Panera Bread Case Study
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Panera Bread
Resources
Over 400,000 sq ft of combined fresh dough facilities nationwide
nearly 2000 locations
able to charge higher per customer rather than aim for more customers
Inviting, comfortable atmosphere
Capabilities
Leaders and founders of the Fast Casual segment
Diverse, ever-changing, and healthy menu
“The Harvest”, their personal intranet site
Joint venture program for managers
Core Competencies
Leaders and founders of the fast casual segment
diverse, ever-changing, and healthy menu
Able to charge more per customer rather than get more customers
Joint Venture Program for managers
Finding of Fact 1: Paneras semi-remote locations for their factories could spell trouble in cases of disaster.
Recommendation:
Panera has over 400,000 sq ft of fresh dough facilities that they use to supply their stores with the product they need. These facilities are quite spread out, with only about 20 serving all of the USA. This means that all product from these facilities are destined to be on the road being delivered for a significant amount of time. Over time, the more remote locations of bakery-cafe stores will notice a large delivery cost associated with their specific store.
My recommendation is to build a few more facilities to ensure that the travel costs associated with these long distance deliveries do not continue to build up. The facility cost will be able to pay itself off with the delivery savings that the facility will accrue. The company has a very low amount of debt to deal with, meaning that they would be able to spare some for a new facility placed where it could service the most stores that are also the farthest from a current facility. The Panera delivery trucks drive massive distances, and for each mile driven you have to pay the truck driver, gas, maintenance for the trucks, and even repair work and lost products due to accidents in the worst cases. Lowering travel distance for the drivers would lower all of the associated costs, as well as decrease the chances for accidents simply by lowering exposure time to the outside world.
The new facility could also help with the supply for the nearest facilities as well. By working together the facilities would be able to meet the demand of many more locations while working less strenuously. Two facilities working at half strength would equal one facility going all out, meaning that more facilities would most likely improve employee morale, as well as adding some redundancy to the supply chain to cover up for accidents, disasters, etc.
By gaining a new facility, they could also add additional value to their company. This would make them look better to investors, who could improve the stock value, which would attract more investors, and so on. This would also allow the company to grow their workforce, potentially finding new managers that are looking to progress upwards through the company.
Finding of Fact 2: Panera has lackluster marketing, sometimes not marketing at all for some locations.
Recommendation:
Panera believes that if the location is good enough, they dont need to market it since the location itself will be the marketing. However, marketing a location, especially a new location, is never a bad idea. By funneling a few more fractions of percentages towards marketing locations, Panera will see their foot traffic increase,