The main competition for Panera Bread in the Food Service Industry is not necessarily restricted to coffee shops as I originally thought. Instead I consider Panera’s direct competition as including Bakery-Cafe restaurants such as Starbucks and Einstein Bros. but also Fast Casual such as Chipotle Mexican Grill, Panda Express, Baja Fresh, Q’Doba, and McCallister’s Deli. Panera and all of these restaurants are also in competition with Quick Service Restaurants such as McDonald’s and Jack-In-The-Box, and Casual Dining Restaurants like Applebee’s and Olive Garden. Panera’s competition is effected by buyer power, rivalry among competitive sellers, and substitutions by companies in other segments. There could also be further competition from new entrants.
Fast Casual remains a very attractive option for consumers. Panera is in a state of continuous improvement in adding to their menu to satisfy consumer wants. Panera also capitalizes on competitor weaknesses by offering higher quality pastries than the average Quick Service Restaurant. Most other breakfast restaurants do not have the variety and quality of gourmet pastries of Panera. Panera also uses preemptive strikes by attracting people with comfortable seating, an atmosphere conducive to study, and by the offering of WIFI. Panera exhibits low cost leadership by keeping behind the scenes and production costs lower making the company able to bring down the price to take business from competitors, but not so much that it takes away all of the profit. Panera has captured a niche by catering to the desires of those who want gourmet food without the gourmet price and also by their attention to creating the whole experience for that niche and not just food...
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...ion in rural areas with mom-and-pop restaurants, but that is on a small scale and only affects that small area.
Another item that factors into competition is the value propositions of the restaurants. (Mourdoukoutas, 2013) Panera is known as a seller of fresh bread sandwiches, salads, coffee, and bagels. (Mourdoukoutas, 2013) As I discuss elsewhere in this paper Panera also offers an ambience. McDonald’s is known as a fast hamburger restaurant that sells salads and coffee. Starbucks is known as a place to enjoy a cup of coffee away from home. (Mourdoukoutas, 2013) So if someone comes to an intersection that has all three restaurants, it depends what is on their mind when they stop. If they want fast coffee on the go they will stop at McDonalds. If they want to escape home and office for a leisurely coffee, they will stop at Panera or Starbucks. (Mourdoukoutas, 2013)
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