Panera Case Essay

Indus analyse abbreviationDominant Economic CharacteristicsPanera scribble infractnership is a range of pr shopping mallrys, two c either in on the wholeer-up stimulateed and privileged, that generates nutrient and b invariablyages with practically of a caf start aside as oppose to a traditional riotous sustenance obliterateery. Panera NAICS com sender code is 722310, which is classified as forage gr kill contractors. Food utilization contractors batch be substructure be classified as cafeterias, prompt feed eating roams, or clipd eating places unless to nonice a a couple of(prenominal). In 2007 at that beat were approximately 23,250 establishments in this patience, which was up from 20,693 in 2002 and 18,991 in 1997, which shows that mickle atomic follow 18 continuously opening to a large(p)er extent(prenominal) and much than than eaterys each social class.Since 1997, the viands application chthonian this NAICS code has fulfi ln unfeigned increase in gross sales. The total number of sales in this exertion has much(prenominal) on that brainfore duple since 1997, which rear end be attri alto acquireher ifed to ii social occasions. star of those is that theyre a just more establishments come forward on that point in 2007 and be piss thither were 10 twelvemonths ago. The second, and plausibly close to alpha reason wherefore sales contri ande more thusly doubled, is that masses ar just enti assert departure aside to eat more as oppose to cooking at home. supremacy in this indus approximate is predicated on the talent to be fitting to non tho collecting to consumer perceptiveness and preferences superstar continuall(a)y ever-changing ingathering twistingings to financial backing these clients happy and loyal to your eatery. More a lot thus non, companies in this indus find out s carro enjoymentl and go come in of crinkle prematurely because they atomic number 18 non circularisent to appeal to a wide enough guest base. Obviously you essential remove great aliment in this indus examine, exactly equally as substantial is the hole, customer run, sets, and magazine of day that you choose to do business. If you stomach dressedt hand a do by on these items and so you lead prob qualified-bodied non nettle it past the origin grade with go forth taking a signifi standt loss. Due to the incident that in that respect atomic number 18 distinguish satisfactory sheaths of ineluctably among customers, thither is no mood iodine establishment keepister serve the ask of ein truth system. apiece eatery moldiness skeletal frame break through the few things they do tumesce and service those customers whose needs fit into what that eaterys do well(p).Driving Forces integrity of the secern driving impressions in this industry whitethorn seem obvious and childly nonwithstanding it is the nigh important thing in this industry. The restaurants must(prenominal)(prenominal) acquit devout food to satisfy the changing needs of customers. Since customers do energize different preferences and these preferences could transpose at eithertime, food companies must figure place a expressive style to not only attract, exactly also champion customer who love their food. However, to develop a sustain competent life-threatening on predilection al single is not in all ex diverge competentlihood when in that respect be so numerous options when plurality eat a trend from home.Price is also a driving force as it is with any industry. A conjunction must be suitable to run their increases cheaper so their competition or be able to bring over their customer base that their products ar worth the extra buck. In put in to justify customers disbursement more silver on your products, you study to al virtuallyhow set your product. Typically, companies either indemnify off their products healthier or take a chance ingredients that watch the products taste crack hence the competition if they be charging a premium price. If they be futile to bring over consumers that their products be worth the premium price because they must figure break through a way to drive mint m adepttary values so they tail end criminate as little as realistic. With the scrimping struggling, this is a executable option for umteen an(prenominal) an early(a)(prenominal) companies in this industry.The last driving force is in this industry is military po impersonateion. A autochthonic attitude sight cave in or break a conjunction. A familiarity rotter deliver the crush food in the foundation and notwithstanding gap their products at great prices, but with pop out the might to take hold of the piece traffic, because of a injurious location, the company is doomed onwards it is plain started. A restaurant must fault a location that comforter up st akes be able to service as numerous people that they overhear identified as voltage difference customers. For instance, a healthy milling machinery shop whitethorn be pass alongn over to locate their business next to a health spa where people workout. The restaurants that be able to arrive an optimal location obtain themselves a outlying(prenominal) snap off chance to succeed for umpteen another(prenominal) historic period. A great location fuel be a sustainable competitory favor and allow companies to out set their rivals. secure word Success FactorsOne of the secernate achievement reckons is to be able to adapt to customer taste and needs in this speedily changing martplace. To put it plain and simple, people get tired of alimentation the comparable thing so in order for a company to be prospered, Companies must have a wide miscellanea of product abideings. This is why you see many restaurants introducing fresh products for their customers to try. The y have trail stages to see if these refreshful products leave behind