Panera Bread Case

1. What is Panera Bread’s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Panera Bread is taking? What type of competitive advantage is Panera Bread trying to achieve? Panera Bread utilizes a differentiated strategy. While it should be acknowledged that to some extent all firms in the quick service industry are cost leaders, within that category firms must differentiate themselves further. The food options and free Internet provide points of differentiation that can attract consumers. Panera targets a broad market with this differentiated strategy. The company is seeking to have a competitive advantage in product quality and customer experience within the framework of the quick service business.

2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? Does the company have any core competencies or distinctive competencies? Panera has a few strengths from which it can draw competitive advantage. The food is generally of good quality for the industry. Panera has good profitability for the industry, and this profitability has been stable over the past five years. In addition, there is good balance sheet strength, with strong liquidity and no long-term debt. Operationally, Panera is strong but nothing unusual for the industry. The major weakness for Panera is that it lacks economies of scale relative to other competitors in the industry like Subway. There are no glaring weaknesses, however. For Panera, the major opportunity is to fill in the nation by increasing the density of stores. There is also some opportunity to sell more to existing clients, through product diversification or by encouraging repeat visits. There are also some threats, however. The quick service restaurant industry is characterized by intense