Potential Threats facing Panera Bread
- Competition From Well Established Players in the Restaurant Industry
According to statistics related to consumer spending on food, U.S. consumers spend almost $1 billion eating at restaurants. However, the most astonishing fact is that more than 70 percent of the total consumption is recorded in three of the biggest players in the industry. The three big players include McDonald’s, Subway, and Starbucks Coffee. Therefore, the three give Panera Bread the greatest competition and this arises from the fact that they have been in existence for a very long period of time. The three have managed to attract loyal customers and this will prove to be a threat given that Panera is making plans to expand in areas where they have already established a presence (Spinelli 23).
- Unpredictable Changes In Consumer Preferences And Needs
Consumer demand for restaurant meals is highly unpredictable because customers are constantly changing their needs. This is a threat for the company because failure to meet consumer needs would translate to loss of customers and low sales.
- Increased Entry Of New Players In The Market For Restaurant Services
The restaurant industry is relatively liberal in terms of government regulation and this makes it very easy for business to enter the market. In recent times, there has been an increase in the number of restaurant shops across the country and this has the impact of reducing Panera Bread’s current market share. This is a threat based on the fact that consumers are always sensitive and curious when it comes to trying eating at different meals and they may end up being loyal to the new entrants.
Current Business Strategy for Panera Bread
Currently, Panera Bread is pursuing a strategy whereby it is offering a unique and distinctive menu accompanied by ambient signature cafes located in strategic locations. The strategy has offered the company a competitive advantage because it is a shift from the traditional fast food restaurants. The company’s strategy is becoming a better version of the existing traditional restaurants in the United States (Schermerhorn 35).
Recommendations on How to Address the Threats
- The company is currently engaged in constantly revising its menu to meet the ever changing customer needs. This is a good idea but the company should engage in predictive analysis of customer needs by engaging in customer interviews and collecting feedback. This will ensure that the company gets a glimpse of what future customer needs might be like (Spinelli 40).
- The company can increase its healthy offering in its menu in order to compete effectively with established brands.
- Panera Bread has a distinct service that separates it from its peers in the market. However, management should increase their dinner offerings to include menus such as chicken dish and healthy pasta in order to increase customer loyalty. There will be less likelihood that its customers will feed in new restaurants (Hitt and Ireland 56).
Works Cited
Hitt, Michael and Ireland, Duane. Strategic Management With Infotrac: Competitiveness and Globalization. Chicago: Cengage Learning, 2007.
Schermerhorn, John. Management. New York: John Wiley & Sons, 2011.
Spinelli, Stephen and Rosenberg, Robert. Franchising: pathaway to wealth creation. New York: FT Press, 2004.
