Panera Bread Company: Still Rising Fortunes?
Panera Bread is a renowned restaurant that has come about from the merging of great companies and people. However, the beginning was actually with Au Bon Pain which was started in Boston’s Feneuil Hall as a demonstration bakery. Louis Kane was struck by this store’s growth potential and purchased the business in 1978. Between 1978 and 1981 the company opened 13 stores, but subsequently closed 10 of these stores, in the Boston area and had major debt. Ronald Shaich, a recent graduate from Harvard, opened the Cookie Jar in 1980 and befriended Louis Kane. In 1981, the friends merged the Au Bon Pain and the Cookie Jar to form one business known as Au Bon Pain Co. Inc. The co-CEO’s were able to lower debt, expand the business, and centralized facilities for dough production.
In 1985, the company added fresh made sandwiches to their production when they noticed customer behavior of purchasing a baguette cut in half and using cold cuts brought from home to make sandwiches. This allowed for a new way to reach customers with fast service, all the while staying nutritious. Panera opened in three business segments: company owned bakery-café operations, franchise operations, and fresh dough operations. The key initiatives of Panera’s growth was focused on growing store profit, increasing transaction and gross profit per transaction, use its capital smartly, and put in place drivers for concept differentiation and competitive advantage. During the recession, while other companies were lowering pricing and quality of goods, Panera was doing the opposite. The company instead targeted customer who could afford to spend an average of $8.50 on lunch. So during 2009, the company raised prices twice, on bagels and soups, which enabled the company to provide more for less. This attitude also allowed the company to maintain employees and customer satisfaction. By keeping labor consistent with sales and continuing to invest in its employees as a way to better serve its customers.
In 1985, the company added fresh made sandwiches to their production when they noticed customer behavior of purchasing a baguette cut in half and using cold cuts brought from home to make sandwiches. This allowed for a new way to reach customers with fast service, all the while staying nutritious. Panera opened in three business segments: company owned bakery-café operations, franchise operations, and fresh dough operations. The key initiatives of Panera’s growth was focused on growing store profit, increasing transaction and gross profit per transaction, use its capital smartly, and put in place drivers for concept differentiation and competitive advantage. During the recession, while other companies were lowering pricing and quality of goods, Panera was doing the opposite. The company instead targeted customer who could afford to spend an average of $8.50 on lunch. So during 2009, the company raised prices twice, on bagels and soups, which enabled the company to provide more for less. This attitude also allowed the company to maintain employees and customer satisfaction. By keeping labor consistent with sales and continuing to invest in its employees as a way to better serve its customers.
Cited: Wheelen, Thomas L. and J. David Hunger. Strategic Management & Business Policy. 12th Edition. Boston: Pearson. 2012. Print