Panera Bread, an American chain of bakery cafe located in the United States and Canada combines the concept of fast food and fine dining together to serve the customers in the best possible manner. It owns, operates and franchises retail bakery cafes and offers freshly baked breads, bagels, muffins, sandwiches, muffins along with soups, salad, pasta and beverages to a wide range of customers through more than 1600 bakery cafes located in 44 locations (Bloomberg, 2018).
The competitive power of resource or capabilities of an organization is measured to determine where the company stands in the market. The VIRN test that stands for valuable, inimitable, rare and non-substitutable is conducted to examine the sustainable competitive advantage of the company. The more tests a company pass, the better position it holds in the market (Gamble, Petaraf, & Thompson, 2015). The competitive power of Panera Bread is also examined under this four headings:
Is the Resource Competitively Valuable?
The resource available, at its basic should contribute in the company’s strategy to be valuable. The valuable resources serve as the core competencies of the organization that will help it compete in the market (Gamble, Petaraf, & Thompson, 2015). Relating to Panera Bread, it follows the food policy and provide freshly baked/cooked items using clean ingredients. The artificial additions like color, sweetness, flavors and preservatives is avoided by the company. In addition, the customers do not have to wait for longer time to get their orders delivered. The offering of healthier and high end food at reasonable prices in comparison to the competitors like McDonald, Popeye, Olive Garden and Chili make it pass this test (Bruno & Doolin, 2017).
Is the Resource Rare?
Having rare resources will provide the company with uniqueness in the market and the consumers will be ready to pay premium price for its products and services. In case of Panera Bread, the cafes are located at regional shopping malls and trade centers that help it reach the target audience easily making the company a national brand. Similarly, the brand image, team-oriented and dedicated employees, proper supply chain and location enables the company to offer fresh menu items in regular basis that is not possible in every bakery and fast food cafe. The unique combination of fast food and fine dining itself makes the company rare (Custom Essays, 2018).
Is the Resource Inimitable?
The resources of a company are said to be inimitable if the social complexity and causal ambiguity of the resources make it difficult for other companies to copy them. The inimitability of resources help the company to sustain the competitive rivalry in the market (Gamble, Petaraf, & Thompson, 2015). Other companies may copy some of the ingredients used by Panera Bread but copying the entire process of delivering healthy food quickly at lower price in the prime locations is not something that the competitors will be able to do. In addition, copying the practices of offering free refill of beverages, not using artificial additives, using clean ingredients, getting equally qualified employees will be costlier for the competitors to imitate. Thus, Panera Bread passes the test of inimitability too.
Is the Resource Non-substitutable?
If the company’s resources are non-substitutable, it will have competitive advantage over the competitors. For Panera Bread, the ingredients it uses can be acquired by the competitors and they could use new and advanced technology to make better products than that of Panera Bread and substitute it in the market. The competitors of Panera Bread like Starbucks, McDonald, Subway and Popeye are financially strong to invest in research and develop new products that will cater the similar needs of customers in cheaper and more efficient ways. So, the company does not pass this test as there is always chances of better substitute products coming in the market.
To conclude, Panera Bread has competitive advantage in terms of valuable, rare and inimitable resources. However, it needs to pay more attention towards innovation for preventing the effect of substitute products in its business.
References
Bloomberg. (2018, September 21). Company Overview of Panera Bread Company. Retrieved from Hotels, Restaurants and Leisure: bloomberg.com/research/stocks/priv...
Bruno, A., & Doolin, H. (2017, May 4). 15 Things You Need To Know Before Eating At Panera Bread. Retrieved from Delish: delish.com/food-news/a45940/things...
Gamble, J. E., Petaraf, M. A., & Thompson, A. A. (2015). Essentials of Strategic Management: The Quest for Competitive Advantage (Fourth ed.). New York: McGraw Hill Education.
For further actions, you may consider blocking this person and/or reporting abuse
We're a place where students share, stay up-to-date, learn and grow.
