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Panera Bread

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Running head: PANERA BREAD CASE ANALYSIS

Panera Bread Case Analysis LaToya Melvin Davenport University BUSN 520

Table of Contents
INTRODUCTION 3
LITERATURE REVIEW Synopsis of the Situation 4 Key Issues 4 Define the Problem & the Opportunity 6 Alternative Solutions 6 Selected Solution 7 Implementation/Recommendations 7
CONCLUSIONS 7 WORKS CITED 8

Abstract This case study focuses on the market analysis for the Panera Bread Company. The case will examine five components; the synopsis, key issues, problem and opportunity, alternative solutions, selected solution, and implementation/recommendations. Throughout the case, questions will arise as Panera faces challenges in the growth and the operation of the business that will include such issues as marketing, pricing and factors within its consumer base.

Literature Review
Synopsis
Panera Bread is a company founded in 1982, named Au Bon Pain at that time by Louis Kane and Ron Shaich. Panera Bread goal was to offer the best quality product and to be nationally recognized by its bakery-café specialty. Panera Bread’s strategy is to make great bread and to make it broadly available, being the bread experts in the industry. They service consumers-on-the-go, who is looking for something fresh, hot and convenient to grab. In addition the company strives to achieve what is called “Concept Essence” it’s the blueprint for attracting and retaining their targeted customers which differentiates Panera from their competitors (Panera Bread Company). Concept Essence begins with artisan bread, quality products and a warm, friendly and comfortable environment (Panera Bread Company). For example Panera Bread trains their associates to greet their customers by name and have the skills, expertise and personalities to make each visit a delight (Panera Bread Company). Also Panera Bread provides a distinctive environment where customers feel like their home away from home. Panera Bread specializes in providing fresh goods, made-to-order sandwiches, salads, soups, custom roasted coffees and other cafe beverages. They are unique in many ways which give them a competitive advantage. Their advantage consists of the triple combination of product, environment and great service.
Key Issues Increasing cost of raw materials and cost of production like wheat prices, fresh dough prices, labor costs, rent, and other input costs may force Panera to increase the cost of its product (Panera Bread Company). Therefore, it is one of the key challenges to the Panera Bread to manage the price that is affordable to its customers, competitive in the market and still earn profit to sustain in the market (Panera Bread Case Study and Key Success Factors, 2011). Another issue for the company is competition; the restaurant industry is highly competitive with respect to location, customer service, price, and quality of products and overall customer experience (Panera Bread Company). Panera Bread competes with numerous food businesses. For instance they compete with specialty food, casual dining and quick service restaurant retailers, including national, regional and locally-owned cafes (Panera Bread Company). The company has to be aware of their competitive rivals who attempt to copy and employ some of the same standards and who may one day offer the same products and services. In addition they compete in several segments of the restaurant business: breakfast, lunch, dinner, take home, and catering. Therefore many of the company competitors have substantially greater financial and other resources than Panera Bread, which may allow them to react to changes in pricing, marketing and the restaurant industry better than Panera Bread Company (Panera Bread Company). Furthermore, another problem is trying to convince customers that food made with higher-quality ingredients is worth the prices verse the lower prices offered by some of Panera competitors, particularly those in the quick-service segment (Panera Bread Company). Panera Bread failure to successfully educate customers about the quality of their food or the customers’ rejection of the company pricing approach could require Panera Bread to change their pricing, marketing, or promotional strategies (Panera Bread Company). Which could adversely affect the company consolidated financial results or the brand identity that they have tried to create (Panera Bread Company).

Problem & the Opportunity Panera Bread Company is operating in an increasingly saturated domestic market which makes their problem a mix of elements; marketing and pricing. When it comes to prices, Panera Bread Company has a relatively higher pricing approach; Panera tries to inform their customers that it is worth paying for their products by providing them with higher quality ingredients, artisan breads and anti-biotic free chicken (Panera Bread Company). This pricing system of Panera Bread Company can create competition when the competitors introduce similar low quality product at a much cheaper rate in order to attract the target market (What Strategic Issues and Problems does Panera Bread). Marketing is another problem for the company, because Panera Bread is limited on their services. For instance Panera Bread does not deliver nor do they serve dinner. This is a major problem because there is a loss in their customer base just in these few areas. An opportunity for this company would be to consider delivering to local businesses. This would boast their sales tremendously; also Panera Bread does not provide a faster pick-up and take-away option like most other quick-service restaurants have. Revamping their menu and offering greater take-out items could promote Panera Bread Company’s carryout business and increase sales (Panera Bread Company).
Alternative Solutions Improving brand recognition would increase their presence in the local market. The company can expand into new areas; where there are few that can match the quality of Panera Bread. Increasing consciousness about health and nutrition, in return means more customers for Panera Bread. However, a drawback to these solutions would be, advertising expenses and consumers still not being receptive to Panera Bread high prices.
Selected Solution Based upon the information provided the best solution is to improve brand recognition, by doing this is giving the company a greater advantage over their competition. There are many ways to improve brand recognition; for example word of mouth, advertisement, and feedback from customers. Getting feedback will enhance the company awareness of things they might need to change or add.
Implementation/ Recommendations The recommendation is to continue the expansion process while maintaining the differentiation qualities Panera already possesses. Panera must try and invest into bringing up a more cost efficient strategy in order to compete with their competitor’s low prices. Panera has the potential to be the recognized leader in not just the specialty bread segment of the bakery-café restaurants business but across multiple dimensions challenging its competitors (Panera Bread Case Study and Key Success Factors, 2011).
Conclusion
This analysis will help Panera Bread focus on their shortcomings and also give them ideas on ways to improve their company.

References Panera Bread. (n.d.). Retrieved May 2012, from www.panerabread. Panera Bread Case Study and Key Success Factors. (2011, May). Retrieved May 2012, from www.dineshperpective.blogspot.com. Panera Bread Company. (n.d.). Retrieved May 2012, from www.panerabread.com. What Strategic Issues and Problems does Panera Bread. (n.d.). Retrieved May 2012, from www.oppapers.com.

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