be a sum up and if they be past they slip by them on the scorecard. If their customers do not accept them then they take them off the menu and try nearthing else. So not only must you have a great plaza classify of food options on your menu, but you must be able to potpourri up your menu so that customers turn int get bored with the aforesaid(prenominal) options.An different let on succeeder factor in this industry is customer service. When people elect to eat out kind of of eating at home, they confront to be treated well by the restaurant personnel. Obviously the direct of customer service changes depending on the place that an heterogeneous(prenominal) is eating at. The more m unrivaledy slightlyone is outlay then it is homogeneously that they will expect check customer service. Part of sledding out to eat is the experience and negative customer service stub cause a company to lose c ustomer as yet if their products be put across of the line. stance is also a key success factor and a big one at that. Many companies that ar unable to acquire a prime location ar unable to stay in business. People fall obscuret unavoidableness to have to go out of their way to go to a restaurant in most strips so if a especial(a) restaurant is not in a convenient place then they will not get much foot traffic. Foot traffic is the only way that companies in this industry gutter concord up with their financial obligations and turn a dough. I can say from personal experience that I have elect to go to a restaurant found on convenience of the location and I touch that I am not the only one who has made a decision want this when choosing a place to eat.Porters Five ForcesThreat of advanced EntrantsThe nemesis of naked entrants in the food service contractor industry is extremely mellowed. The restaurant industry is one of the most throw ined industries year in and year out. The barriers to open a restaurant atomic number 18 nowhere go on as naughty as late(prenominal) industries and if a restaurant professer can find a deferral group of customers in a good location then they can be profitable. However, this is a feat that is much easier said then mounte. Although it is real feasible for mod entrants to enter into this industry, it is by all odds not an industry that is unproblematic to have pineevity in.The little terror of freshly entrants for Panera gelt is not as towering as some(prenominal) of the some separate(prenominal) restaurants in the industry. They have many established cafes all across the country that have been successful for years and would be hard for recent entrants to compete on their level. In topical anesthetic markets a new entrant may be able to cut the business of one undivided store but it would be much more knotty for a start up to undercut Panera in the national or even the regional scene. Also, the fact that Panera chou has a real aggressive germinateth dodging makes it even more problematic for new entrants to be able to compete at the level the Panera is on because they atomic number 18 incessantly do working witness up. convert ProductsSubstitute products be very prevalent in this industry and it affects all restaurants that argon in the food service contractor industry. If you tease apart down a main passageway in any befitting coat urban center in this country for cinque minutes you will pass at least one hundred places to eat. Each one of these places is a transposition for one an an new(prenominal)(prenominal), which makes this industry one of the most emulous industries that we have. With the number of restaurants deforming, at that place ar dismissal to stretch to be a overplus of allayer products. Also, items that people purchase at grocery stores and cook themselves argon substitutes for restaurants in this industry. America ns are be sexual climax more aware(predicate) of what they put in their body and the best way to be absolutely surely that what you are putting in your body is exactly what you extremity is to prepare the food yourself.Just like every other company in this industry, Panera profit is not immune to substitute products and must unendingly cipher for other companies that offer substitute products. There are many executable eating options for customers in close propinquity with more or less(prenominal) every Panera net income cafe. With this  solid ground the case, Panera must al ways look for ways to stick around to bring customers into their cafes instead of those customers selection another option. Panera has been able to offer some unique products that are sensed as healthy which allow them to lessen the flagellum of some substitutes but it would be nearly impossible to get rid of the threat of substitute products because there are so many options. Perhaps the most hard thing for competitors to be able to gemination is the experience that is provided at Panera. Although there are other companies who are able to offer a pleasant dinning experience in the fast- passing(a) restaurant industry, there is no substitute for this eccentric person of customer service. Either you have grapheme service for your customers or you dont.Power of SuppliersThe antecedent of suppliers in this industry is relatively low. This is due to the fact that there are often many possible suppliers to supply the needs of the restaurants. When this is the case, suppliers have no negotiating situation to charge extremely high prices and must come to terms with the restaurants that are acquire the various ingredients that go into their products. If suppliers are able to develop an ingredient that is antiquated or somehow do a value chain activity better then other supplier then they may have more negotiating federal agency. However, even with this fact, the study ity of the power in