Panera Bread Value Chain

The financial situation of the company was an important resource that enabled it to have a low debt to equity ratio. With the sale of Au Bon Pain for $73 million in cash in 1998 (16-3), and the strategy of not funding franchises, neither invest in their construction, nor their development of bakery-cafes stores, allowed the Panera bread to have the financial resources to keep its debt at low levels over the long term. Franchise also pay advertising fee based on percentage of sales (16-16).Thus, it allowed Panera to release important treasury reserves to undertake major investments in other sectors such as research, development and innovation to be more competitive. Fortunately, these initiatives cannot be easily copied by competitors. As we

The New products on the menu have been designed and developed and then introduced into some of its bakery-cafes and serve to the customers in order to verify and determine and certify that the preparation procedures are consistent and meet high quality standards. The deployment of new recipes throughout the Panera bread distribution chain is linked to their success in test with customers. Panera always wanted to be different and to remain so, the system of research and development put in place to innovate, create and achieve its goals has nothing similar to the one of the competitors and thereby it is difficult to copy because of its learning curve and its constant revision. So research and development system of Panera bread is its resource capacity and strength. For example, the new product development was focused on innovation of foods that customers would want to eat like new products roll out into the company’s periodic or seasonal menu rotations, referred as “Celebrations” or serving antibiotic free chicken (16-13) even though it was more expensive. Panera Breads run as Leader of industry and the competitors are the followers because after the reaction of change from Panera Bread to introduce fuel, protein, dairy foods, etc. in its menu, we later on saw the competitors go to protein based on breakfast (16-13). Panera bread’s research and development strategy supported its marketing strategy. According to Wheelen, Thomas L., J. David Hunger, Alan N. Hoffman, and Charles E. Bamford, “New entrants to an industry typically bring to it new capacity, a desire to gain market share, and potentially substantial resources.” (Pg. 105) Panera understood too soon that its company is in a constantly changing environment and it focused more on the research and development to innovate to keep maintaining its leading position even when competitors in the