With this evaluation, one can establish the source of uniqueness in a company’s product or service offering and, therefore, what attributes the company should play up in order to attract the target market. Panera Bread, in the intention of entering the Australian market, must carry out a comprehensive, competitive analysis (Sandler and Keefe, 2005. Pg. 49).
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For Panera Bread to succeed in the Australian market, it has to have a clear picture of the locations of the stores of all the leading competitors. First, Gloria Jean’s Coffees has over 480 coffee stores in Australia. Secondly, McDonald’s in Australia had a total of 811 outlets at the end of 2010. Finally, Baker’s Delight has some 122 store locations in Australia. Panera Bread, to succeed in the new market, must invest in setting up a large number of outlets in the key areas of Australia (Lesser, 2005. Pg. 75).
Layout is about the configuration of departments, work centres, and equipment, with particular emphasis on movement of work, customers or materials, through the system (Crall, 2004. Pg. 88). In July 2011, Gloria Jeans introduced an open format store layout that is more relaxed, spacious and puts the coffee machine on display. Both McDonald/McCafe and Bakers Delight have invested in developing layout that has comfortable chairs, with groupings of tables and chairs.
Panera Bread’s layout, on the other hand, includes an average of 4600 square feet of space per outlet. The introduction of a new G-2 café design further enhances the appeal of Panera as warm and appealing to customers. The new design has cosier seats and a brighter and more open display case. Some outlets even have fire places. This is a considerable achievement compared to the competitors (Carysforth, 2006. Pg. 99).
The quality of service and food is the main feature that attracts customers to fast food eating places. McDonald’s drew in customers with its “healthier choices” menu. McDonald’s products carried 85 per cent less trans-fat after using a cholesterol-free oil blend. Bakers Delight, on the other hand, uses real ingredients to produce traditional and gourmet breads.
Gloria Jean’s Coffees has high quality gourmet coffee beans and tea shopping with more than 30 flavours of coffees and teas, including gifts and treats. Compared to its competitors, Panera bread has considerable competitive advantage in the quality of its products. Panera Bread’s signature meal, the artisan bread, contains no preservatives or chemicals.
The high qualities of foods at Panera Bread are essential as it enters the Australian market. Panera bread also has over 20 varieties of bread baked throughout the day, promising high quality products. Panera Bread will surely succeed in dominating the market through its quality products and services (Peter and Donelly, 2011. Pg. 306).
Gloria Jean’s offers training and marketing support to its franchisees. On the other hand, McDonalds offers a generally recognizable brand for the franchisers. However, the initial franchise cost is too high, averaging $1 million. Bakers Delight offers a 16-20 week competency based training to its franchisees. This includes extensive in-house practical and written training. Their initial franchise cost is AUS$700000.
Panera Bread faces a considerable challenge on the franchising operations. Its requirements aim at the highly capitalised candidates, with a net worth of $7 million. This limits the company, considering that it relies on franchises to penetrate into the new market. On the brighter side, franchisees indicated a high level of satisfaction with Panera Bread Company’s concept, support and leadership (Wilson and Blumenthal, 2009. Pg. 85).
Panera Bread Company has maintained considerable liquid assets to enable it to open new outlets without taking on large debts. This results in a rise in annual revenues (Hainess, 2009. Pg. 36).
Performance of Panera Bread
Panera has awards for being the best restaurant in 36 states across several markets segments. In 2004 ,customers ranked Panera Bread the best fast food restaurants in various parts of the United States. Panera created this nationwide renown through the successful implementation of the company’s business model (Panera Bread Company, 2012).
Panera Bread has displayed various marketing capabilities in the high-risk, competitive and labour intensive restaurant business. The addition of “good carb” breads, antibiotic-free chicken, and an artisan line of sweet goods comprised part of a differentiation strategy (Peter and Donelly, 2011. Pg. 30).
Panera chooses sights and café environment using predictive modelling software. The software enables Panera to make accurate projections of revenues and profitability of possible sites. Because this resource has proven hard to duplicate, the site selection and café environment presents considerable competitive capability. This competitive capability is a strength that gives Panera a competitive advantage (Edwards and Economy, 2009. Pg. 84).
Marketing Strategies of Panera Bread
Panera’s marketing strategy entails raising the awareness levels of the company through high quality ads tasty meals. Secondly, Panera boosts awareness and menu trials during meal times. Panera also tries to enhance the view of the restaurants as options for dinner.
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The positive financial results of Panera reveal the success of its strategies (Deeter-Schmelz 2010). Other marketing strategies adopted by Panera Bread include competitive pricing, high food quality, menu theme, signature menu selection, dinning ambience and atmosphere, quality service and superior locations (Ferrell and Hartline, 2011. Pg. 167).
Panera Bread Value Chain Analysis
Panera’s inbound logistics enables the company owned, and franchise cafés to buy dough at a low cost from the company. Therefore, Panera maintains the cost of the dough at a low cost. Panera provides extensive training to all franchises. This corporate level tactic impacts the company’s franchised and company owned stores by enabling Panera to develop systems used by all the cafés thus applying economies of scale to operations (Deeter, 2010. Pg. 380).
Panera produces dough at central locations to take advantage of economies of scale. Café bakeries buy the fresh dough at low cost. As part of its marketing strategies, all franchisees must submit 0.7% of their gross revenues to fund national advertising. Further, marketing administration and 2% must be spent on local advertising.
Panera ensures effective research and development through rolling out menus in selected outlets prior to carrying out a nationwide promotion. Executional and structural, low cost drivers must be implemented to ensure integrated value effect at Panera. The cost reduction across the value chain gave Panera a strong capability (Friel, 2012, pg. 58).
The competitive analysis reveals the various strengths that Panera Bread possess, enabling it to dominate the Australian market. Proper implementation of the strategies in place around the United States will lead to considerable success of Panera Bread in the Australian market segment.
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