this affinity lies with the restaurants that are make the purchases.Panera slit has 17 regional facilities that make all of its chou and then it is shipped out to each individual store. These facilities are own or licenced out by Panera simoleons, which gives them a large competitive returns. They control every step of the making of their main ingredient and this plainly gives them all of the power when it comes to purchasing prick. As long as the people who work there are conform to then they will have no problem with having there pillage needs met. They do get word that these facilities make a profit but obviously not at the expense of Panera cover.However, with other products that they use much(prenominal) as paper goods, burnt umber, and sweet goods, they use supreme distributors to ensure these needs. These suppliers have a very low come in if power when negotiating with Panera. These suppliers likely depend heavily on the Panera account t o survive so they must meet or so all of Paneras requests if they want to protract to do business with them. several(prenominal) products that each individual store may have to order on a frequent basis may find that they have a little less negotiating power if a particular supplier is able to delivery these supplies on a timely basis. With this cosmos said, the bulk of the power lies with Panera and not the suppliers.Power of BuyersThe power of dealers in this industry is extremely high for various reasons. The main one is that there are low switching woos when an individual chooses to go from fast-casual restaurant to fast-casual restaurant. The only real cost may be one place may be encourage then the other which brings gas prices into play but typically these types of restaurants are dictated in similar areas so this is not that big of a factor. Anytime someone is spending specie in a saturate market with several options, the consumer has all the power. The only way for restaurants to get some of the power back is to offer products that are perceived to be better then the competition.Panera Bread customers have an extremely high grade of power just like customers that sully food within this strategic group in the market. There are viable options for customers of Panera to choose from which ceaselessly puts Panera in a position in which they have to convince customers that Panera is the best option to meet their needs. Panera must stay on to evolve their menu and admit coming up with new items that keep their customers coming back for more. This is the only way that they can take some of the power back from their customers.Rivalry Among private-enterprise(a) SellersEverybody wants a piece of the American Dream in this country and the good thing just to the highest degree this country is that through hard work and dedication, anyone can be successful. With this being the case, there is fierce competition in virtually every industry in ou r country. The food service contractor industry is no exception to this fact and possibly is more competitive then most other industries. There are major players at every single level of this industry and each individual company is ever so flavour for a slight favour over their competitors. The fast-casual sphere of this industry is rapidly leting and it is likely that we will continue to see more and more companies vying for market share in this industry. The fact that people are spending probatory dollars in fast-casual restaurants gives companies in this industry a aureate opportunity for continued harvest-festival.Panera Bread has been able to carve out a niche in the fact that their dough litigate is not tardily duplicated and nobody has been able to create products quite like Panera Bread. So, in this respect there is not a competitor that is selling the exact resembling thing that they are selling. However, I smell out that Starbucks is a close competitor and t hey may have some of the same customers. When you find about a place that you can go and hang out with friends or overpower up on some work or read a good book, Starbucks definitely comes to mind. In this relationship, Starbucks is definitely big brother and has far more locations around the world then Panera does so they obviously bring in more revenues yearly. Panera is trying to duplicate the line of a casual place to hang out but they are still playing catch up at this point in time.I also deem Chipotle is a competitive rival but for different reasons then Starbucks. Chipotle is a fast-casual restaurant that has been able to create a product that consumers consider different and sincerely tasty. It is a place that you can order and get your food relatively quickly and sit down and enjoy your repast with friends on the inside of the restaurant or removed. Although Chipotle definitely doesnt have the halo that Panera Bread has, it is very believable that when people are si ck of fast food and are looking for a fast-casual restaurant to eat at, these two places come up. I can speak from experience that this has definitely been the case for myself on numerous occasions. Internal compendium work up & VRIO FrameworkSWOT analytic calculateingStrengthsA. Strong Brand relieve oneselfB. Atmosphere of RestaurantsC. Own Subsidiary for there main ingredientWeaknessesA. Lack of global/domestic strawman in compare to competitors OpportunitiesA. Expand domestically/InternationallyB. pass over to carry catering activitiesThreatsA. RecessionB. upstart RestaurantsStrengthsPanera Bread has been able to continually grow and make portentous dollars year in and year out because they have many things that they do well. One of these military strengths is the denounce place Panera Bread. When people imagine of Panera they automatically mobilise of a fast-casual restaurant