Case- Panera Bread - MANDATORY CASE STUDY. PDF

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MANDATORY CASE STUDY. ...

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Strategic Management (BUS 403)! Fall Semester 2018

Case: Panera Bread Company in 2016- Is the Company’s Strategy to Rejuvenate Its Growth Working? Issues: •

Panera Bread, a fast-casual restaurant popular in North America has experienced a slow growth in its revenue in the recent past. The growth is termed as slow relative to the growth projected by the top executives of the company. While revenues were increasing at a slower than anticipated rate, the operating costs were also increasing. Panera made considerable expenditure on national televisions ad, launched Panera 2.0, and propelled the MyPanera Loyalty Program. The revenues therefore did not keep pace with the costs as anticipated.

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Panera Bread has made several contributions to enhance social welfare. Its “PayWhat-You-Want” initiative is a reflection the company’s understanding of its corporate social responsibility. However, some of the guidelines that define the program raise a few issues. While the company provides food at a price that the consumer feels is justified as a donation, it also mentions that if they are unable to pay for the food, they must volunteer to work in their community café. The company also mentions in its rubric that those who can’t afford to pay must restrict themselves to one entre and one beverage a week. While their motive is good, it’s not tasteful to make their customers feel obligated and deprived. Their approach to CSR requires certain alterations.

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Panera has contracted the delivery of ingredients and other material to all its cafés to a single supplier. This is my opinion is a big risk. Any fall out with the supplier can lead to interrupted supply of raw materials and hinderance in daily operations.

Recommendations: •

In order to ensure that the actual revenues are keeping pace with the projected revenues, the company needs to monitor its operating costs. An increased operating cost shrinks the size of the profits. Expenditure such as nationwide television advertisements are too expensive and can be avoided. Panera is a well known brand. Advertisements about the company in print and social media would be a better option to reach customers than spend exorbitantly on tv commercials.

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Panera Bread needs to change its strategy towards achieving corporate social responsibility. Although the initiative and the idea behind its -pay-what-you-want store set-up is great. But it comes across as a very distant and obligated responsibility towards the society. If the company is unable to meet the cost of providing the needy with food on a regular basis, they can hold donation potlucks where members of the organization as well as volunteers from their MyPanera Loyalty Program can participate and provide the homeless and the needy with a joyous atmosphere where they feel respected and wanted instead of feeling deprived and worthless.

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Having multiple suppliers is advisable. In case of any fallout with one supplier, the company will have another contacted supplier to fall back upon. Instead of contracting all supplies to one party, ingredients can be procured from numerous suppliers. This will reduce the suppliers bargaining power in comparison to a situation where one supplier is the only player in the company’s bucket.

Case #5 (Panera Bread) Submitted to Prof.. Lorne Mackenzie...