• Increased competition.
• Other fast casual dining restaurant options are growing in interest.
• Decent chance of new entrants into the fast casual segment. In 2008 fast casual concepts grew by 4.5%.
• Easy entrance to the field and low market retention rate
• Strategies of Panera may soon get saturated. Others can easily imitate operating model and restaurant ambience and Panera will not be able to differentiate themselves in the market.
• Harder to find a potential locations for expansion.
• Ingredients and raw materials getting costlier.
• Increased hourly wages for workers.
• Heavy dependence on suppliers for items that are not made in-house
• Low cost for customers to change their dining options. …show more content…
• Heavy reliance on a network of local and national suppliers for the delivery of fresh produce.
• Companies like McDonald’s is a real threat, as they are a major competitor in the fast food industry with cheaper options, similarly, Subway offers healthy fresh sandwiches for less. These chains are direct threat to “Panera Warmth”
• Real estate cost rising fast in some huge/major cities.
Major strengths of Panera
Panera Bread is a well-recognized brand in U.S. and Canada and is known for its fresh and good quality bread. They have strong presence with around 1500 locations offering good service with good quality, healthy food. They were able to acquire Paradise Bakery and Café when needed. Financial strength is decent to fund company’s growth and expansion without burdening balance sheet with debt. They have a strong supply chain and distribution infrastructure. They are operating in a steady fast growth and an exciting market segment (fast casual). Their menu is attractive and appealing. Their menu offers food for health and weight conscious population. Their strength is in the bread baking, especially artisan breads. They are nationwide leader in bakery-café segment with high ratings in …show more content…
Their brand recognition and brand presence may not be the best. Currently the number of items or products then offer on their menu is limited. They clearly rely on their current menu items for revenue. They are only present in the U.S and Canada, and their revenue will not grow as fast as other international chains. Strong competitions from other fast casual or similar chains means continuing the market share is very challenging. Panera`s brand name is a little less penetrated into market compared to Applebee`, Chipotle, and Starbucks. In some areas, sales at franchise stores is higher than the company owned stores. Franchise stores will offer a percentage of sales revenue, but if it was company stores it would have had great positive impact on the revenue. Panera`s relies on repeat business, which can grow as a major weakness once the need for marketing and advertising increases when the market share loses (due to an increased competition and reduction of their market share). Compared to other food chains like TinTrum or Chipotle, Panera is more expensive, and their average meal price is $8.50. Resignation of Ronald Shaich will leave Panera with a loss of resource with lot of experience and expertise. For Panera to continue to rise, the company’s new CEO, William Moreton, would need to continue to feed and maintain Panera’s “starter.” From a financial