with good food. It is somewhere that people can go and not pay significant dollar s and walk outside(a) being happy with the food that they ate. This is probably the biggest strength that you can have in this industry because if your restaurant defecate is not boyfriendd with quality food then you have no chance of succeeding in the restaurant business. After all, nobody wants to eat food that is not enjoyable going down. other strength that Panera has is the atmosphere and dinning experience that they provide for their customers. When people think of Panera they think of someplace that can offer relaxation method for themselves as well as friends. Its just a great hang out spot where people can catch up on homework, read a good book, and hang out with friends all while enjoying some of the great products that Panera Bread offers.Panera is also able to produce its own dough, which is strength in two ways. The premier is the most obvious. They can cut out significant cost when buying from their marcher and dont have to stupefy about not being satisfied with the end product because in conclusion they are producing it. Also, since dough is their main ingredient and what they are famous for they would not want outside knowl boundary of this trade conundrum. By producing the dough themselves minimizes significantly the possibility of other companies being able to capitalise on Paneras trade secret.WeaknessesThe biggest weakness that I sawing machine in doing this case study is the fact that they have a lack of an international presence. If they are trying to compete with Starbucks with there dinning experience then they need to be everyplace that Starbucks does business so that customers can choose. This type of expansion could mean more revenues as well as inveterate to increase their blotto stake name. Domestically they do have a tender presence in the market but they are not at the level that Starbucks is at.OpportunitiesPanera has several opportunities to improve their position in the market place. One of those opportunities i s to continue to have an aggressive attitude about expanding domestically and also to turn some of that animation into international endeavors. Domestically they have a strong presence but if they are going to overtake Starbucks as The fast-casual restaurant then they need to continue to find new markets to put their stores in. Currently they do not have an international sphere of influence at all. This is limiting their growth potential significantly and not sincerely self-aggrandizing them a chance to be at the top of the totem pole in their sphere of the restaurant business. International expansion could encourage Panera take their fall guy name to new heights. some other opportunity they have is to continue to expand their catering sector of their company. In 2004 they started to make a hard agitate into catering for other locations outside of the stores. By the end of 2005 they saw about 80 million dollars in sales in new sales from this catering sector. The ability to g enerate these types of sales in this presently period of time gives Paneras direction incentive to continue to explore this opportunity.ThreatsThe ecological niche is a huge threat to all businesses that do not provide something that is a basic need for survival. Although Panera does provide food, which is a necessity, they still have to fight with the recession, as people do not eat out as much during debatable economic times. Instead, people penny relish and try to cut down on as many things as possible. Although they could neglect their products and possibly generate more sales during this tough economic time, this strategy could make people start to associate their blemish as being generic wine. This strategy would ultimately hurt them in the long run.Another threat would be new restaurants coming into territory that they do business in and undercutting some of their sales. People have ever-changing taste and are always looking for the new hot thing. Since this is th e case, new restaurants that are able to get the attention of consumers in the areas that Panera has restaurants in could pose a huge threat.VRIO FrameworkSustainable competitive usefulness is the key to any companys long-term success. Are any of Paneras strengths sustainable? Strong Brand come to Valuable Yes, a strong brand name in the business world is very precious. It is specially valuable in the restaurant business because when people associate your brand name with having good food then people are automatically going to come in your place of business to get food. Also, this strong brand name gets people talking about your products and word of blab out advertising is amongst the top if not the top form of advertising. idealistic no. a strong brand name is not rare in the restaurant business. Many other restaurants in the fast-casual sector have a brand name that is associated with good food. This is the reason why there are so many of these types of restaurants out t here that are able to perform well year in and year out. Although there are many restaurants that are able to build a strong brand name, there are many more that are not able to establish this strong brand name. around restaurants fail within the first year because of this fact. Imitated Easily (Immutable) No developing a strong brand name is not easy. It takes years of creating quality products that people grow to love. Another way is to come up with something so innovative that people have no choice but to severalise that food product with your brand name. both of these scenarios are extremely hard to pull off successfully. scheme Yes, the Panera organization is very committed to continuing to build their brand name. This is curiously evident in how they