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High Competition and Supply Chain Problems Research Paper


The two key threats that were identified as part of the strategic analysis are high competition and supply chain problems. Both issues could affect the company’s performance, and thus the proposed alternatives are mainly focused on building resilience to these threats. Executing these alternatives effectively would allow the company to grow further and stabilize its position in the market.

Regain Control from Existing Suppliers

As evident from the analysis, high bargaining power of suppliers is among the crucial problems faced by Panera Bread. This is not uncommon for the food industry, as companies operating in this sector rely on suppliers to provide efficient and high-quality service to consumers (Sullivan, n.d.). Paranikas, Whiteford, Tevelson, and Belz (2015) argue that it is crucial for businesses to regain control in order to avoid supply chain issues. As a way of preventing future problems, companies should seek to bring new value to suppliers and change their demand patterns (Paranikas et al., 2015). For instance, it would be useful for Panera Bread Company to purchase all the required products in local bundles instead of relying on each franchise to restock. Moreover, the company could bring new value to the suppliers by drawing a long-term contract with set prices, which would also help it to avoid price increases (Paranikas et al., 2015). This alternative is cost-effective and affordable, and thus will not raise any issues with the company’s stakeholders. Moreover, it also fits the company’s organizational culture by ensuring quality and sustainability of its supply chain.

Find New Suppliers

Finding new suppliers is a second alternative that might be useful for Panera Bread Company. In order to select new suppliers, it is crucial for the business to measure prospective suppliers’ performance and to gain supplier feedback to ensure high quality, timeliness, and sustainability (Eldridge, 2012). Although this alternative could be helpful in building a reliable supply chain in the future, it could be costly and difficult to switch to other suppliers. For example, the transition could cause the company to fail to restock some of the materials, thus resulting in product shortages. This would affect the company’s reputation, and thus such alternative might be negatively perceived by the stakeholders. Changing suppliers would also draw the attention of Panera Bread’s competitors, who might choose to work with its past supplier.

Improve Marketing

When the bargaining power of buyers and the competition are high, effective marketing can help the company to consolidate its position in the market and attract new customers (Dyer, Godfrey, Jensen, & Bryce, 2016). In the case of Panera Bread, it would be useful to develop a promotional strategy that would attract younger populations, such as teenagers and young adults. Achieving popularity among these consumer groups would allow Panera Bread to be more profitable and create a significant competitive advantage. Although developing and applying a new marketing strategy could be costly for the business, it is likely that the stakeholders would welcome such option, as it could yield positive results in a short amount of time. It would also hurt the company’s competitors that are aiming at similar customer groups.

Conclusion

Overall, these alternatives serve to tackle some of the most pressing issues faced by Panera Bread. Although most of these alternatives would require major resources for development and implementation, they will help the company in the long term by improving its profitability. In addition, improving supply chain management and targeting new customer groups would create a significant competitive advantage, increasing Panera Bread Company’s market share.

References

Dyer, J., Godfrey, P., Jensen, R., & Bryce, D. (2016). Strategic management: Concepts and tools for creating real world strategy. Hoboken, NJ: John Wiley & Sons.

Eldridge, B. (2012). Food Safety Magazine. Web.

Paranikas, P., Whiteford, G. P., Tevelson, B., & Belz, D. (2015). Harvard Business Review. Web.

Sullivan, D. (n.d.). Chron. Web.

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IvyPanda. (2020, October 11). High Competition and Supply Chain Problems. Retrieved from https://ivypanda.com/essays/high-competition-and-supply-chain-problems/

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"High Competition and Supply Chain Problems." IvyPanda, 11 Oct. 2020, ivypanda.com/essays/high-competition-and-supply-chain-problems/.

1. IvyPanda. "High Competition and Supply Chain Problems." October 11, 2020. https://ivypanda.com/essays/high-competition-and-supply-chain-problems/.


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IvyPanda. "High Competition and Supply Chain Problems." October 11, 2020. https://ivypanda.com/essays/high-competition-and-supply-chain-problems/.

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IvyPanda. 2020. "High Competition and Supply Chain Problems." October 11, 2020. https://ivypanda.com/essays/high-competition-and-supply-chain-problems/.

References

IvyPanda. (2020) 'High Competition and Supply Chain Problems'. 11 October.

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