Industry & Market
The Panera Bread Company is related to the bakery industry. In particular, Panera Bread operates in the United States and Canada (Thompson, Peteraf, Gamble, & Strickland, 2018).
External Environment
The external environment peculiar to the case can be characterized by the presence of strict sanitary regulations for the production and distribution of food. Thus, the company and its key rivals have to comply with numerous requirements in the countries where they operate.
Internal Environment
There are a few segments in the bakery industry. In general, it includes entrepreneurs who offer ready ingredients and bakeries that manufacture food (such as the company discussed in the case).
Financial Analyses
The sales of bread and flour products are extremely high in the world. In the countries where the Panera Bread Company operates, such products and pastry remain an essential element of any meal.
Economic Condition for Industry
Bakery industry in the United States generates at least $30 billion in revenues every year. The popularity of such goods is not going to decrease even though there are healthy lifestyle trends.
Key Trending Factors
Demographics (those who have children and middle-income people), social (such products are advertised to all groups of economically independent people), economic (the sales of bread and pastry products in restaurants depend upon the wage levels), and environmental ones (a persistent consumption of such products can contribute to diabetes, obesity, and cardiovascular diseases).
SWOT Analysis
- Strengths: The company discussed in the case has received numerous awards due to their products’ high quality; it offers a range of products that are hard to be found in other cafes and restaurants;
- Weaknesses: The presence of an ineffective strategic growth plan, slow revenue growth;
- Opportunities: The company has an opportunity to increase sales with the help of new café design;
- Threats: One of the most important threats is the company’s inability to maintain its unique brand image and stand out from its competitors.
Key issues of the case
Production and brand concept efforts that the company needs to make.
The critical issue of the case that needs attention first
The growth rate lower than expected indicates that the experience of customers should be improved.
Assumptions in recognition of this critical issue
One of the key strategic initiatives of the company was to encourage a 2-5 percent growth in 2016; the popularity of various fast-food chains such as McDonald’s and Subway did not decrease due to the company’s efforts.
Alternatives to address this critical issue
- Ensure the fastest delivery of orders
- Introduce new products to suit every taste and budget
An alternative to implement
The chosen alternative is to improve the delivery service to make sure that clients will make orders again and recommend the restaurant chain to their friends.
The overarching strategy within which this alternative fits
The strategy will include a few important components, such as the creation of the company’s own delivery system and providing discounts and gifts to unsatisfied customers.
The plan to implement this alternative
The company will need to hire enough drivers who have their own cars and create a support team that will be responsible for taking orders and controlling the work of drivers; improve the Panera 2.0 app to enable customers to make orders online.
The critical organizational functions of the organization needed for implementation
Copy and media, budget, human resources, IT.
The processes needed from each of these critical functions for implementation
- Copy and media: advertise new services offered);
- Budget: estimate costs and allocate enough financial resources;
- Human resources: staff up (drivers and support team);
- IT: improve the application to ensure that the information on new orders is received instantly; add new functions such as the virtual assistant; enable customers to fill in the list of products that they do not eat to improve the work of the assistant.
The Balance Scorecard metrics to measure the success of this implementation
- Financial: The company will need to increase sales by at least 5% (special attention must be paid to the work of the delivery department;
- Customer: Using the application and responses via short messages, the company will have an opportunity to measure customer satisfaction. To prove the success of the chosen strategic alternative, the company’s rating should exceed 7 (the maximum rating is 10);
- Internal business processes: Apart from the application, the company will have to analyze the feedback from other sources. The number of people visiting their official website will have to increase by at least 10%;
- Learning: all new specialists will have to pass tests.
Ethical concerns with this critical issue and plan implementation
In general, there are no ethical concerns as such products can be advertised to any social and age group; nevertheless, the application and other advertisements should not promote an unhealthy lifestyle.
Environmental concerns with this critical issue and plan implementation
The company will have to allocate more resources to hire new employees. Thus, additional measures may be needed to maintain a good quality of products.
Social concerns with this critical issue and plan implementation
Even though the company uses only natural ingredients to manufacture its products, it needs to improve its social image to show that bread and pastry products can also be healthy.
Summary of the recommendation and the value this organization may gain from this implementation
In conclusion, I suppose that the strategy focused on improving the delivery service of the company will help the latter to increase the number of standing customers, improve its rating, and maintain its competitive advantage. The strategy includes hiring new employees in order to make Panera more independent from other delivery companies.
Reference
Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. J. (2018). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (21st ed.). New York, NY: McGraw-Hill Education.