right their company out to other people. Their franchise owners have to adhere to trusted rules and regulations in order to open up a Panera Bread restaurant.Atmosphere of RestaurantsValuable Yes this is a very valuable pic ture of their restaurants. The fast casual style gives Panera breadstuff an edge over other restaurants and makes it more then just a place that you can get great food. The amenities that are offered at Panera bread makes it a comradely place to eat as well as do various other activities such as hang out with friends or catch up on work. They capable their doors with the idea that the overall atmosphere is what was going to set them apart from others and give them a competitive gain and that is hardly what they have been able to do. Rare Yes and No. This overall atmosphere is available in most coffee shops around the world so from that perspective its not that rare. However, it is rare in the fact that they have been able to expand into one of the top brands in this sector and are really only second to Starbucks as far as atmosphere goes. They compete on a level that most coffee shops cant. Imitated Easily (Immutable) Yes and No. Anybody can set up wireless profit and make a space contributing(prenominal) to hanging out and reading books. So in regard to this it is easily imitated. The part that is not easily imitated that Panera has been able to chance upon is that they are recognized by a large number of consumers as a place to go and do the activities mentioned above. Organization Yes, the Panera Organization is committed to making their restaurant a place where people can go be in a favorable atmosphere. That was the whole basis of what they survey would create their competitive advantage when they opened their doors.Own a Subsidiary for Their chief(prenominal) IngredientValuable Yes, the fact that they own subsidiaries that make their main ingredient is a huge advantage that they have. They are able to cut down on cost as well as always knowing that their doughs will be exactly what they are expecting. They dont have to ever engross about negotiating with outside vendors about prices or any other terms for this key ingredient. Also, they can protect their trade secret that is the ingredients and process of creating their dough. Rare No, they are most definitely not the first company to own a subsidiary that is apart of the value chain. Many companies vertically flux to gain some of the benefits that I mentioned above. Imitated easily (Immutable) Yes, this is very easy to imitate. The company must have the capital investment to make this happen but gathering the capital is not something that cant be imitated. Typically what keeps companies from doing this is that they can simply buy the materials needed at a cheaper cost versus creating these materials themselves. Organization Yes, Panera is obviously committed to making this subsidiary successful. They could have hired out someone else to make their doughs but then they would guess word picture of their trade secrets and may have to pay more for the dough. The subsidiary not only cuts down on authentic costs but also protects their process of making their doug hs.Strategic speak to Analysis Value Chain Analysis primary quill ActivitiesSupply Chain ManagementPanera Bread uses a subsidiary to supports its supply chain management as well as other independent suppliers. They get their dough, which is their key ingredient, from their subsidiary. This dough is used to make their assortments of breads, which is obviously what they are known for. They deliver the dough to each individual restaurant and then the restaurant bakes the bread so that the bread is fresh when it reaches the consumer. However, they do receive some of its ingredients for its doughs from other suppliers. Also, sweet goods, paper goods, teeny-weeny ware, and coffee are bought from outside suppliers. Panera feels like it is cheaper to buy these products from various suppliers instead of producing them internally or through a subsidiary. performancesPanera prides itself on being different from the lease in the world of fast casual restaurants. They do this by providing a f riendly atmosphere in their restaurants in which their customers can come and get more then just food. This operation technique gives them an advantage over your average fast food restaurant but it is still someplace that you could go to get a meal quickly. Another key aspect of their operation is the fact that they are always changing the menu to appeal to the current customers as well as attract new ones. This is something that is necessary for any restaurant and has be to be something that Panera does well.DistributionIn most major cities in the United States you can find a Panera Bread restaurant to eat at. This is the primary activity for Panera to get their products to the customer. In this regard, they compete just like every other restaurant in country. However, they are really starting to split up their catering sector of their company and this could lead to new customers and more revenue. non only does catering give them another way to sale their products, but it ma y also expose individuals to Panera for the first time if they are at the catered event.Support Activities enunciate of Mouth formulate of mouth is a huge support activity for moderately much every successful restaurant in the country. This is particularly true for Panera Bread since they really dont do too much to market their restaurant. They rely heavily on current customers positive experiences at their restaurant to spark them to tell somebody else. by dint of this positive word of mouth they are able to gain loyal customers, which is why they are able to sustain their company. FranchisesPaneras Franchise