Panera Case Essay

exertion abbreviation prevailing Economic CharacteristicsPanera wampumpeag Comp some(prenominal)(prenominal) is a chain of dischargeerys, twain assure bugger offed and franchised, that provides fodder and b of all timeages with more(prenominal) than(prenominal) of a caf nonplus as oppose to a traditional solid food restaurant. Panera NAICS code is 722310, which is classify as food service contractors. Food service contractors fag end be fill-in be classified ad as cafeterias, fast food restaurants, or regular restaurants just to name a few. In 2007 thither were approximately 23,250 establishments in this effort, which was up from 20,693 in 2002 and 18,991 in 1997, which shows that substanti every last(predicate)y deal argon continuously opening more and more restaurants each socio- sparing class.Since 1997, the food intentness under this NAICS code has seen signifi simplyt jointt increase in sales. The check number of sales in this industry has more new(prenominal)(prenominal) doubled since 1997, which piece of ass be attrisolelyed to twain cabbageics. unrivaled of those is that theyre a just more establishments disc depict brook in that follow in 2007 then in that respect were 10 geezerhood ago. The second, and probably most consequential reason why sales rich person more then doubled, is that pot argon just simply going push through to eat more as oppose to cooking at home.Success in this industry is predicated on the ability to be up to(p) to non sole(prenominal) appeal to consumer taste and preferences still continu e real(prenominal)y ever-changing ingathering straitsings to keep these clients joyous and loyal to your restaurant. More often then non, companies in this industry fail and go verboten of backup prematurely beca routine they argon non adapted to appeal to a wide enough customer base. plain you essential(prenominal) comport great food in this industry, plainly equally as importa nt is the spot, customer service, prices, and clipping of day that you choose to do business. If you dont leave a handle on these items then you provide bidly not make it past the first year with erupt taking a signifi abidet loss. Due to the detail that there argon diametric types of contracts among customers, there is no panache unmatched establishment nominate serve the needs of e very(prenominal)body. Each restaurant must visualise step forward the few things they do well and service those customers whose needs fit into what that restaurants do well.Driving ForcesOne of the pigment teara way(a) forces in this industry may seem obvious and simple merely it is the most important thing in this industry. The restaurants must ingest good food to satisfy the ever-changing needs of customers. Since customers do comport different preferences and these preferences could change at anytime, food companies must figure come out a personal manner to not only attract, but in like manner importanttain customer who love their food. However, to develop a sustain adequate favour on taste alone is not likely when there argon so around(prenominal) a(prenominal) options when nation eat away from home.Price is also a driving force as it is with any industry. A gild must be up to(p) to provide their convergences cheaper then their competition or be adequate-bodied to convince their customer base that their products ar worth the extra buck. In order to condone customers spending more money on your products, you have to abouthow differentiate your product. Typically, companies any make their products better or find ingredients that make the products taste better then the competition if they atomic number 18 charging a insurance premium price. If they argon unable to convince consumers that their products ar worth the premium price then they must figure out a way to drive blast costs so they can charge as little as possible. With the econom y struggling, this is a viable option for many companies in this industry.The last driving force is in this industry is location. A prime location can make or fall flat a company. A company can have the beat out food in the world and stock-still out continue their products at great prices, but without the ability to remove the foot traffic, because of a bad location, the company is doomed forwards it is even exposited. A restaurant must pickax a location that go away be able to service as many people that they have identified as electromotive force customers. For instance, a healthy sub shop may be inclined to locate their business coterminous to a health spa where people exaltedtail itout. The restaurants that ar able to find an optimal location open up themselves a far better guess to succeed for many years. A great location can be a sustainable agonistical advantage and allow companies to outperform their rivals.Key Success FactorsOne of the account mastery chemical elements is to be able to adapt to customer taste and needs in this cursorily changing grocery. To put it plain and simple, people consider tired of eating the same thing so in order for a company to be successful, Companies must have a wide mixed bag of product go gameings. This is why you see many restaurants introducing tender-fangled products for their customers to try. They have trail stages to see if these new products will be a hit and if they are then they keep them on the wit. If their customers do not receive them then they take them off the menu and try something else. So not only must you have a great core group of food options on your menu, but you must be able to change up your menu so that customers dont go bored with the same options. some opposite key success detailor in this industry is customer service. When people elect to eat out instead of eating at home, they expect to be treated well by the restaurant personnel. evidently the direct of c ustomer service changes depending on the place that an individual is eating at. The more money mortal is spending then it is likely that they will expect better customer service. Part of going out to eat is the beat and bad customer service can cause a company to lose customer even if their products are top of the line.Location is also a key success factor and a liberal one at that. Many companies that are unable to acquire a prime location are unable to stay in business. plurality dont want to have to go out of their way to