Case Study Analysis on Panera Bread
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Topic 1: strategy and competitive advantage
1. What business is the company in?
Panera Bread Company (PBC) is a doing a type of business known as franchisor business. This type of business involves liaising with small company associates to sell the produced products. Panera Bread Company has a reputation and is using this reputation to partner with the franchise in order to reach both urban and suburban customers. In order to ensure that quality is maintained, the company provides fresh dough to all its associates and then allows them to do the baking themselves. In return, the company gets a prescribed percentage of profits both its branches and private branches (Arthur, 2007).
2. Has the company’s strategy resulted in a competitive advantage? How?
Yes, the company’s strategy has resulted in a competitive advantage. Basically, the PBC’s obvious competitors are the restaurants that operate around where it also operates its business. From the article, restaurants do start a similar business among their menu but end up collapsing due to competitive advantage. This closer of restaurants has been associated with poor standardization. Unlike Panera Bread Company which supplies standardized fresh dough, these restaurants do not have such advantage in order to maintain quality. Considering that PBC doesn’t do baking, its efficiency is high unlike in the restaurants where the process proves to be labor intensive and riskier considering the fact that all process is done under one roof.
3. Has the company’s strategy resulted in good company performance?
Yes, the company’s strategy has resulted in its good performance. This is indicated in its yearly financial returns which indicate that the company has been making increasing profits over the years (Arthur, 2007). The company has a market policy which requires that all stakeholders contribute a certain percentage of their sales towards its national advertising department kit. Locally, the company has a binding agreement for its partners to put aside a portion of their sales for local advertisement It also ensures that its baking products are up to standard. It believes in the quality of not only of its products but also on the infrastructural requirements for a business. For this reason, it always inspects both the location and the design of its own branches and franchisee branches. Its strategy of decentralization of its services to community events such as weddings has also proved to be customer friendly. In addition to that, the company provides free Wi-Fi to all its affiliate partners and this attracts people to have rest in those areas while enjoying free network services.
Topic 2: Defining vision & mission
1. What do you think is the company’s vision or mission?
Vision: To be the leading company in the world that offers bakery- café service.
Although currently the company is exploiting only a local market, I strongly believe that after exploiting its local market to a saturation point, it will aim to expand its bakery-café businesses to other countries.
Mission: To provide high-quality bakery-café services at an affordable price with good customer relationship and high levels of accessibility both in the urban and suburban area.
2. Are there any conflicts between the company’s actions and its vision of mission?
Yes, the company envisions being the leading bakery-café service provider with an aim of reaching out as many customers as possible. However, it has so many franchisees who also invest in a good amount of money to join the business. The conflict that arises here is how to maintain pricing of its products in case affiliate parties consider it wise to increase the prices at their own will. This will affect its goal of providing affordable bakeries.
Topic 3: industry and market analysis
1. Is there a particular segment of the market that you think is more attractive?
Yes, I think psychographic segmentation is more attractive than the rest in the market segment (Jerry, 2016). This is because it considers an extra important valuable factor of mind which is psychology. Unlike behavioral segment which only considers the behavior of customers in relation to buying of products, this market segment goes an extra mile of analyzing critically the psychological aspect of buying products. For example, Panera Bread Company inspects the design of buildings of its affiliate branches to ensure that the structure is attractive enough for the customers. Another aspect of psychographic market segment applied by Panera Bread Company is the installation of a free Wi-Fi in all its affiliated companies. This is meant to attract customers to do networking at such premises and in the process; they end up taking fast food.
2. What are the key success factors in this market?
The key success factors in this are as follows
This market can be easily enhanced by other variables that are used in the demographic segment market. In addition to this, it can be used to evaluate attitudes of customers towards a company or a product and this can help in implementing necessary changes that will improve the success of the company. Attitudes impacts on the behavior of customers buying products hence analyzing them are important.
Another key factor is that during meetings, each member gives his view about the attitudes f customers for various products and these views can help to improve the sales of a company.
3. What are the main changes in the company’s environment?
The main changes in a company’s environment are (Fernado and Rogellio, 2009)
i) Management team
Sometimes the management team may change from time to time and this may lead to inefficiency of the company’s operations as it takes time to adapt to those changes.
ii) Economic changes
This is an external environment. Inflation rates affect the performance of a company. It increases the cost of operations which in turn cuts down the profit margin that could have been gained by the made by the company.
iii) Political changes
Politics affects running of companies both directly and indirectly. Political instability influences make production to stall due to disruption of demand and availability of human workforce.
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iv) Cultural changes
This is an internal environment. Change is dynamic and inevitable in any organization. An organization experience changes whenever it adopts a certain policy. It involves changing the old used way of doing things to a new way in order to remain competitive
v) Customer buying behaviors
External changes of customers buying behaviors may result to collapse of a company. This is greatly influenced by the availability of substitute commodities hence the company should monitor customers’ buying behaviors and adjust accordingly
4. Which of Porter’s five forces do you think is influencing the company the most?
I strongly believe that one of Porter’s five forces that influences Panera the most is the supplier power. This is the ability of a company to meet the needs of the customer by ensuring constant and enough supply of its product. The company aims at penetrating both the urban and suburban market. To achieve this it strategies on how it can attain penetration by supplying dough and allowing its affiliates to do baking and sales. It has a policy of reaching out customers through selling in any popular gathering. Its main agenda is to provide bread to every customer and this cannot be achieved without constant and enough supply for its customers.
Arthur, A. (2007) Panera Bread Company. University of Alabama, USA.
Fernado, F. Rogellio, O. (2009) Environmental Change and Organizational Transformation. 14(6) pp. 1017-1041. Retrieved from http://people.bu.edu/fsuarez/Fernando_Suarez_Website/Publications_files/2005_ICC_Environmental%20Change_Org%20Transf_Suarez%20Oliva.pdf
Jerry, W. (2016). Market Segmentation. Decision Analyst. Retrieved from https://www.decisionanalyst.com/whitepapers/marketsegmentation/
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