Case Study 5.1 Panera Bread
Panera Bread has established a unique position in the restaurant industry by developing itself with various approaches. First of all, Panera Bread has observed the consumer always wanted good food quality and speed services. This has given the Panera Bread an opportunity to reposition itself by joining the concept of fast food and casual dining category. This category provided the consumer the alternative they wanted by capturing the advantages of the both …show more content…
In this case, the threat of substitutes is medium. According to Panera Bread, substitute products can be the food served by closest competitors who are in the fast casual dining sector and those not direct competitors such as restaurants that serve different types food. The other type of substitute product is, food not served in a restaurant for instance, service quality and atmospheres. This exerts a considerable force on the industry as well. In order to stay sustainability, Panera Bread has come out different strategies such as adding specialty food, different menus, catering service, inviting neighborly atmosphere and suggesting new time for specialty food.
Threat of new entrants
The threat of new entrants is high because barriers to entry are low and the pool of entry candidates is large. In the food industry, it is relatively easy to open up a new business and start selling food. The barriers of entry are low because there are little regulations from the government, there are usually no patent or legal protection needed. As a person can raise enough capital, he/she can actually open a new restaurant easily without many restrictions. In this case, Panera Bread has lessened the threat of new entrants by establishing a first-mover advantage in the fast casual dining category.
Bargaining power of supplier
Suppliers can suppress the profitability of the industries by few ways such as high switching cost to change to