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Value Chain :

-Inbound Logistics

Each franchisee purchased dough directly from Panera Bread this means Panera, as the supplier, had an interest to keep prices of dough as low as possible to maintain viable franchise operations.

-Outbound logistics

Each franchisee purchased dough directly from Panera Bread. Each dough making facility was able to produce dough for six bakeries. The fresh dough was sold to both company owned and franchised bakery-cafés at a delivered cost not to exceed 27% of the retail value of the product. These costs margins were achieved by producing the dough at central locations employing economies of scale.

-Operations

Panera provided and required comprehensive front and back of house training, market analysis, and bakery-café certification. This corporate level tactic impacted the company‟s franchised and company owned stores by enabling Panera to develop systems used by all the cafés thus applying economies of scale to operations.

Panera had a policy to not finance new franchisees, area development payment agreements, or hold any equity in the new cafés. This operational model resulted in minimal long-term debt and low capital intensity to expand the Panera brand.

All the cafés offered an assortment of 20-plus varieties of bread baked daily and at least 22 types of sandwiches. Each of these breads and sandwiches were regularly reviewed to determine whether the products matched regular customer needs, new consumer trends, and seasonal relevance. The complexity of the product line enabled Panera to match menu items with a variety of customer needs. This process ensured that weak selling items would be removed limited excess inventory.

-Sales and Marketing

Panera used focus groups to determine customer food and drink preferences, and price points. This work was done by only a few individuals at the corporate level and scaled to the rest of the cafés.

The company tried to grow sales through menu development,...