Employing Strategy in a Competitive Environment - Essay Example

? Employing Strategy in a Competitive Environment Create an environmental scan for the Panera Bread indicating the most significant environmental threats and discuss how the company should respond to each threat to ensure that the impact to the business is minimal. In contemporary complex and culturally diverse local and global market, competition is a factor that distinguishes failing businesses from those that succeed. Both local and international business environment consists of almost similar factors that result in the current intricate business competition. Strategic management is essential in necessitating business both short term and long-term development and expansion. However, business professionals have asserted that the formulation and implementation of a working business strategy is an extremely complex process that requires an all-inclusive mechanism. Moreover, consistent evaluation of the company’s strengths, weaknesses, threats and opportunities have as well proved to be very productive and instrumental in the entire process of formulating a workable strategic management plan. This essay will therefore create an environmental scan for the Panera bread company indicating the most significant environmental threats. Panera Bread is a chain of cafe and restaurants in Canada and United States of America. The company’s headquarters are situated in Sunset Hills, Missouri. The Panera Bread also has a bakery for producing fresh breads and other bakery products. Apart from selling breads and other bakery products, Panera Bread sell other products including cold sandwiches, muffins, bagels, soups and salads. Moreover, restaurant businesses in modern markets have proved to be very complicated and competitive. Over the years, the industry has encountered a consistent flow of new entrants that result in increased struggle for any company to make profit. Therefore, the Panera Bread Company has received consistent competition at all levels including specialty foods as well as fast casual dining. The main competitors of Panera Bread are Subways, Starbucks and McDonald’s. Despite the three main competitors, Panera Bread also encounters lively competition from other competitors at local, regional and national level. Increased competition has a negative impact on the company’s market share and revenue. As a result, to sustain its profitability, Panera Bread ought to frequently revisit and amend its menu to attract and sustain new and regular customers, fulfil the ever-changing customer demands and preferences, as well as reacting and responding to various seasons of the year. By consistently changing its menu, Panera Bread would have an advantage over their competitors such as subways and McDonald who do not always change their menu forcing customers to loss interests in their products and services. In addition, in restaurant industry, there is no perfect substitute for food and drinks. Therefore, there is a relatively limited threat on food preparation. However, due to the existence of different operational and cultural background, Panera Bread Company is sometimes compelled to change their coffee selection to meet customers’ needs and cultural demands. Consistent change of coffee selection has emerged to be a very expensive and complicated process for Panera Bread restaurant (Panera Bread Company, 2012). Moreover, the company has created an atmosphere that encourages consistent interaction and consultation among all players in the organisation including the company’s customers. To advance the competence of its employees, the company’s management is as well known for holding consistent strategic meetings with their employees and loyal customers. However, to counter the emerging alternative such as working from home, the company should offer an accommodating atmosphere to its employees in order to facilitate effective and uninterrupted working environment. Moreover, the limited barriers to new entry in restaurant markets have significantly increased in the market. It is sometimes very complicated to maintain customers in the business due to the existence of considerable number new restaurants that are opened daily. To counter the ever-increasing competition in the market, Panera Bread is compelled to alter its menu in order to meet customers’ seasonal wants and diet demands (Solberg, 2000). 2. Based on the environmental scan, evaluate the Panera Bread strengths and evaluate how the company can leverage these strengths to yield a competitive advantage in the marketplace. The Panera Bread is popularly known for its ability to modify its menu to meet the interests and demands of its customers. The company has succeeded in introducing new products and services in the market in to sustain its loyal customers and attract new customers. Moreover, despite its seasonal change to its menu, the company also provides its patron with ideas of producing new products that cannot be replicated by other companies. The Panera Bread has as well succeeded in reducing the pressure of its suppliers by producing its own dough for its bread with most of its suppliers supplying other non-essential goods to the company. Reducing suppliers’ pressures have necessitated consistent supply of the company products and services to its customers. To flourish in modern complicated market, Panera Bread has also introduced very strong and effective marketing campaigns. In their business strategy, the company’s outlets are expected to contribute towards the company’s international marketing campaigns. In addition, with the company’s authentically appealing atmosphere, Panera Bread has a practical and effective strategy to provide services to customers who demand quick services. Despite being less experienced in fast-casual restaurant industry, Panera Bread has overtaken its competitors in providing high quality and providing fast casual services to its customers. The company has successfully penetrated in areas that are highly populated. As a result, the Panera bread company’s plans to venture in highly populated areas have considerably helped the company to reduce the expenses and loss of investing in less populated areas. However, for the company to maintain its current growth and expansion, it ought to come up with an effective policy of preventing new market entrance from dominating its market. Moreover, to fit in the modern complicated market, Panera Bread management should spend most of its income in research and development as well as fulfilling its employees and customers demands and needs (Birkinshaw, Morrison & Hulland, 1995). 