go to a restaurant in most cases so if a particular restaurant is not in a convenient place then they will not break much foot traffic. Foot traffic is the only way that companies in this industry can keep up with their financial obligations and turn a profit. I can say from personal cast birth that I have chosen to go to a restaurant based on convenience of the location and I feel that I am not the only one who has made a decisiveness like this when cho osing a place to eat.Porters Five ForcesThreat of New EntrantsThe threat of new catechumens in the food service contractor industry is extremely high. The restaurant industry is one of the most enteredindustries year in and year out. The barriers to open a restaurant are nowhere near as high as other industries and if a restaurant owner can find a niche group of customers in a good location then they can be profitable. However, this is a feat that is much easier express then done. Although it is very feasible for new entrants to enter into this industry, it is definitely not an industry that is easy to have longevity in.The threat of new entrants for Panera breadstuff is not as high as some of the other restaurants in the industry. They have many established cafes all across the country that have been successful for years and would be hard for new entrants to contest on their level. In local markets a new entrant may be able to undercut the business of one individual store but i t would be much more difficult for a start up to undercut Panera in the national or even the regional scene. Also, the fact that Panera dinero has a very aggressive product strategy makes it even more problematic for new entrants to be able to compete at the level the Panera is on because they are always playing assimilate up.Substitute ProductsSubstitute products are very prevalent in this industry and it affects all restaurants that are in the food service contractor industry. If you ride down a briny street in any decent size city in this country for five transactions you will pass at least one hundred places to eat. Each one of these places is a modesty for one another, which makes this industry one of the most competitive industries that we have. With the number of restaurants maturement, there are going to wrap up to be a plethora of substitute products. Also, items that people purchase at grocery stores and cook themselves are substitutes for restaurants in this indus try. Americans are becoming more cognizant of what they put in their body and the best way to be absolutely sure that what you are putting in your body is exactly what you want is to spring up the food yourself.Just like every other company in this industry, Panera Bread is not immune to substitute products and must always account for other companies that offer substitute products. in that location are many viable eating options for customers in close proximity with nearly every Panera Bread cafe. With thisbeing the case, Panera must always look for ways to lodge to bring customers into their cafes instead of those customers picking another option. Panera has been able to offer some unique products that are perceived as healthy which allow them to lessen the threat 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 difficult thing for competitors to be able to duplicate 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-casual restaurant industry, there is no substitute for this type of customer service. Either you have tone service for your customers or you dont.Power of SuppliersThe origin of suppliers in this industry is comparatively 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 office staff to charge extremely high prices and must exercise to terms with the restaurants that are purchasing the mixed ingredients that go into their products. If suppliers are able to develop an ingredient that is rare or somehow do a mensurate chain activity better then other supplier then they may have more negotiating berth. However, even with this fact, the majority of the power in this relationship lies with the restaurants that are making the purcha ses.Panera Bread has 17 regional facilities that make all of its wampum and then it is shipped out to each individual store. These facilities are owned or franchised out by Panera Bread, which gives them a huge competitive advantage. They control every step of the making of their main ingredient and this obviously gives them all of the power when it comes to purchasing slit. As long as the people who work there are satisfied then they will have no problem with having there dough needs met. They do ensure that these facilities make a profit but obviously not at the expense of Panera Bread.However, with other products that they use such as paper goods, coffee, and sweet goods, they use independent distributors to comely these needs. These suppliers have a very low amount if power when negotiating with Panera. These suppliers likely depend heavily on the Panera account to survive sothey must meet virtually all of Paneras requests if they want to continue to do business with them. Some 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 being said, the pile of the power lies with Panera and not the suppliers.Power of BuyersThe power of secureers in this industry is extremely high for various reasons. The main one is that there are low switching costs when an individual chooses to go from fast-casual restaurant to fast-casual restaurant. The only real cost may be one place may be further then the other which brings gas prices into play but typically these types of restaurants are located in similar areas so this is not that big of a factor. Anytime someone is spending money in a saturated 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 c ustomers have an extremely high degree of power just like customers that buy food within this strategic group in the market. There are viable options for customers of Panera to choose from which always puts Panera in a position in which they have to convince customers that Panera is the best option to meet their needs. Panera must continue to evolve their menu and keep 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 Competitive SellersEverybody wants a piece of the American Dream in this country and the good thing virtually this country is that through hard work and dedication, anyone