The legacy of Panera Bread began in 1981 as Au Bon Pain Co., It was founded by the two friends Louise Kane and Ron Shaich. Panera’s bakery cafes are located in 44 states over the U.S. as well Ontario, Canada.
In May 1999, all of Au Bon Pain Co., Inc.'s business units were sold, with the exception of Panera Bread, and the company was renamed Panera Bread. Since those transactions were completed, the company's stock has grown thirteen-fold and over $1 billion in shareholder value has been created. Panera Bread has been recognized as one of Business Week's "100 Hot Growth Companies." As reported by The Wall St. Journal's Shareholder Scorecard in 2006, Panera Bread was recognized as the top performer in the restaurant category for one-, five- and ten-year returns to shareholders. (Panera, 2013)
Discuss Panera’s business level strategy.
Panera operates in three different business segments; company-owned bakery-café operations, franchise operations, and fresh dough operations. As of June 2013 there were 1708 operating Panera restaurants in 44 states as well as in Ontario Canada both company owned and franchise. That’s an increase of 328 restaurants in 4 years. (Panera, 2013)
The key element of Panera’s growth strategy focused on growing store profit, increasing transaction and gross profit per transaction, using its capital smartly, and putting in place drivers for concept differentiation and competitive advantage. Panera has always kept an eye on the market, the new markets as well as existing markets. In 2009 Panera had a strategy that was different than others. This is the time when the economy took a turn for the worst. Some restaurants lowered their prices to get customers, while Panera kept their prices the same. They even added a lobster sandwich for $16.99 on their menu in some of their locations. This paid off, Panera did well. They went for a “quality instead of quantity” strategy. Some of the restaurants that lowered their prices really took a hit when the number of customers they had projected didn’t meet the requirements. Shaich Panera’s CEO did things completely opposite of his competition. Instead of cutting prices down, he raised them twice, once on bagel and once on soup. He said that at Panera they didn’t offer a low-end strategy, he also said that the time was to increase the food experience. In a world where everyone was cutting back he wanted to give more, not less. Panera kept their employees, because they believed that by keeping labor consistent they were able to provide a quick good service. (Vincelette & Fogarty, 2012)
At Panera they kept looking at the future, they wanted to implement new things, they wanted to test different things as well. A result of their testing is offered in stores today. When buying an entrée and a beverage you get the opportunity to buy a pastry at a “special” or discounted price.
Discuss the competitive landscape of the restaurant industry.
The competitive landscape of the restaurant...