If you’ve ever been to Panera Bread, you know you’ll find great tasting breads,
ID: 380440 • Letter: I
Question
If you’ve ever been to Panera Bread, you know you’ll find great tasting breads, bagels, and sweets, steaming coffee, egg soufflés, healthy and hearty soups and sandwiches, cozy booths, and an unhurried atmosphere for talking with friends or working on a laptop. That’s all part of the Panera “experience,” the result of a well-planned and well-executed formula of quality food, reasonable prices, and excellent customer service. In creating Panera, founder and CEO Ron Shaich wanted the best of both worlds: restaurants that offered nourishing food with the speed of fast food and the engaging environment of a sit-down venue. Over the course of 25 years, Shaich brought his vision to fruition. His company started as Au Bon Pain in 1981, acquired the St. Louis Bread Company in 1993, and added bagels in 1996, a step that increased average store volume by 25 percent. In 1997 the company added the “gathering place” business and saw sales volume jump 30 percent in one year. He and his team, armed with sales figures, decided to sell Au Bon Pain and concentrate on the gathering place concept. Today Panera is a leading bakery-café company with more than 300 company-operated restaurants and nearly 600 franchises, and expected growth of about 17 percent in the next few years.1 The Panera concept begins and ends with responding to what customers want. Shaich doesn’t take for granted that he and his managers know what that is. Instead, he regularly visits restaurants and talks to customers. He says that good listening is just part of a strategy that has propelled Panera’s stock up 272 percent since June 2001, compared to 8.3 percent for the S&P 500.2 Why is Panera so popular? The answer is: giving people the food they want in an environment that they want. The friendly, destination atmosphere invites people to spend time, unlike much of the food industry that makes it uncomfortable for people to sit. “We spent two years trying to create environments that people want to sit in,” says Shaich. “Our whole view is: How do we make them feel like this is a place they want to be?” 3 Customers can dine in or take out their favorite breakfast, lunch, snack, dessert, or dinner. Using china plates, bowls, and mugs and metal flatware is a longstanding Panera practice that makes customers feel comfortable and more like they’re eating at home.4 The food is fresh, moderately-priced, and sometimes upscale for a fast-casual restaurant. For example, the Crispani, a recent addition designed to bring more families in for dinner, is a thin-crust pizza available in six varieties, including organic tomato and fresh basil, roasted cremini and shiitake mushroom, and peppered chicken and rosemary.5 Panera has always excelled with quality ingredients. Even the children’s menu offers fresh and healthful choices. All sandwiches feature wholegrain white bread with a soft texture that appeals to children, who don’t usually like darker whole-grain breads. Peanut butter and jelly sandwiches are made with all-natural peanut butter. Grilled cheese and deli sandwiches feature organic American cheese, and each sandwich comes with squeezable organic yogurt and a choice of organic milk, soy milk, reduced-fat chocolate milk, or organic apple juice. The children’s menu prompted Restaurant Hospitality magazine to name Panera the fast-casual division winner in its Best Kids’ Menu in America contest. 6 Panera has received lots of positive feedback. In a poll of 6,000 customers, Panera came out highest in food quality. Another study ranked Panera the top concept out of 110, and still another recognized it as having the highest brand loyalty. To earn such accolades, the entire Panera team must be committed to excellence. That starts with executive planning, guided by the vision set down in a document called Concept Essence. CEO Shaich says management spends a great deal of time focusing on how to execute their concept well. Effective operations management requires local managers who have the technical skills to run restaurants efficiently and the human relations skills to lead and establish trust. Panera empowers managers and staff to make decisions in order to respond to customers and provide outstanding service. The result is a place where both customers and employees like to be. “Panera is a place where there’s a lot of warmth, a lot of opportunity, a lot of challenges that really are approached as a team,” says a middle-level manager. “It’s a place where people grow and learn and bring ideas in order to ultimately provide customers with the best experience they can have at Panera.” Discussion Questions 1. How do Panera Bread’s corporate vision and strategy lead to a competitive advantage in the restaurant industry? 2. How does Panera Bread achieve responsiveness to customers? 3. How does its corporate culture help make Panera Bread a high-performing company?
Explanation / Answer
1. Panera Bread’s strategy focuses on quality food, reasonable prices and excellent customer service and the company vision was to create restaurants that offer nourishing food with the speed of fast food and the engaging environment of a sit down venue. Panera Bread has succeeded in establishing its mission and strategies and made competitive advantage in the restaurant industry by giving people the food they want in an environment they want. The CEO visits the customers in restaurant and talk to them to understand their wants. Panera tries to provide a friendly atmosphere which invites people to spend time and try to make a homely atmosphere so that people feel comfortable like home. They provide fresh and moderately priced food which helped them to receive positive feedback from customers and become highest in food quality.
2. Panera brand achieved responsiveness to customers by providing an excellent environment to dine in and providing high quality fresh food as per the customer’s choice. Instead of assuming the customer wants the CEO Shaich visits the restaurants and talks to customers to understand the customer wants. They tried to make a homely atmosphere by using China plates, bowls and mugs and metal flatware which helped to make the customers comfortable. The high quality food with high quality ingredients in different varieties helped Panera to achieve highest place in food quality in a feedback poll and posses highest brand loyalty.
3. The corporate culture in Panera includes executive planning guided by the vision set down in a document called Concept Essence and management spend lot of time focusing on how to execute the concept well. Local managers need to run the restaurants efficiently using their technical as well as human relations skill to be effective in operations management. Panera empowers managers and staff to make decisions in order to respond to customers and provide outstanding service which makes Panera a place with lot of warmth, opportunity and challenges. Panera provides opportunities for people to grow, learn and bring ideas to provide customers with best experience they can have at Panera ad helps to make Panera Bread a high performing company.