The sale left Pane Bread Company
In 1991, Kane and Isaiah took the company public after selling off the heavily n debt Au Bon Pain Co. Segment in 1993, in favor of the more cafe© style atmosphere of Saint Louis Bread, known as Pane. The sale left Pane Bread Company debt- free, and the cash allowed for the Immediate expansion of Its Bakery-cafe© stores.
BBC quickly became a “fast casual” restaurant empire with 1 ,380 company-owned and franchise-operated and 1 5,200 employees, located across the United States and Ontario Canada selling breads, soup, sandwiches, salads and other artisan bakery Items.
During the recession BBC did not lower prices, they raised them twice incinerating on increasing the “food experience” and investing in its employees as a way to better serve its customers. Resulting in unit increase of 4. 3 % compared too 3. 2% sales decline In the overall Industry.
Pander’s 2009 sales of nearly US $ 2. 8 billion ranked as the largest of the fast casual chains. Pancreas target customers were between 25 and 50 years old and were seeking fresh ingredients and high-quality choices, vise the currently limited and greasy fast food menus.
BBC has designed a broad differentiation strategy which has helped their reparability and growth; In Dalton rivals have found It hard to compete In the fast casual niche BBC. Pancreas strategy is “to provide a premium specialty bakery and cafe© experience to urban workers and suburban dwellers. ” BBC operates in three business segments: company-owned bakery-cafe© operations, franchise operations, and fresh dough operations.
The Bakery Supply Chain delivers dough dally from one of the company’s region fresh dough facilities, BBC believed its supply chain function provided competitive advantage and ensured consistent high quality at it’s bakery- oaf©’s. “As of July 1, 2014, there are 1,818 bakery-cafes In 45 states and In Ontario Canada operating under the Pane Bread, delivering fresh, authentic artisan bread served in a warm environment by engaging associates” (Pane Bread, 2014). Resources: 1. Financial capital 2. Cash generated by operations (sales) 3. Franchises Area Development Agreements 1 OFF continued royalties AT on sales 1 .
% of sales to a company-run national advertising fund 2% of sales on local advertising 4. Utilization of company approved suppliers and distributors 5. Acquisitions 6. Brand name 7. Artisan standards utilizing unique recipes 8.
R & D to create unique Menu items Celebrations New items tested directly in the cafe©’s Made to order grilled breakfast sandwich 9. Restaurant size (average of 4700 sq. Ft. ), ambiance and d©core/furniture placement 10. Point-of-sale cash registers 11.
Ronald Isaiah 12. Louis Kane 13. Employees Professionally trained bakers 14.
Human resources Multi-year bonus program Joint Venture Program 15. Corporate Reputation Capabilities: 1. Management capabilities Dynamic Management Isaiah (hard-driving, analytical strategist focused on operations) Kane (seasoned businessperson with a wealth of real estate and finance connections Managing the Three business segments Company-owned bakery-cafe© operations, franchise operations ; fresh dough operations Intranet- the Harvest Weather applications Managed Wi-If network My Pane -Loyalty program 2.
Manufacturing capabilities Bakery Supply Chain Fresh dough facilities Information systems 3.
Human Resource capabilities E-learning online Training programs Online baking instructions for Bakers Joint Venture program 4. Customer’s service 5. Memorable dinning experience 6. Marketing operation Dough-Anton program Community activities Day -End Dough-Nation program Advertising – “total experience” 7. Purchasing efficiency 8.
Disciplined capital expenditure process Core Competencies: Pane Breads core competencies are it’s distinctive menu with a focus on artisan bread, signature cafe© design, inviting ambiance and operating systems. Finding of Facts: 1 .
The key initiatives of Pander’s growth strategy focuses on growing store profit, increasing transactions and gross profit per transaction, using its capital smartly, and putting in place drivers for concept differentiation and competitive advantage. PC’s concept differentiation has held strong over the years however they are loosing their competitive advantage. Pander’s Bread’s sales growth rate from 2006 (80.
4%) to 2009 (85. 2%) has been increasing at a decreasing rate. The decreasing rate of sales may be attributed to the company’s durability of its marketing strategy and franchise growth strategy.
Pander’s choice to expand upon the total experience vise offering discounts during recession years as other fast casual competition chose to do also affected their bottom line. Pane could have sunk less money in improvements and diversify their inner menu, which historically has been slow due to the lack of dinner options. Offering seasonal selections with hardy/filling meal options like eggplant Parmesan, or beef stew, vise the traditional heavily vegetable laden soups, sandwich salad variations.
Possibly adding more vegetarian and/or gluten free products for diet restricted customers.
The company should have been less cautious about it’s marketing investments and created a stronger advertising presence. By increasing television advertising they would have also increased repeat customers and new business. Increasing franchise-operated bakery-cafes contributions from 3. 1% to the categorical norm of 4% could have offset the cost of increased advertising incurred.
BBC needs to review the franchising program and consider updating outdated policies. Expansion thru franchise growth is not working; bakery-cafe© openings have dropped dramatically since 2006.
PC’s current franchise restrictions are limiting possible revenue opportunities. Pane Bread doesn’t not sell single-unit franchises, so it is not possible to open Just one bakery-cafe©. You must be an experienced multi alienator developer/business person with a minimum net worth of $7.