can be successful. With this being the case, there is cruel competition in virtually every industry in our 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 sing le level of this industry and each individual company is always looking for a slight advantage over their competitors. The fast-casual heavens of this industry is rapidly growing and it is likely that we will continue to see more and morecompanies vying for market share in this industry. The fact that people are spending significant dollars in fast-casual restaurants gives companies in this industry a golden chance for continued growth.Panera Bread has been able to carve out a niche in the fact that their dough process is not soft duplicated and nobody has been able to frame products quite like Panera Bread. So, in this respect there is not a competitor that is selling the exact same thing that they are selling. However, I feel that Starbucks is a close competitor and they may have some of the same customers. When you think roughly a place that you can go and hang out with friends or catch up on some work or read a good book, Starbucks definitely comes to mind. In this relations hip, 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 aureole of a casual place to hang out but they are still playing catch up at this point in time.I also think 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 really tasty. It is a place that you can order and get your food relatively quickly and sit down and enjoy your meal with friends on the inner of the restaurant or removed. Although Chipotle definitely doesnt have the aviation that Panera Bread has, it is very believable that when people are sick of fast food and are looking for a fast-casual restaurant to eat at, these 2 places come up. I can speak from experience that this has definitely been the case for myself on numerous occasions. national Analysis SWOT & VRIO FrameworkSWOT AnalysisStrengthsA. Strong Brand NameB. Atmosphere of RestaurantsC. take Subsidiary for there main ingredientWeaknessesA. Lack of international/domestic presence in coincidence to competitors OpportunitiesA. Expand Domestically/InternationallyB. Continue to expand supply activitiesThreatsA. RecessionB. New RestaurantsStrengthsPanera Bread has been able to continually grow and make significant dollars year in and year out because they have many things that they do well. One of these readinesss is the brandmark name Panera Bread. When people think of Panera they automatically think of a fast-casual restaurant with good food. It is somewhere that people can go and not pay significant dollars and walk away 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 name is not coadjutord with quality food then you have no chance of succeeding in the restaurant business. Afte r 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 repose 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 first is the most obvious. They can cut out significant costs when buying from their ancillary and dont have to worry about not being satisfied with the end product because ultimately they are producing it. Also, since dough is their main ingredient and what they are famous for they would not want away knowledge of this trade closed book. By producing the dough themselves minimizes significantly the possibility of other companies being able to gain on Paneras trade secret.WeaknessesThe biggest weakness that I saw 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 continuing to increase their self-coloured brand name. Domestically they do have a strong 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 is to continue to have an aggressive place about expanding domestically and also to turn some of that energy 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 sto res in. currently they do not have an international orbit at all. This is limiting their growth potential significantly and not really giving them a chance to be at the top of the totem pole in their sector of the restaurant business. International expansion could friend Panera take their brand name to new heights. other opportunity they have is to continue to expand their supply sector of their company. In 2004 they started to make a hard push 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 generate these types of sales in this short period of time gives Paneras guidance incentive to continue to explore this opportunity.ThreatsThe recession 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 n ot eat out as much during tough economic times. Instead, people penny pinch and try to cut down on as many things as possible. Although they could discount their products and possibly generate more sales during this tough economic time, this strategy could make people start to associate their brand as being generic. This strategy would ultimately hurt them inthe 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 the 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 advantage is the key to any companys long-term success. Are any of Paneras strengths sustainable? Strong Brand NameValuable Yes, a strong brand name in the business world is very valuable. It is oddly valuable in the restau rant 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 let the cat out of the bag advertising is amongst the top if not the top form of advertising. Rare no(prenominal) 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 there 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 product s that people grow to love. Another way is to come up with something so innovative that people have no choice but to recognize that food product with your brand name. Both of these scenarios are extremely hard to pull off successfully. Organization Yes, the Panera organization is very committed to continuing to build their brand name. This is especially evident in how they franchise their company out to other people. Their franchise owners have to adhere to certain rules and regulations in order to open up a Panera Bread restaurant.Atmosphere of RestaurantsValuable Yes this is a very valuable looking at of their restaurants. The fastcasual agency gives Panera bread 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 friendly place to eat as well as do various other activities such as hang out with friends or catch up on work. They opened their doors with the idea that the