nswer the following questions completely. Explain your answers using data and\\o
ID: 465975 • Letter: N
Question
nswer the following questions completely. Explain your answers using data andor examples from the case. 1a. What is Panera Bread’s strategy? - 4 points 1b. Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Panera Bread is taking? - 3 points 2. What type of competitive advantage is Panera Bread trying to achieve? - 4 points 3. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? - 18 points 4. What are the primary components of Panera Bread’s value chain? - 5 points 5a. What does the data in case Exhibit 1 reveal about Panera Bread’s financial performance? - 9 points 5b. How well is the company doing financially? - 9 points (Use the financial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at analysis-based answers to your assessment of Panera’s recent financial performance.) 6. What does the data in case Exhibit 2 reveal about Panera Bread’s operating performance?- 8 points 7. Based on the information in case Exhibit 3, which fast-casual and full-service restaurant chains appear to be Panera’s closest rivals?- 5 points 8. What does Panera Bread need to do to strengthen its competitive position and business prospects vis-a-vis other restaurant chain rivals?- 10 points
Explanation / Answer
The Cost Leadership Strategy: Porter's generic strategies are ways of gaining competitive advantage – in other words, developing the "edge" that gets you the sale and takes it away from your competitors. There are two main ways of achieving this within a Cost Leadership strategy:
differentiation strategy:
Differentiation involves making your products or services different from and more attractive than those of your competitors. How you do this depends on the exact nature of your industry and of the products and services themselves, but will typically involve features, functionality, durability, support, and also brand image that your customers value.
To make a success of a Differentiation strategy, organizations need:
Large organizations pursuing a differentiation strategy need to stay agile with their new product development processes. Otherwise, they risk attack on several fronts by competitors pursuing Focus Differentiation strategies in different market segments.
The Focus Strategy
Companies that use Focus strategies concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, develop uniquely low-cost or well-specified products for the market. Because they serve customers in their market uniquely well, they tend to build strong brand loyalty amongst their customers. This makes their particular market segment less attractive to competitors.
As with broad market strategies, it is still essential to decide whether you will pursue Cost Leadership or Differentiation once you have selected a Focus strategy as your main approach: Focus is not normally enough on its own.
But whether you use Cost Focus or Differentiation Focus, the key to making a success of a generic Focus strategy is to ensure that you are adding something extra as a result of serving only that market niche. It's simply not enough to focus on only one market segment because your organization is too small to serve a broader market (if you do, you risk competing against better-resourced broad market companies' offerings).
The "something extra" that you add can contribute to reducing costs (perhaps through your knowledge of specialist suppliers) or to increasing differentiation (though your deep understanding of customers' needs).
Choosing the Right Generic Strategy: Your choice of which generic strategy to pursue underpins every other strategic decision you make, so it's worth spending time to get it right.
But you do need to make a decision: Porter specifically warns against trying to "hedge your bets" by following more than one strategy. One of the most important reasons why this is wise advice is that the things you need to do to make each type of strategy work appeal to different types of people. Cost Leadership requires a very detailed internal focus on processes. Differentiation, on the other hand, demands an outward-facing, highly creative approach.
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