5 million dollars and meet specific liquidity requirements, open 15 bakery-cafes in a period of 4-6 years. Site selection criteria needs to be reviewed, using the store location, as a marketing strategy is not enough.
There are 50 Cataracts cafes in a 35-mile range of my address, which offer free Wi-If, excellent coffee and sandwiches in a relaxed atmosphere, and there are only six Pane restaurants within that same distance. Cataracts is in grocery stores, kiosks inside Malls, Corporate offices and has a larger resents overseas compared to Pane. The company needs to review some of the limiting franchise restrictions, which would increase the number of investors able to participate in the program. 2 “Pane NAS a commitment to long teen Test Dread In America.
I-resell Take bread made with fresh dough was integral to honoring this commitment. System wide bakery-cafes used fresh dough for sourdough and artisan breads and bagels. The company does have a unique supply-chain operation however it is inefficient and lacking in deliberatively. Franchise owned bakery-cafe©s purchase all of their cough products from sources approved by the company, which requires a major commitment of capital. This vertical integration has made Pane capable of controlling the quality of its signature product, their bread.
The Bakery supply chain does provide a competitive advantage and helps to ensure quality however BBC needs to review the current supply and demand.
In 2009 there were 1380 baker- cafes with only 23 fresh dough facilities to provide daily deliveries, with distribution routes could be anywhere between 300 to 500 miles in range. Distribution ranges room fresh dough facilities need to be reevaluated. Plus in 2009, the company began baking loaves later in the morning to ensure freshness, which would increase the demand for fresh dough.
Investing to build more fresh dough facilities vise franchise or company owned bakery cafes will ease an already burdened supply chain. BBC should take a note from the San Francisco Bakery and put a few fresh dough facilities next to company owned bakery cafes, this will draw customers to see and experience the Pane artisan bread making process and increase bread sales which are the jack bone of the company.
Plus BBC could bake and complete their own sweet goods instead of contracting externally and reducing prep time in bakery-cafe©s nationwide still ensuring quality control, as these items will be made in dough facilities.
Changes in food supply costs and shortages of ingredients will affect income and inclement weather conditions affecting expected deliveries. Which will already stress an inadequate delivery system. By purchasing ingredient from alternate vendors BBC will be able “to force down prices, bargain for higher quality and play mediators against each other” (Wheeled, Hunger, Hoffman, and Bombard, peg. 107, 2015).
Enabling them to increase their weak bargaining power and diffuse climbing prices. Bad crops, or lack of base ingredients will also drive costs.
Utilizing a leased fleet of temperature-controlled vehicles is also an investment without any return on equity to capitalize on as well as the added costs of fluctuating fuel prices. The dough is delivered daily so if for any reason the dough cannot make it to the store sales and brand reputation can suffer. 3.
Pane believed that providing bakery-cafe© operators the opportunity to participate in the success of the bakery-cafe© enabled the company to attract and retain experienced and highly motivated personnel, which resulted in a better customer experience.
While according to the Pane web site Over 90% of our retail management associates are “highly satisfied” with their careers at Pane Bread. However the only employee incentive programs are for a select general managers and multi-unit managers, called Joint Venture. A multi-year bonus program based upon a percentage of the cash flows of the bakery-cafe© they operated. There is room for improvement and thereby ensure consistent knowledgeable customer service.
As of December of 2009, the company employed approximately 12,000 full-time associates (defined as associates who average 25 hours or more per week) and 13, 200 part-time unruly associates. Although AT Pander’s operators participate In teen Jolt Venture, I feel they need to expand the Joint Venture program to offer more incentives for the part time associates and institute an Employee rewards program, to provide the higher level of stability and strong associate engagement and customer service that they truly desire.
BBC uses an E-Learning to provide training for retail associates and on-line baking instructions for its bakers. They could also provide monthly training/meetings for the all bakery cafe© associates to include the franchise associates, and manufacturing facility personnel. The benefits package could be enlarged to enclose the part time associates, which it currently doesn’t. BBC doesn’t really invest in its associates as other competitors do.
For example, Cataracts offers eligible partners (associates) working full-time or part- time comprehensive benefits, including health coverage (medical, dental and vision).
Along with life insurance, disability coverage, vacation and tuition reimbursement, employee assistance, commuter benefits, adoption assistance and more. They also offer a College Achievement plan for full time and part time partners (associates); employees can start or finish a bachelor’s degree with full tuition reimbursement through Arizona State Universities top- ranked on-line degree programs. Pane may have realized that the key ingredients to the successful development of the Pane brand ranged from the type of food it served to the kind of people behind the neuters.
But they sure don’t want to enable them.
Work Cited: Our History, (2014) Pane Bread, Retrieved from: HTTPS://www. Panderer. Com/en- us/company/about-pane/our-history. HTML Careers, (2014), Pane Bread Careers, Retrieved from: HTTPS:// www. Panderer. Com/en-us/company/careers.
HTML Working at Cataracts, (2014), To Be A Partner, Retrieved from: http:// www. Cataracts. Com/careers/working-at-Cataracts Wheeled, Hunger, Hoffman, and Bombard. “Strategic Management and Business Policy: Globalization, Innovation, and Sustainability’ MGM 479. Pearson.