Panera Bread Case Analysis. Hannah Williams. 03/18/2017.
1016 WordsMar 19, 20175 Pages
Panera Bread Case Analysis
Professor Richard Knight
Panera Bread Company is currently an industry leader in the bakery-café segment of the fast-casual dining industry. Panera has continually experienced a steady rate of expansion and profitability in North America and Canada since it’s conception 30 years. As of 2015, the company operated 901 company owned bakery-cafés and 1,071 franchised-owned bakery-cafés globally. Panera’s mission is to provide customers with quality product, exceptional service in a comfortable environment. Despite all its success and current achievement, Panera struggles with providing a balance between quality food and competitive pricing.
Panera’s business model is the…show more content…
By maintaining its niche, Panera has an instant advantage over its competitors.
The restaurant/ dining industry also has strong bargaining power with their supplies since they purchase inventory in extremely large quantities.
Of the five forces, the bargaining power of customers would be of most concern. Panera bread relies on high customer turnover and their purchasing power to maintain its ' lead in the industry and hence optimization of profit.
1. Major problems and issues
• Obtaining a balance between quality food and competitive pricing. o Panera prides itself in providing fresh quality food and a comfortable environment for its customers at reasonable prices. The reason behind its inception was to provide customers an option to obtain good quality food however, the company is finding it difficult to keep its costs down. o Panera is experiencing increasing expenses which reduces operating margin. For example, there was an 8% increase in expenses which consequently led to a 12% decrease in consolidated operating margin. o Also, competitors are increasingly imitating Panera’s menu at a low cost. As such, there is a risk of customers seeking cheaper alternatives which would affect company sales.
• There is a heavy reliance on outside suppliers o Panera relies heavily on outside suppliers for key ingredients used in manufacturing products which makes up 36.2% of total consolidated expnses. The company’s