Occupying a Favorable Position in a Highly Competitive Industry

1. Valerie- MA1N0220 David- MA1N0219 BảoBảo- MA1N0230 Amos- MA0N0241 Group nu 2 Occupying a FavorablePosition in a HighlyCompetitiveIndustry

2. 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? Introduction to the case

3. 1981: founded under Au Bon Pain Co. (3 bakery-cafes, 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 Development of Panera-Bread

4. Positionstrategyof restaurant chains

5. 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 Panera became

6. 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 Panera bread established a unique position in the restaurants industry?

7. 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: How has this unique position contributed to the success?

8. 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. Q1: Do youthinkPaneraBreadwillreachitsgoalofbecoming a leadingnationalbrand in restaurant industry? Whyorwhy not? • QuotesofMoreton, CEO ofPanera • “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

9. Q2: five forces analysis

10. 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. Q2: five forces analysis

11. What barriers to entry has Panera bread created for potential competitors? How significant are these barriers? Question 3

12. Barriers of entry and their significance • Barriers of entry created • Economies of Scale • Products differentiation 3. Cost advantages independent of size 4. Access to distribution channels 5. Capital requirements • Significance • Created large economies of scale, difficult to enter • Strong brand name, welcoming environment • In existence for long time • Shops Spread all over • Already has large capital

13. 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: What are Panera‘s primary sources of competitive advantage?

14. 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) Q4: In your judgement are these sources sustainable? Why or why not?

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