Question

create Industry Analysis (Porter’s Five Forces) on Pandera Bread Company in 2016 Case (from the casebook)

Answer 1

Pandera Bread Company Porter's Five Forces Analysis:

New Entrant Threats — New entrants in Specialty Eateries are introducing creativity, innovative forms of doing business, and placing strain on Panera Bread Company with a reduced price policy, lowering prices, and supplying consumers with different value propositions. To safeguard its competitive edge, the Panera Bread Company must manage all these challenges and build effective barriers. Although it is theoretically feasible for everyone to start an eatery company, prestige is the main drivers for the eateries. In the food industry it is very challenging to achieve credibility, given the experience. Which presents potential applicants with a strong entry barrier. Furthermore, if an organization wants to compete with Panera Bread's likes the requirement for capital expenditure is very high. The operating margins are also small. This causes complicated this specific business.

Buyer's bargaining power — Buyers are also really aggressive. We choose to buy the latest quality goods by charging as small a price as practicable. In the long run, that placed pressure on the profitability of the Panera Bread Business. Panera Bread Company's smaller and more efficient consumer base is the stronger the consumers ' purchasing power and the greater their willingness to pursue rising deals and products. Bargaining power for the vendors is weak. Panera Bread 's principal supply is meal and wheat products. Because the food supply is almost raw material, the company has a lot of options to buy those products. As a consequence the supplier's negotiating power is weak.

Bargaining power of suppliers — Bargaining power for the vendors is weak. Panera Bread's principal source is meal and wheat goods. Since the food source is almost raw material, the business has a number of opportunities to purchase certain goods. As a result the supplier's bargaining power is low. Most of all the businesses buy their raw material from various suppliers in the Specialty Eateries market. The premiums that Panera Bread Company will gain on the market will be reduced by manufacturers in leading position. Strong market providers utilize their bargaining leverage to collect better costs from customers in the area of specialty eateries. The net effect of enhanced retailer negotiating leverage is that it rising gross income.

Threat from Subsitutes -- If a new product or service addresses the expectations of a particular client in various respects, productivity of the sector declines. Services such as Dropbox and Google Drive bypass hardware drives for example. A replacement good or service becomes strongly challenged because it provides a value proposition which is fundamentally distinct from the industry's present offerings. To every company in the sector, that is a huge obstacle. This is strongly correlative of consumers ' purchasing ability. Bakery goods provide a number of alternatives. There are similar alternatives for the baking items or equivalents.

Current rivalry -- When the competition among an industry's current players is extreme then it can push down costs and reduce the industry's overall competitiveness. Panera Bread Company works in a very dynamic market with Specialty Eateries. The rivalry takes toll on the organisation 's total long-term competitiveness. There is a relatively strong competition between related firms. Even the firms seek to distinguish through developing goods and strategies. There is also practice of refreshing menus and offering to be in the interest of the customer. The food items often need daily refresh, as consumers continue to get tired over a period of time with the same commodity.