Panera Bread Company Essay Example for Free

Panera Bread Company Essay Panera Bread Company is regarded as one of the largest company in the United States that has specialized in the production of breakfast and lunch food for its consumers. Panera Bread Company which was in the years back been referred to as An Bon Pain is reported to be producing products such as baked foods, sandwiches, soups among other food products and beverages. The company is reported to have been founded in the year 1987 by Ken Rosenthan with its headquarters situated in Richmond Missouri in the USA. The company operates in divisions namely; franchise segments; who are licensed to carry out business transactions in the name of the company and retailing operations; which covers over five hundred bakery cafes that are reported to be company owned and over six hundred cafes which are franchised operated in more than thirty five states. In the year 1999 it was expanded into a national restaurant. Panera Bread Company has struggled to survive the growing competition and to effectively utilize its opportunities by utilizing the concept of company analysis which is very critical in modern business world. The aim of Panera Bread Company has always been to become a market leader in production of foods and beverages globally by diversifying and reaching to many new markets. In the year 2005, the company was ranked top forty by the Business Week in the annual list of hot growth companies. By that year its earnings was projected at $ 38 Million with an increase of over 40% in profit. In the year 2007, Zagat rated the company to top the list of Overall Food Facilities and Popularity rankings. Panera Bread Company is further recognized for its involvement in community events such as silent auctions, runs and walks by making donations. SWOT Analysis Modern businesses are faced with changing business environments and Panera Bread Company is not exceptional from facing such changes within their business context. By carrying out SWOT analysis, environment analysis is very decisive to Panera Bread Company and it is usually analyzed in two extents; the external environment and internal environment examination within the business perspective. Research reveals that the analysis of external environment illustrates opportunities and threats that exist in the market for a firm that may be either present or impending. On the other hand, internal environment examination depicts the strengths and weaknesses that the business may face in the market place (Anthony, 1998). Strengths Strength in this context can be identified as that distinctive ability posed by a firm and if the company utilizes such an opportunity it can succeed and can gain competitive advantage, over its rivals in the industry. The most common strength associated with Panera Bread Company is that of being a market leader in the food industry and particularly marketing of bread. Research indicates that Panera Bread Company is better placed than its main rivals in the market in that it has significantly acquired larger market share which is attributed to its diversification to various countries in the world, for example it has opened many subsidiaries in Toronto, Canada. It is also reported that the company has a strong brand name of its products which have significantly aided the company in terms of achieving a larger market share. The other strength that the company has is that of the best marketing channels that have aided marketing of packaging solutions products to a wider range of customers (Kotler, 1996). Weakness Weakness in this context can be referred to as any dimension of a firm that possibly will deter the accomplishment of set objectives by the firm and usually considered to comprise the company’s resources, capabilities and assets that are not fully utilized. From the company’s profile it can be noted that Panera Bread Company has weak policies, procedures and regulations that may deter the attainment of target performance of the company in some target markets. It is also reported that recently, the employees are not motivated to work and there has been complains regarding low pay and poor working conditions among others although such reports have not been proved. The management of the company should therefore look for ways in solving such problems that may affect adversely the performance of the employees and thus the overall performance of the company. Also the culture of Panera Bread Company has been under scrutiny and there has been allegation that the company is producing loaves of bread which are of poor quality, an issue that the management should look at it seriously (Anthony, 1998). Opportunities For companies to achieve the set objectives, they have to identify and devise events or features in the business external environment that will give them an added advantage or chance of performing better than their competitors. Such an event or feature can be referred to as an opportunity because it will create more chances to the company by increasing the current proceeds through acquiring a significant market share. Panera Bread Company has opportunities that if utilized will be of great benefit to the firm because it will lead to exploring and reaching to more new markets. Research indicates that there is greater demand for bread products in Africa and the management of Panera Bread Company should open subsidiaries in some of those countries after carefully analyzing the situational analysis in those potential markets. Since Panera Bread Company is among the market leaders in bakery industry; it is perceived to be having a well developed financial foundation and thus does not face any liquidity or cash flow problems. It is for this reason that the company should explore new markets and can compete across the entire market without fearing that its competitors can outdo them financially. However, before competing Panera Bread Company should carry out cost benefit analysis in order to avoid unnecessary expenditure (Brandenburger and Nalebuff, 1995). Threat In business context, a threat is regarded as an event which if not taken care of it may possibly deter the accomplishment of company’s goals