Panera Bread Established a Unique Position in the Restaurant Industry by Using the Strategy of Creating a New Category Which Is Called

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Product differentiation is essential for the products especially in restaurant industry in order to be competitive in the market. It is also one of the barriers to entry created by Panera Bread. This is because by having some type of differentiation, Panera can then sets them apart from other rivals including potential rivals that are entering all the time. Panera has a product that is differentiated from their competition, because the company has a high focus on being a specialty bread store. Panera Bread Company produces Artisan breads. Artisan bread utilizes natural ingredients with skilled attention, which differentiates the company from commercial competition. This helps the company become secure in its segment of the market.

As a restaurant established into a franchise, economies of scale need to take place. Initially start-up costs are the most difficult and largest expenses for restaurants, however, once the idea of the restaurant has caught on, revenue begins to increase drastically and the initial fixed costs can be paid. While certain operations and expenses may increase throughout the years, this is simply because the restaurant has opened more stores or needs to meet the needs for a greater number of people. Usually, incoming revenue for these restaurants will offset any increase in prices. As Panera Bread grows bigger, this allows them to reach economies of scale as well as reduce the costs per unit on the supplies they need. For example, all the accessories and fixtures are consistent. Lamps, chairs, tables, art work even carpet and bathroom designs are pre-designed and the company can reduce fixed costs consistently when they open up a new location..

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