well. Therefore how can Panera renew their strategy and
continue to achieve high profits knowing that the competition is assiduous?

As far as I am concerned I think that Panera should extend their stores not only in the United
States and Canada but also in Europe and specially in big cities such as London, Madrid,
Amsterdam,. This strategy of international extension can allow Panera to have a better
notoriety as well as a higher brand awareness in Europe. However , Panera Should also keep
an eye on the american market which is constantly changing. In order to renew its strategy ,
Panera should propose more healthier options in the purpose to fight obesity and to raise
awareness about health issues that Americans are facing on a daily basis. The firm could also
offer Organic and vegetarian options for specific customers. As a third option , the firm needs
to learn how to promote itself through social networks , commercials and TV spots.

Thank you Sir.

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