overall atmosphere is what was going to limit them apart from others and give them a competitive advantage and that is precisely 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 purview 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 internet and make a space conducive 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 win 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 friendly atmosphere. That was the whole basis of what they thought would create their competitive advantage when they opened their doors.Own a Subsidiary for Their Main 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 worry 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 repute chain. Many companies vertically integrate 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 m oney is not something that cant be imitated. Typically what keeps companies fromdoing 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 endangerment characterization of their trade secrets and may have to pay more for the dough. The subsidiary not only cuts down on certain costs but also protects their process of making their doughs.Strategic Cost Analysis Value Chain AnalysisPrimary 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, small 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.OperationsPanera prides itself on being different from the bundle up in the world of fast casual restaurants. They do this by providing a friendly 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 fo r any restaurant and has proven 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 theirproducts to the customer. In this regard, they compete just like every other restaurant in country. However, they are really starting to pick up their catering sector of their company and this could lead to new customers and more revenue. Not only does catering give them another way to sale their products, but it may also expose individuals to Panera for the first time if they are at the catered event.Support ActivitiesWord of MouthWord of mouth is a huge support activity for pretty much every successful restaurant in the country. This is especially 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. through wit h(predicate) 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 postulate 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 swan 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 Factors splendor WeightsStrengthScoreStrengthScoreStrengthScoreBrand Image0.2592.25102.5102.5Restaurant Atmosphere0.281.65191.8Word of Mouth advertize0.258292.2582Adjusting Menu To Adapt to Consumers0.190.95 0.560.6Price0.281.681.661.2Total1428.35357.85398.1When do the competitive strength assessment 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 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 public 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 proportion to the other two places however they are still able to succeed in thi s industry. They have not put as much importance on their dining experience where as Panera and Starbucks whole order for differentiating themselves from other fast-casualestablishments 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 themselves 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 constantly 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 offer 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 leaving the restaurant. Panera and Chipotle tied in this category as both of them offer good prices for valuable menu items.Financial AnalysisThe avocation are some basic income statements for Panera Bread and Chipotle as well as some fi nancial Ratios. I chose these 2 because they are similar in size 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 Statement of Operations(% of revenue)20072006Revenue cytosine%100%Total Cost and Expenses92%89% direct salary8%11%Income before taxes8%11%Net Income5%7%Panera Bread Statement of Operations ($ in thousands)20072006Revenue1,066,691828,971Total Cost and Expenses977,801736,295Operating Profit88,89092,676Income 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 Profit114,00268,255I ncome before taxes114,00268,255Net Income70,56341,423RatioGross Profit MarginNet Profit MarginOperating Profit MarginPanera 2007.74.05.08Panera 2006.76.07.11Chipotle 2007.68.06.10Chipotle 2006.69.05.075Return on AssetsCurrent RatioReturn on S/E EquityPanera 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 given 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 an d 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. fear Strategy Analysis Porters Generic StrategyPanera Breads goal is to create the greatest amount 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 products at a cheaper price then what you can get elsewhere. Full meals at Panera can be bought for very reasonable 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 Warmth which is something that is not providedat 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 Pain in the 80s, they would finally 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 plan to have 2000 stores open by the en of 2010 in the get together 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.Issue 1A big issue that I see with Panera brea d 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.RecommendationPanera 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, Starbuck s 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 internationally 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 despite the tough economic times.Recommendation 2There are a number of things that Panera Bread can do to blow up 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 lunch as oppose to packing their lunch. The limited 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 May 2013 .Securities and Exchange Commissions, U.S. (2008). Fi led by Bowne Pure Compliance. Filed by Bowne Pure Compliance. 2008. yearbook Report Chipotle. 06 May 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 executing strategy The quest for competitive advantage Concepts and cases. Boston McGraw-Hill/Irwin, 2008.United States Census Bureau. Industry Statistics Sampler. NAICS 722310- Food service contractors. 2007. United States Census Beaura. 06 May 2013 .United States Census Bureau. Industry Statistics Sampler. NAICS 722310- Food service contractors. 2007. United States Census Bureau. 06 May 2013 .