Panera ventured into a restaurant service known as fast food. This was after noting that customers were increasingly looking for special food, that which is a departure from the normal run-off-the-mill. The other thing was that the customers not only wanted the fast food affair, but also wanted quick service. The outcome of the findings was the conclusion that the consumers wanted a combination of fast food and high quality service (Barringer, and Duane, par 3).
This made the owners of Panera adopt what we can now call Position Strategy. This is a characteristic of the restaurant industries that are called the First Casual. The terms are basically referring to speed and good quality. Their aim to harness the consumers through this has helped them become the leading bread café companies in the USA. The table beloow explains this strategy well.
The company hires well trained bekers with experience in baking.in all their chain of bekeries the bakers craft the bread from scratch to the end. They use the best ingredients to come up with high quality bread. The workers are also highly remunerated. They earn almost 30% higher than the closest competitor. Panera’s services are very timely and they are also ready, or on hand.
Panera effectively identified its strengths, weaknesses, opportunities, and threats, and their after working on them to come up with the leading strategy. Its strengths are: Panera is leading in the country. It has also won the award for sourdough bread. In addition to those, its food is of high quality and it has plausible customer loyalty. The weaknesses that Panera has are the inconsistent soup quality, dinner time amounts to small profits, the brand is not well known in new markets and the brand is becoming too common in St. Luis. The opportunities that are available are the increasing health awareness among the customers, and enough room for expansion. The potential threat is the increasing completion in the market.
Strategic Management Issues
Panera bread still face strategic management issues. The main problem is the ever rising comeption. This is because food chains and dines are responding to demand of fast food. This causes a very stiff competition to the restaurant industry. Good examples are budger King and McDonalds who are now venturing g into the fast food. The other thing is the rising cost of production. This has imposed downward pressure on Panera’s operating cost. Panera has a food menu that is dominated by carbohydrate food. This may cause the customers to look for alternatives that are healthier. Like many industres and restaurants, Panera has been affected by global recession. This is a challenge that it is trying to deal with.
Panera income has increased steadily through the pas three years. However its operating ioncome has come down because of rising cost of production. Wiki analysis shows that:
Panera reported a net income increase of 38% in Q3 (ended September 29, 2009), growing from $13.7 million in Q3 2008 to $18.9 million in Q3 2009. Total revenue grew 6% from $315 million to $335 million, for with operating margins growing from 7.2% to 9.5%. Over the third quarter, Panera opened 19 new bakery-cafes in Q3, increasing its total to 1,362 total stores in operation by the end of Q3. At the same time, comparable bakery-café sales growth increased by 2.8% over Q3 2008 – growth Panera attributes to the introduction of new products, successful marketing, and growth in its catering business (Panera Bread Company, par 4).