Success of Panera Bread on the Bakery Industry Essay

Panera Bread Company

Ron Shaich and Louis Kane started Panera Bread in 1981 as Au Bon Pain Company. The company prospered internationally throughout 1980s and 1990s along the east coast of U.S.. It became the dominant and best operator within the bakery-cafe category. The company purchased St. Louis Bread Company, which was a chain twenty bakery-cafes in St. Louis area. After the purchase, St. Louis Company was re-staged and managed comprehensively. However, between 1993 and 1997, the average unit volume of St. Louis increased by 75%. After the changes and improvement in production, the name of the company was changed to Panera Bread. As of 1997, the quality of products, services, and improvement in production indicated that Panera Bread had the potential to be among the leading brands in the country. The company needed all the management and financial resources for it to be potential in the field.

In 1999, all the business units of Au Bon Pain Company were sold with the exception of Panera Bread. They sold the business units and the entire companies were renamed Panera Bread. After the completion of the transactions, the stock of the company grew to over $1 billion and a thirteen-folded shareholder value was created. In 2006, Panera Bread became one of the hot growth companies in Business Week. Panera Bread was also recognized as the best and top performer in the restaurant categories by the Wall Street Journal. The report was in relation to the returns for one, five, and ten years to the shareholders. The company purchased significant shares of Paradise Bakery and Cafe in 2007. The bakery was Phoenix-based having seventy locations in ten different states in both the west and southwest. In 2009, Panera Bread purchased the remaining Paradise bakeries and cafes. As of July 2014, over 1800 bakery-cafes operating in Ontario Canada and 45 different states were under three companies managed centrally. The companies were Panera Bread, Paradise Bakery and Cafe, and Saint Louis Bread. The companies delivered authentic artisan and fresh bread served in environments that attracted clients.Value creation or proposition is a promise made by the company that the value will be acknowledged and delivered to the customer. The customer should belief that the value will be experienced at any cost if the entity promising it is dedicated. In the case of Panera Bread and its subsidiary companies, they adhere to any of the promises of value they make to the customers. Any promise made by the companies is recognized and delivered on time. The growth and development of the company shows that it acknowledges and delivers the value promises to customers. When the value promises are made and offered, the customers will rely on the company: they will keep visiting the company because of the value provided. As a result, the sales will increase leading to increased profits. Panera will then use part of the lucrative profits on growth and development.

Macro and microenvironments refer to the internal and external forces and factors that affect the ability of Panera Bread Company's ability to create and maintain good and stable relationship with customers. Macro environments affecting the company include competition and sources of funds for development. The company is receiving stiff competition from other companies producing bread and other bakery products in different countries. It is a serious challenge to the company because it will not have sufficient market for its products due to large production leading increased supply. Since the company is growing and expanding, it does not have enough funds for growth and development. The only source of adequate funds is financial institutions, which gives the funds as per the size of the company and the security provided. Since it is a growing company, Panera will not provide enough security to acquire enough funds from the financial institutions.

Microenvironments include poor customer relation, lack of trained staff, and employees' motivation. Customer relation is one of the internal factors affecting development of customer relation in Panera Bread Company. For customers to feel comfortable in the company, they should be treated in a polite.....