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What’s Fueling The Success Of Panera Bread

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  • Pages: 6
  • Word count: 1480
  • Category: Success

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Panera Bread is the supplier of freshly baked, uniquely crafted artisan bread, along with sweet and spicy oven prepared items. In addition, one can obtain freshly tossed salads, delicious sandwiches and nutritious soups in a friendly enticing ambiance. Through the consistent use of premium quality ingredients, Panera Bread maintains its assurance to the public, clienteles and employees and partakes in ventures such as Operation Dough-Nation”. These exceptional elements results in Panera Bread significant success story.

This success story may further be itemized as follows:
Perfect location, Distinguishing Menu, exceptional processing procedures and captivating atmosphere, permits Panera Bread to be successful in the restaurant industry. With focus on breakfast, lunch, dinner, snack time or even “take away” are of the many possibilities.

In contrast, people tend to speak to each other about the sensational meals and ambiance which further aids in the marketing of the business.

Panera Bread has maintained an expedited service with great quality items with little wait to clienteles. This depicts the velocity of fast food but at the superiority of healthy food. Furthermore, Panera Bread appears to be significant in the bakery-cafe sector. Panera Bread controls majority of artisan food sector as well as the local cuisine which reduces competition. In addition, it is more cost effective than the other local items.

Panera Bread have modernized their dining hall by maximizing the use of technology (free WIFI), which further caters for a different class of customers. It can also be concluded that Panera Bread comprise of faithful customers and a diversified menu that applies to a wide cross section of customers. Although the requirements of customers may alter in the future, Panera Bread appears to be excelling in the industry and flexible enough to lead the industry in the future (Gelles, D 2015).

The strengths of Panera Bread may be listed as follows:
• Diverse menu with a captivating dining ambiance.
• Superior Growth Model
• Good Brand Name Identity.
• Great Supplier and Distribution integration
• Franchise Sustenance/Operative assistance.
• Fresh, top Quality Ingredients which are Skillfully Prepared
• Good Corporate Accountability

The key weaknesses may be listed as follows:
• Little flexibility in production.
• Costlier than the competition
• Fresh ingredients perish quickly
• Terrestrial Concentration

Some key opportunities may be listed as:
Breakfast can be added in at a new entity
Innovative Market Opportunities
Option of Take-Home Bakery/Groceries
The Economy is becoming more stable
Recognizance of organic food and the corresponding Markets
Clientele health consciousness in reference to food and irritants.
Some of the key threats identified are as follows:
None gluten free items
Robust Opponents
Delicate to Legislature and regulations

Panera can be beneficial by utilizing the numerous opportunities to influence more strengths such as elevating customer service, altering or diversifying the menu in keeping with health requirements and customer needs and trends. In addition, it is essential that Panera Bread eradicate or diminish all threats available. Focus can now be placed on the Gluten-Free section of the industry and preventing competitors from gaining additional strength in the industry (Kowitt, B 2015).

Panera Bread’s value has numerous segments. Such includes operating routine, inbound systematization, and customer service. Their systematization sets them apart from other competitions by modernizing systems and logistics which results in fresh ingredients, diversified menus and an efficient demand and supply chain. It is paramount that Panera Bread brand maintains its standard and quality in an effort to preserve the customers’ experience.

The Chief Elements within Panera Bread’s Strategy can be noted as:
• Nurture the business by increasing both company and franchised stores. The franchising agreement required the establishment of 15 bakery-cafes within a 6-year period. Candidates had to financially viable, with a history of outstanding restaurant operations and meet the demanding agendas. It was required that all Candidates met 8 strict criteria in order to be considered for a Panera Bread franchise.

• Panera administration’s blueprint for enticing and keeping customers was called “Concept Essence”. This concept ensures that Panera Bread was differentiated from its competitors by utilizing several themes and strategies. Such includes, the creation of artisan breads, and other pastry products created by hands and prepared every day at all cafe location. Provision of high end healthy food items at a reasonable price. Creation of a menu that entice customers from breakfast to dinner. In addition, offering par excellence customer service (Lawson, S. 2015)

• Constant revision of the menu in keeping with customers request and altering as customers’ needs change. Test samples are prepared then supplied in small quantities and assess customers’ response.
• Provision of more health-conscious menu such as low-fat pastries, fresh fruit smoothies and more by use of natural ingredients. The website comprises contents of items including the healthy ingredients.

