summarize and answer questions in the case

Panera BREAD PANERA BREAD OCCUPYING A FAVORABLE POSITION IN A HIGHLY COMPETITIVE INDUSTRY If you analyzed the restaurant industry using Porter's five forces model, you wouldn't be favorably impressed. Three of the threats to profitability--the threat of substitutes, the threat of new entrants and rivalry among existing firms are high Despite these threats to industry profitability, one restaurant chain is moving forward in a very positive direction. St. Louis-based Panera Bread, a chain of specialty bakery cafes, has grown from 602 company-owned and franchised units in 2003 to 2,000 in 2016. In 2009 and 2012, the restaurant review service Zagat named Panera one of the most popular restaurants for eating on the go. Panera was also rated No. 1 for Best Healthy Option, Best Salad, and Best Facilities, among restaurants with fewer than 5,000 locations What is Panera's secret? How is it that this company flourishes while its industry, as a whole, experiences difficulty? Panera Bread's success can be explained in two words: positioning and execution Changing Consumer Tastes Panera's roots go back to 1981, when it was founded under the name of Au Bon Pain Co. and consisted of three Au Bon Pain bakery-cafes and one cookie store. The company grew slowly until the mid- 1990s, when it acquired Saint Louis Bread Company, a chain of 20 bakery-cafes located in the St Louis area. About that time the owners of the newly combined companies observed that people were increasingly looking for products that were "special"- a departure from run-of-the-mill restaurant food They also noted that although consumers were tiring of standard fast-food fare, they did not want to give up the convenience of quick service. This trend led the company to conclude that consumers wanted the convenience of fast food combined with a higher-quality experience - they wanted good food served quickly in an enjoyable environment The Emergence of Fast Casual As the result of these changing consumer tastes, a new category in the restaurant industry called "fast casual emerged. This category provided consumers the alternative they wanted by capturing the advantage of both the fast-food category (speed) and the casual dining category (good food). The owners of Au Bon Pain and Saint Louis Bread Company felt that they could help pioneer this new category, so they repositioned their restaurants and named them Panera Bread. The position that Panera moved into is depicted in the graphic titled "Positioning Strategy of Various Restaurant Chains", see below. A market-positioning grid provides a visual representation of the positions of various companies in an Industry Panera Version of Fast Casual To establish itself as the leader in the fast-casual category and to distinguish itself from its rivals, Panera (which is Latin for "time for bread") added a bonus to the mix - specialty food. The company has become known as the nation's bread expert and offers a variety of artisan and other specialty breads, along with bagels, pastries, and baked goods. Panera Bread restaurants are open for breakfast, lunch and dinner and also offer hand tossed salads, signature sandwiches, and hearty soups served in edible sourdough bread bowls, along with hot and cold coffee drinks and other beverages The company also provides Catering services through its Via Panera catering business. Its restaurants provide an inviting neighborly atmosphere, adding to their appeal Panera even suggests a new time of day to eat specialty foods, calling the time between lunch and dinner "chill-our time. Panera Bread's system wide sales were $2.68 bilion in 2015. Its unique blend of fast casual service and specialty foods also continues to gain momentum. This sentiment is captured in a quote from Mark von Waaden, an investor and restauratour who signed an agreement to open 20 Panera Bread restaurants in the Houston area early in the company's growth spurt Attracted to Panera Bread as opposed to other restaurant chains, von Waaden said My wile. Monica, and I fell in love with the fresh-baked breads and the beautiful bakery-cafes. We think the Panera Bread concept of outstanding bread coupled with a warn, inviting environment is a natural fit with the sophistication that the Houston market represents The spirit of von Waaden's statement captures the essence of Panera Bread By observing trends and listening to customers, its leaders helped the firm carve out a unique and favorable position in a difficult industry Help Annotate otected View Enable Editing Present Status and Goal for the Future Panera's leadership in the fast-casual category and its financial performance has drawn considerable attention to the company. The company serves over six million customers a week system wide, and is currently one of the largest restaurant chains in the United States Awend pooy Casual Dining Apolebes Red Lobster Chili's Fast Casual Panera Bread Chipotle Cosi Unfavorable Position Fast Food McDonald's Wendy's Taco Bell Speed of Service Discussion Questions (In Your Own Words) 1. How has Panera Bread established a unique position in the restaurant industry? How has this unique position contributed to the firm's success? 2. Analyze the restaurant industry using Porter's five forces model - draw diagram as necessary in what ways has Panera Bread successfully posioned itself against the forces that are suppressing the profitability of the restaurant industry as a whole? 3. What is meant by the term bamer to entry in your own words, describe the six major sources of barriers to entry that firms use to restrict entry into their markets. What are some "nontraditional barriers to entry that are particularly suitable for entrepreneurial firms (eg management team strength)? What barriers to entry has Panera Bread created for potential competitors? Describe the significance of these barriers in this case 4. What are Panera Breads prenary sources of competitive advantage in your budgment are these sources of advantage sustainable? Why or why not? you were a direct competitor, describe your strategy to megate or overcome Panera Bread's competitive advantage. Provide detail Discussion Questions (In Your Own Words) 1. How has Panera Bread established a unique position in the restaurant industry? How has this unique position contributed to the firm's success? 2. Analyze the restaurant industry using Porter's five forces model - draw diagram as necessary. In what ways has Panera Bread successfully positioned itself against the forces that are suppressing the profitability of the restaurant industry as a whole? 3. What is meant by the term barrier to entry? In your own words, describe the six major sources of barriers to entry that firms use to restrict entry into their markets. Whaf are some "nontraditional barriers to entry that are particularly suitable for entrepreneurial firms (e.g. management team strength)? What barriers to entry has Panera Bread created for potential competitors? Describe the significance of these barriers in this case. 4. What are Panera Bread's primary sources of competitive advantage? In your judgment, are these sources of advantage sustainable? Why or why not? If you were a direct competitor, describe your strategy to mitigate or overcome Panera Bread's competitive advantage. Provide detail. Application Question 1. Think of at least two other businesses that have established unique positions in their industries. How have their unique positions contributed to their success? Explain. Bruce Barringer, Oklahoma State University R. Duane Ireland, Texas A&M University