e. g. customers declining income and competition among other events deemed to causing danger to the operations of the business. Panera Bread Company is basically faced with intense rivalry in bread and beverages products since many firms have opted to join the market because it is considered profitable. In fact, in some market segments particularly in Canada there has been a significant drop in terms of the company’s market share because new firms has entered the industry. Globalization concept has brought about new inventions and Panera Bread Company is faced with the task of coping with such innovations, for example the task of training and development programs to educate the employees on new technologies might be costly and difficult to acquire; such as the use of on-line marketing techniques and networking facilities (Anthony, 1998). Competitive Strategy According to research, Panera Bread Company has embarked on identification of markets that bread products and beverages can do best and it is through this that the company has sold a lot in the target areas. This strategy is normally referred to as segmentation; where the company has avoided competing entirely across the entire food industry but instead targeting certain markets i. e. bread and some beverages markets. Market segmentation will be an ideal situation for Panera Bread Company since competing across the entire market is expensive and considered to entail a lot of risks that the firm cannot sustain for example unfair competition by its rivals in the market (Bagley and Savage, 2006). This will involve Panera Bread Company marketing staff subdividing the existing market into different subsets of clientele where each division may be chosen as an intended market to be explored with a different marketing mix strategy. In essence, target marketing strategy will involve market segmentation which Panera Bread Company will have to find it on the acknowledgment that any segment comprises of potential buyers of bread products and beverages with diverse needs and dissimilar buying behavior. After carefully developing and subdividing the entire market to segments or the target markets, Panera Bread Company should then position itself on how to carry out the marketing activities in order to meet the overall objective of the corporation. Under this; positioning will imply to the formation of limits for bread products and beverages in the minds of the intended market in relation to the rivalry faced. Positioning of any firm including Panera Bread Company is very essential since it forms the foundation of all the communication of the company that comprise the following; branding, publicity, advertising and packaging among other strategies. Therefore it will be prudent for Panera Bread Company to create a single unique position which will operate as a guide for marketing communications involved thus will aid in transmission of steady image (Cullen and Parboteeah, 2005). HR and its Importance Since the mission statement of Panera Bread Company is clear, that it aims at being the market leader of producing bread products and some beverages not only locally but globally it should implement its marketing strategies particularly in the identified target markets. Implementation is putting in to action whatever plan or strategy that the management had formulated and therefore human resource is the most crucial asset in this stage. Research indicates that any company must motivate and provide clear direction to its human resource in order to attain its objectives. Therefore, Panera Bread Company should clearly identify the needs of its employees and try to meet them in order to give them an ample opportunity to serve diligently and be dedicated to the company. By offering a competitive package and offering performance contracts to the employees; ensures that they perform to the fullest because they will be highly motivated to work. Good leadership and management skills will be essential to Panera Bread Company’s management staff in order to command respect from the employees (Hilltop and Sparrow, 1994). Recommendations Panera Bread Company should note that nowadays, it is possible to use e-business through the internet for distribution purposes especially when dealing with international businesses. Digital innovations coupled with rapid growth in new technologies are changing the way distribution channels for companies and Panera Bread Company is able to use such hi-tech communication channels to monitor progresses in the market places not only in USA but globally. The company should further utilize modern entry market modes which such as Foreign direct Investments and licensing in order to build long-term markets in its target markets. It will be possible to also adopt joint ventures which will make possible for Panera Bread Company to gather enough market information quickly and familiarize itself with the laws, regulations and needs of the customers in the target market (Grant, 2005). Conclusion Panera Bread Company is among the current market leaders in the food industry and therefore stands a better chance of attaining a significant market share as a result of the brand name of its bread products and beverages that are regarded to be of high quality. Every business including Panera Bread Company is faced with challenges and it has to fully adhere to market regulations in order to avoid unfair competition. The concept of globalization cannot be written off either since many firms including Panera Bread Company has diversified to various markets and there are threats and opportunities associated with such globalization. Therefore the company should formulate strategies that are considered global in nature in order to meet the current expectations of the customers in the target customers. Such strategies like build, harvest or divest should be considered by the Panera Bread Company when assessing the performance of its products in its target markets. Management functions of planning, directing, leading and controlling should be adhered to by the management of Panera Bread Company in order to significantly improve the operations of the company by achieving the required targets (Kotler, 1996)