Case Study 2 BUS 421 OL 009 JPatterson

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Case 13: Panera Bread Company in 2016 - Is the Company’s Strategy to Rejuvenate Its
Growth Working?
Jeanny Patterson
Thomas Edison State University
Business Administration Capstone (BUS-421-OL009) May 2020
Dr. Christie Cruse
May 17, 2020
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Case 13: Panera Bread Company in 2016 - Is the Company’s Strategy to Rejuvenate Its Growth
Working?
SWOT Revelations and Competencies
A SWOT analysis conducted at the Fern Fort University helps reveal Panera
Bread’s overall attractiveness. Panera Bread has learned what it takes to effectively enter new
markets. Their research concluded customers of fast food places like McDonalds, Taco Bell and
Kentucky Fried Chicken to name a few could be enticed to purchase a better quality quick dining
experience. The fast-casual dining experience is just that. Defined by Merriam-Webster
dictionary as “a restaurant that combines elements of fast-food service (such as counter ordering)
with other elements (such as made-to-order food) that are typical of a full service restaurant”.
Panera found it can offer artisan and specialty breads, soups, made to order salads and
sandwiches with fewer frozen or processed ingredients at prices slightly higher than fast food
places. Panera customers are attracted to the better quality of foods that can be purchased
throughout the day.
Panera has also worked to distinguish itself as a fast-casual restaurant that provides quick
service eating with higher quality foods. The work and research put into developing a bread
dough that can be baked fresh every day at all their bakeries and the ability to provide high
quality food in a fast-casual restaurant are distinctive competencies for them. Panera Bread has
also leveraged technology to help streamline processes and procedures across all company-
owned and franchise bakeries. This allows reports to be provided from all stores in a similar
method to corporate management. They have a proven record for adding other companies that
are complimentary to their goal and strategy. Starting with the purchase of most of the facilities
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that provide fresh dough to all of the company-owned as well as the franchised bakeries on a
daily basis. Panera Bread has also created relationships with suppliers to provide materials
needed and ensure there are no blockages to the supply chain and food quality is always
consistent. This is attractive to investors and potential franchise owners.
The Competition
Panera Bread competes with many different fast-food, fast-casual and restaurants
because of its many offerings. Offering breakfast, coffee, teas, pastries and foods suitable for
both lunch and dinner, Panera Bread competitors include Starbucks, Chipotle, Applebee’s and
McDonalds to name a few. When putting together a competitive analysis with a big competitor;
Chipotle, I believe Panera is better prepared to be a major force in the fast-casual restaurant
space. Panera offers foods that can be consumed for all meals; breakfast, lunch, dinner and even
snacks in between and Chipotle’s offerings are only possible for customers at lunch and dinner.
A consumer may think of visiting a Panera for afternoon coffee and pastry while this opportunity
is not available at Chipotle. Another rationale for my belief that Panera is better prepared to be a
major force in the fast-casual restaurant space is that the average Chipotle restaurant size is
between 2,200-2,500 square feet while Panera’s average restaurant size is approximately 4,500
square feet. This allows guests to sit at a Panera restaurant more often while more orders at
Chipotle will be to go.
Panera Bread Chipotle
Current High quality foods at low cost Cost leadership - Gaining a competitive
Strategy prices advantage by lowering cost.
Objectives Improving Panera’s Making the brand more visible and loved;
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competitive position; Creating innovation utilizing a stage-gate

Expanding our growth process; Leveraging our digital-make line to
opportunities; Building the expand access and convenience; Engaging
capabilities to improve our with customers through our loyalty
competitive position and program; Running successful restaurants
expand growth; Maintaining with a strong culture that provides great
our credibility through results food, hospitality, throughput, and
economics.
Resources 2,000 locations; high quality 2,619 locations; quick delivery of meals
and healthy food, superior customer with healthy ingredients
Capabilities service
Assumptions revamp coffee offerings to strategic restaurant site selection; sourcing

compete with big coffee better ingredients; continue investments in
houses; update breakfast menu information technology network and
to compete with those that offer infrastructure to improve systems and
frozen foods and dinner menu applications used internally as well as by
to stay fresh; - move to third- guests
party delivery partners
Panera’s Stance on Social Responsibility
In February 2019, Panera ended its “pay-what-you-can” program which they operated for
six years. Panera found that the model was not sustainable. Panera does however still give back
to the communities in which they are situated as part of their Corporate Social Responsibility
(CSR) program. One of the many things they do is that at the end of the day, any bakery items
left in the cases are donated to local non-profit organizations that help feed the needy. This is
done instead of reselling day old bread at discounted prices to customers or throwing it all away.
Donations are made to non-profit organizations to help feed those in need. Panera has aptly
named this program “Day-End Dough-Nation®”, a great play on words to demonstrate what they
are doing with bakery items that were not sold at the end of the day. I do believe this is an
adequate demonstration of their stance of social responsibility. This is a wonderful way to give
back to the local community.
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Strategic Issues and Problems
Niren Chaudhary, Panera’s CEO and his leadership team should continue their focus on
the healthy menu offerings. Continue to expand the “No No List” that was started in 2015;
artificial additives, colors and sweeteners that would be removed from all of their bakeries by the
end of 2016. This will continue to address the health-kick most customers are looking for.
Panera leaders will also need to determine how to add plant-based options to their menus. The
current hot trend is plant based burgers and this is not an option on Panera menus. How do they
increase their plant-based options from the salads and grains they offer today? It is also
important that Panera continue to ensure the suppliers they use are available and can provide
what is needed to keep up their menu offerings. It is important to their ability to deliver fresh,
never frozen food options.
References:
Thompson, A, Strickland, A, & Gamble, A. (2010). Crafting & Executing Strategy. New
York, NY: McGraw-Hill.
https://www.panerabread.com/en-us/company/about-panera.html
http://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_CMG_2019.pdf
https://www.panerabread.com/en-us/articles/day-end-dough-nation.html
https://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1152&context=honorstheses
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Thomas Edison State University

Business Administration Capstone (BUS-421-OL009) May 2020

Dr. Christie Cruse

May 17, 2020

SWOT Revelations and Competencies

experience. The fast-casual dining experience is just that. Defined by Merriam-Webster

throughout the day.

consistent. This is attractive to investors and potential franchise owners.

Chipotle will be to go.

Panera Bread Chipotle

competitive position; Creating innovation utilizing a stage-gate

Assumptions revamp coffee offerings to strategic restaurant site selection; sourcing

Panera’s Stance on Social Responsibility

back to the local community.

Strategic Issues and Problems

never frozen food options.

York, NY: McGraw-Hill.

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