Panera Bread, an American chain of bakery cafe located in the United States and Canada combines the concept of fast food and fine dining together to serve the customers in the best possible manner. It owns, operates and franchises retail bakery cafes and offers freshly baked breads, bagels, muffins, sandwiches, muffins along with soups, salad, pasta and beverages to a wide range of customers through more than 1600 bakery cafes located in 44 locations (Bloomberg, 2018).
The competitive power of resource or capabilities of an organization is measured to determine where the company stands in the market. The VIRN test that stands for valuable, inimitable, rare and non-substitutable is conducted to examine the sustainable competitive advantage of the company. The more tests a company pass, the better position it holds in the market (Gamble, Petaraf, & Thompson, 2015). The competitive power of Panera Bread is also examined under this four headings:
Is the Resource Competitively Valuable?
The resource available, at its basic should contribute in the company’s strategy to be valuable. The valuable resources serve as the core competencies of the organization that will help it compete in the market (Gamble, Petaraf, & Thompson, 2015). Relating to Panera Bread, it follows the food policy and provide freshly baked/cooked items using clean ingredients. The artificial additions like color, sweetness, flavors and preservatives is avoided by the company. In addition, the customers do not have to wait for longer time to get their orders delivered. The offering of healthier and high end food at reasonable prices in comparison to the competitors like McDonald, Popeye, Olive Garden and Chili make it pass this test (Bruno & Doolin, 2017).
Is the Resource Rare?
Having rare resources will provide the company with uniqueness in the market and the consumers will be ready to pay premium price for its products and services. In case of Panera Bread, the cafes are located at regional shopping malls and trade centers that help it reach the target audience easily making the company a national brand. Similarly, the brand image, team-oriented and dedicated employees, proper supply chain and location enables the company to offer fresh menu items in regular basis that is not possible in every bakery and fast food cafe. The unique combination of fast food and fine dining itself makes the company rare (Custom Essays, 2018).
Is the Resource Inimitable?
The resources of a company are said to be inimitable if the social complexity and causal ambiguity of the resources make it difficult for other companies to copy them. The inimitability of resources help the company to sustain the competitive rivalry in the market (Gamble, Petaraf, & Thompson, 2015). Other companies may copy some of the ingredients used by Panera Bread but copying the entire process of delivering healthy food quickly at lower price in the prime locations is not something that the competitors will be able to do. In addition, copying the practices of offering free refill of beverages, not using artificial additives, using clean ingredients, getting equally qualified employees will be costlier for the competitors to imitate. Thus, Panera Bread passes the test of inimitability too.
Is the Resource Non-substitutable?
If the company’s resources are non-substitutable, it will have competitive advantage over the competitors. For Panera Bread, the ingredients it uses can be acquired by the competitors and they could use new and advanced technology to make better products than that of Panera Bread and substitute it in the market. The competitors of Panera Bread like Starbucks, McDonald, Subway and Popeye are financially strong to invest in research and develop new products that will cater the similar needs of customers in cheaper and more efficient ways. So, the company does not pass this test as there is always chances of better substitute products coming in the market.
To conclude, Panera Bread has competitive advantage in terms of valuable, rare and inimitable resources. However, it needs to pay more attention towards innovation for preventing the effect of substitute products in its business.
References
Bloomberg. (2018, September 21). Company Overview of Panera Bread Company. Retrieved from Hotels, Restaurants and Leisure: bloomberg.com/research/stocks/priv...
Bruno, A., & Doolin, H. (2017, May 4). 15 Things You Need To Know Before Eating At Panera Bread. Retrieved from Delish: delish.com/food-news/a45940/things...
Custom Essays. (2018). Panera Bread Analysis. Retrieved from Custom Written Essays: 911customessay.com/panera-bread-an...
Gamble, J. E., Petaraf, M. A., & Thompson, A. A. (2015). Essentials of Strategic Management: The Quest for Competitive Advantage (Fourth ed.). New York: McGraw Hill Education.