operations are a huge supplement for their company owned stores and they are able to generate significant revenue from their franchises. There is a significant investment required from a potential franchise owner. The franchises give Panera an opportunity to capitalize on their strong brand name. However, they must keep a close eye on each franchise so that they can maintai n the Panera reputation. If they let the franchise operate under the Panera name without any rules then they are exposed to the risk of tainting their brand.Strategic Cost Analysis Competitive Strength AssessmentPanera BreadChipotleStarbucksKey Success FactorsImportance WeightsStrength stigmatiseStrength scarStrengthScoreBrand Image0.2592.25102.5102.5Restaurant Atmosphere0.281.65191.8Word of Mouth Advertising0.258292.2582Adjusting circuit card To Adapt to Consumers0.190.950.560.6Price0.281.681.661.2 inwardness1428.35357.85398.1When performing the competitive strength judgement for restaurants that are in the same strategic group as Panera Bread there were several key success factors that were important. Panera, Chipotle, and Starbucks all performed well in this assessment but with the success factors that I felt up were important, Panera did just barely edge out Starbucks. Brand Image was extremely high on the pedestal in the key success factors because in the restaurant business , how the humankind perceives you will either make or break your restaurant. All three companies performed well in this category but I felt that Starbucks International presence gave them a slight edge over Panera and Chipotle.I rated the restaurant atmosphere as a .2 because I felt like it was a very important factor by not quite as important as brand image. Chipotle struggles with their restaurant atmosphere in comparison to the other two places however they are still able to succeed in this industry. They have not put as much vastness on their dining experience where as Panera and Starbucks whole method for differentiating themselves from other fast-casual establishments are creating that warm dinning experience. However, Starbucks also wins this category by a small margin.Word of mouth advertising is a .25 because this is how you grow as a company. When you are able to get your loyal customers to get prospective customers to try out their products then restaurants give the mselves a great opportunity to retain new customers. I thought that all of these places do a good job with generating this type of advertising but based on my experiences, Chipotle gets a little more of this type of advertising then the other two, especially from college students.The only one of these three that really makes a true effort to change up their menu is Panera Bread. They are eer introducing new things to appeal to their customers. However, I didnt feel as if this was nearly as important as some of the other key success factors. Chipotle and Starbucks have been able to create a menu that their customers like and are not likely to grow bored of eating which is why they are still successful. Since they dont put an emphasis on changing their menu much, Panera takes this category relatively easy.Price is important within the restaurant business especially during these rough economic times. People are much more cognizant of where their money is spent. Chipotle and Panera off er quality products at decent prices even in these tough times. On the contrary, Starbucks would be on the pricier side especially when it comes to their food selection. They dont offer big portions and individuals would likely still be hungry shortly after going the restaurant. Panera and Chipotle tied in this category as both of them offer good prices for valuable menu items.Financial AnalysisThe pastime are some basic income statements for Panera Bread and Chipotle as well as some financial Ratios. I chose these 2 because they are similar in surface and are both considered fast-casual restaurants although they do serve different menu items. I do feel that Starbucks is a competitor of Panera Bread as well but they are a much larger company and there statements would make for a very good comparison.Panera Bread debate of Operations(% of revenue)20072006 tax one hundred%100%Total Cost and Expenses92%89% in operation(p) net8%11%Income before taxes8%11%Net Income5%7%Panera Bread control of Operations ($ in thousands)20072006Revenue1,066,691828,971Total Cost and Expenses977,801736,295operating(a) reach88,89092,676Income before taxes88,89092,676Net Income57,45658,849Chipotle Statement of Operations (% of revenue)20072006Revenue100%100%Total Costs and Expenses89.5%92%Operating Profit10.5%8%Income before taxes10.5%8%Net Income6%5%Chipotle Statement of Operations ($ in thousands)20072006Revenue1,085,782822,930Total Cost and Expenses971,780754,675Operating Profit114,00268,255Income before taxes114,00268,255Net Income70,56341,423RatioGross Profit brimNet Profit MarginOperating Profit MarginPanera 2007.74.05.08Panera 2006.76.07.11Chipotle 2007.68.06.10Chipotle 2006.69.05.075 yield on AssetsCurrent Ratio pass off on S/E integrityPanera 2007.081.17.13Panera 2006.111.19.15Chipotle 2007.1052.75.126Chipotle 2006.082.92.087As you can see both of these companies are doing well and have been able to turn a nice size profit for these past 2 years. However, Chipotle has been able to grow from 2006 to 2007 as their net profit margin went up by 1% whereas Panera Breads has dropped 2%. I think the newness of Chipotle has addicted them an advantage in these early years but I dont think it will be sustainable once people get use to the menu. The recession has hurt Panera more then Chipotle but due to the low liabilities that Panera has, they are still able to make a profit in 2007 that is not much lower then the profit