3. Identify a significant competitor for Panera Bread and assess how your company will compete against it to maximize profits and create value for stakeholders. At present, the biggest competitor of Panera Bread restaurants is Starbucks cafe chain. Starbucks cafe chain offers almost similar menu to Panera Bread. Apart from penetrating into similar markets, Starbucks has many business outlets in others global markets compared to Panera Bread. However, a part from the experienced competition from Starbucks, Panera Bread has a chance of dominating most of its market by opening more outlets in different parts of the world, investing in new domestic markers as well as expanding its business. Furthermore, Panera Bread has several outlets in many metropolitan areas. However, despite investing in metropolitan areas, Panera Bread has few cafes in metropolitan areas compared to Starbucks. For instance, at presence, Panera Bread has two main restaurants in Miami while in Dallas Panera Bread has less than twelve restaurants. To effectively compete with Starbucks and to deal with transportation problem, Panera Bread ought to open more outlets in Dallas area. Panera Bread Company should also penetrate in other markets such as San Antonio and Austin market. The introduction of many outlets will also help in cutting down the operation and transportation costs. Panera Bread should expand its business in other cosmopolitan markets such as Los Angeles, Miami and New York City. Panera Bread should also understand the fact that customers in new areas requires highly quality food and services. In addition, the pleasing environment provided by Panera Bread will generate loyal customers as well as increase the number of the company’s customers. As Panera Bread inters into the new market, the company will allow its potential owners to work more effectively with their customers. Moreover, business owners will as well gain quick acquaintance to new markets. Business owners will as well be able to deal with any change and challenges in their market. Adequate knowledge on the market will also help owners to be more competent in managing the businesses and become competent business personnel’s in their new market (Thompson, Strickland & Gamble, 2010) 4. Assume that the U.S. economy is in a state of decline requiring modifications to the strategy. Evaluate how the strategy should be modified. Provide a justification of how this will help the company continue to compete in the marketplace. In the situation where a country is on an economy decline, there are always increased cases of unemployment and pressure from customers to spend less amount of money. Therefore, if a company relies on differentiation strategy, it ought to alter its strategy into a cost leadership strategy. If a company is targeting specific section of customers and due to economic decline the targeted segment experience income reduction, the company should considerably minimise the prices of its goods and services as well as its production cost. In most cases, the company that alters its productions costs in accordance with economic changes have market advantages over others. To minimise the negative impact of economy reduction, Panera Bread should lower the prices of its products and services as well as its production costs. Any delay to such changes may be cause disastrous impacts on the company’s development and productivity. Moreover, the company should adopt strategies that will lower its operation cost and reduce the prices of its products and services (Buckley & Ghauri, 2004). 5. Evaluate how global competition may impact the business strategy and determine how the company should respond. Over years, global competition has destabilised operation of a considerable number of local, regional and international companies. Therefore, global competition will increase the demand for differentiation in Panera Bread. Global competitions will raise the pressure to lower prices on products and services. Moreover, increased global competition will force Panera Bread Company to spend most of their resources in promoting its products and services as well as increasing its research and development strategies. Therefore, for Panera Bread to success in modern market, it ought to adopt a strategy of differentiating its services and products and reduce the premium prices of its salads and sandwiches. At present, Panera Bread has adopted a very effective differentiation strategy. The company has also embarked on placing fresh and new products in the table for its customers. Recent statistics have as well indicated that most customers prefer new and fresh services as opposed to outdated products and services. Effective differentiation strategy will enable Panera Bread to have a market advantages over its competitors in both local and international market. The company is also known for producing fresh and high quality dough and coffee. Therefore, for Panera Bread Company to prosper in modern market, it ought to strengthen its differentiation strategy. Moreover, the company should also focus on advancing the freshness of their products as well as reducing premium prices of its products and services. References Birkinshaw, J. M., Morrison, A. J., & Hulland, J. (1995). Structural and competitive determinants of a global integration strategy. Strategic Management Journal, 16(8), 637–655. Buckley, P. J. & Ghauri, P. N. (2004). Globalization, economic geography and the strategy of multinational enterprises. Journal of International Business Studies, 35(2), 81–98. Panera bread company (2012). Retrieved on 31st January 2013 from www.panerabread.com/about/company Solberg, C. A. (2000). Educator insights: Standardization or adaptation of the international marketing mix: The role of the local subsidiary/representative. Journal of International Marketing, 8(1), 78–98. Thompson, A. A., Strickland, A. J., & Gamble, J.E. (2010). Crafting and Executing Strategy The quest for competitive advantage: Concepts and cases: 2009 (17th edition). New York, NY: McGraw-Hill-Irwin. Read More