• Further market the recent MyPanera loyalty reward program for regular customers.

• Creation of café with captivating atmosphere beyond that of competitors but still able to provide health and casual food.

• Location of outlets in regional malls, strip malls and suburban regions aids in supplying customers of diverse demography.

• Specialized customer service coordinator to assist in menu selection, orders and delivery.

• Orders are furnished with utensils such as plates and napkins in a ready to server packaging.

Panera Bread strongly attempts to utilize a focused differentiation strategy in an effort to maintain “quick and casual” meals to the urban workforces and suburban residents. By utilizing a focused differentiation strategy, the company can supply premium baked items, soups and sandwiches, in a quick but healthy manner while dining in a contented ambiance with amenities such as WIFI. With this approach, Panera Bread remains the leader of the competition although their price tags are slightly steper than others in the industry but the added cost is not an issue to customers due to the dining atmosphere.

This strategy, is selected in order to remain the leader in the competitive industry. Fresh food, comfortable high-end ambiance, diverse menu and superior customer service are the key components to remaining viable well into the future (Storms, S. 2015).

There is a consistent, stable profitability ratio. The business has an overall high profit margin with a slightly lagging operating profit margin and net profit margin. In 2012, the company embarked on growing while the economy was still weak which may appear as issues with operating expenses. The liquidity ratio is high and so too is capital except for the period 2009 – 2011 where it decreased.

Panera Bread’s policy to long term debt is evident through its solvency ratios and leverage ratios. Furthermore, the debt on asset is low, which shows its focus on growth and trustworthiness for investors. The estimated average ratio for the past 9 years and the consistent revenue increase each year, depicts reliability, a proper growth plan, strategy and policy. There was a slight exception in 2010 and 2011 where the cash amount decreased due to rigorous investment.

As is depicted in exhibit 2, Panera bread reflects a respectable operating performance. There appears to be acceptable returns on franchised bakery-cafes and also company-owned investments where there is increasing good progresses from 2002 until the Recession in 2008 to 2009. Their exceptional marketing strategy, ensures continuous performance and elevated efficiencies. The total in franchised stores are more than double that of company owned in 2002 whereas in 2011, franchised stores were only 5% more than company operated stores.

By increasing the number of franchise and company operated stores, both entities saw a growth of over 14% in 2011 resulting in estimated 600 billion dollars to company operated to over 800 billion dollars in franchise. The company-operated bakery café had a revenue increased by 2.95 percent in 2011 while franchised bakery café rose by 2.39%.

It was noted that the although the franchise based increase was a lower percentage than company based, the dollar worth value was actually more for franchise operated stores as compared to company owned stores. Both company and franchised bakery cafe depicted significant growth in 2010 and 2011 as equated to slow growth rates in 2007 and 2009. Lastly, observations failed to obtain any substantial deficits in operating performance as per the case Exhibit 2. (Thompson, A. S. 2014).

Panera Bread comprise 3 business segments:
Company owned bakery cafes with 740 units
Franchise owned bakery cafes with 801 units
Regional fresh dough facilities with 24 units

With the Company owned units being direct assets, it encompasses the most significant portions of revenues and expenses, resulting in majority of the profit and outflow. Although the Franchise owned units resulted in high amounts of revenue also, only fractions of the revenue are transferred to the business as well as the franchising fee. The positive outcome is that the expenditures and expenses are transferred to the franchisee and not Panera Bread. Hence, Panera Bread produces profits with fewer cost. In culmination, fresh dough facilities also reflect a profit, notwithstanding that it is a distribution system to the franchise units and incurs expenses and expenditures (Thompson, A. S. 2014).

Gelles, D. (2015, July 2). Panera’s Mission to Be Anything but Artificial. Retrieved September 28, 2017, from https://www.nytimes.com: https://www.nytimes.com/2015/07/05/business/paneras-mission-to-be-anything-but-artificial.html?rref=collection%2Ftimestopic%2FPanera%20Bread%20Company&action=click&contentCollection=business&region=stream&module=stream_unit&version=latest&contentPlacement

HODGSON, M. (1982, February 3). AMBIANCE OF EATING: WHAT IS ITS ROLE? Retrieved September 30, 2017, from http://www.nytimes.com: http://www.nytimes.com/1982/02/03/garden/ambiance-of-eating-what-is-its-role.html?pagewanted=all

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