Essay on Organization and Management of Panera Bread

714 WordsOct 27, 20123 Pages
Organization and Management of Panera Bread The formation of Panera Bread began in 1978 when Louis Kane bought Au Bon Pain, a retail producer of baked goods. Kane changed it to a wholesale business by opening two cafes and staffing them with bakers and employees, but high production costs made it impossible to cover his overhead. In 1981 Kane decided to remain responsible for site selection and financing, but he chose Robert Shaich to help turn the company around as President of internal operations ("Au Bon Pain History"). First, Shaich assembled a team to simplify the costly bread-making process by developing a method of forming and freezing bread dough for later baking. This process eliminated the need for a professional baker on…show more content…
In addition, they installed a database management system for store managers and corporate executives to monitor day-to-day operations, launched a catering department, and expanded internationally by adding franchises to their organizational structure (Thompson C-169). Shaich used franchises to stimulate growth by requiring qualified outside investors to open and manage at least 15 franchised cafes in a six-year period under the company name (Franchise Information). Another organizational crisis arose in 1995 when efforts to expand the Saint Louis Bread chain in order to increase brand awareness backfired as consumers favored Saint Louis Bread over its parent company. To solve this conflict, new divisional presidents were created for each chain, and in 1999 Shaich convinced the board of directors to sell all the Au Bon Pain cafes and restructure the Saint Louis Bread chain under the name Panera Bread. Panera’s current organizational structure utilizes vertical integration, with 17 fresh dough facilities that deliver to 1,591 cafes and franchises (“Our History”). Upper level managers now make menu and pricing decisions and overlook the marketing, franchise, concept development, legal, technology, supply chain, and human resource departments (“Organizational Chart”). Lower level

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