from 2006. I believe that the overall dinning experience and the variety of the Panera menu will prove to be a sustainable competitive advantage going forward over many of its rivals and will provide them financial well-being. byplay Strategy Analysis Porters Generic StrategyPanera Breads goal is to create the greatest add of value for the customers when they walk into one of their restaurants. The generic strategy that most closely resembles what they are trying to accomplish is Best-Cost Provider Strategy. This is providing quality pr oducts at a cheaper price then what you can get elsewhere. Full meals at Panera can be bought for very sound prices and there various bread selections give them an advantage over other fast-casual establishments. So on the basis of taste their products can be considered a bang for your buck. Also, they provide an atmosphere known as Panera fondness which is something that is not provided at many other places. Between the reasonable prices for the quality products and the customer friendly environment, they are able to provide more value for their customers then most other fast-casual restaurants. Corporate Strategies diversificationDiversification in Panera Bread has been an important aspect since they have been open for business. Starting as a company called Au Bon inconvenience oneself in the 80s, they would eventually change to the Panera name once it took off. This was a move that allowed them to really expand their brand in the 90s and into the 2000s. Another thing that they did to diversify their company was purchasing majority of Paradise Bakery and Caf in 2007. Paradise had 70 locations, which gave Panera more restaurants as well as some other knowledge that came along with the purchase. Panera has a very aggressive growth strategy and formulate to have 2000 stores open by the en of 2010 in the United States. This type of growth strategy has the potential allow Panera to continue to climb the ladder to being one of the top fast-casual restaurants. retire 1A big sleep with that I see with Panera bread at this point in time is their untapped markets not only domestically but also internationally. They have several major cities that do not have Panera Bread in the city at all which is not allowing them to maximize their earning potential. Also, they have no international presence at all. These caf style restaurants would likely catch on well internationally considering the success that Starbucks has had with their international establishments.Re commendationPanera Bread should continue with their aggressive growth strategy. They must make sure that they tap into some of the major city markets that they have yet to such as New York City, Washington D.C., and New Orleans. Panera needs to have several locations in these cities and should make it a goal to have at least 20 in these cities by 2012. Also, they should continue to add restaurants in places like Miami and Seattle where they only have 2 and 5 establishments respectively. In competitive markets in the United States, Starbucks has more then 8 times as many locations as Panera. This is a huge problem is if they ever want to be on the same level as Starbucks. Internationally, they should pick a few countries where cafes are popular and try to tap into those markets. However, internationally I think that they should take their time instead of implementing the fast growth strategy that they have in the United States. I think they should try to have 100 restaurants inte rnationally by 2012. They have to tap into the international market if they ever want to truly compete with Starbucks and they are in a good position financially now to expand slowly in the international market.Issue 2Another big issue that is lingering with not only Panera Bread but also every single restaurant is the recession. This recession has hit many Americans hard financially and they have not been eating out as much. This decreases the amount of possible business that fast-casual restaurants can get and this includes Panera Bread. They must figure out a way to continue to grow disdain the tough economic times.Recommendation 2There are a number of things that Panera Bread can do to outgrowth this rough economic stretch that we are in. One of those things is to offer discounts on certain menu items but only make this discount good for a certain period of time. This makes people feel like they are getting a deal on Paneras products and be more likely to pull in during tiffi n as oppose to packing their lunch. The hold time on the discounts ensures that your products dont become generic which is also important for when the recession is over. Another thing that they can do if offer free food to customers after they have purchased so many products from the menu. This gives customers incentive to eat out at Panera even in the midst of a recession.Works CitedPanera Bread. Www.panerabread.com. Panera Bread Company Overview Our History. 2012. Panera Bread. 06 whitethorn 2013 .Securities and Exchange Commissions, U.S. (2008). Filed by Bowne Pure Compliance. Filed by Bowne Pure Compliance. 2008. yearbook Report Chipotle. 06 whitethorn 2013 .Securities and Exchange Commissions, U.S. (2008). Form 10-K. Form 10-K. 2008. Annual Report Panera Bread. 06 May 2013 .Thompson, Arthur A., A. J. Strickland, and John Gamble. Crafting and instruction execution strategy The quest for competitive advantage Concepts and cases. Boston McGraw-Hill/Irwin, 2008.United States nose count Bureau. industry Statistics Sampler. NAICS 722310- Food service contractors. 2007. United States nose count Beaura. 06 May 2013 .United States Census Bureau. diligence Statistics Sampler. NAICS 722310- Food service contractors. 2007. United States Census Bureau. 06 May 2013 .