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Panera Bread Strategy – Keep Spending in Recession

November 10th, 2010 Comments off

When tough times hit, lots of companies curl up inside a shell and slash spending on things like research & development and expansion thinking that doing so will be the way to survive. Often, though, companies would be better served to pursue strategic plans that focus on growth rather than merely survival during economic downturns. Companies with access to cash and with strong strategic plans have more options with regard to location and competitors that are weak will not be in a position to respond during periods of recession.

Panera Bread Company is a great example of a company that didn’t just survive — it thrived — during the recession. 

Panera has, for a very long time, played for the long term and stayed consistent. Going into the recession, we said, “This is a time to continue with our strategy.”Almost every single one of our competitors said, “We need to pull costs out.” As a consumer, if you walk into their restaurants, the lines are longer, the waits are longer. You have a table next to you with dirty dishes. That is the effect of increasing labor productivity. It has to come out of somewhere.

We’ve continued to invest in labor in our cafés and the quality of our people. We’ve invested in the quality of the food. When everybody pulled back and we did more, the difference between us and our competitors went up.

And we’ve been taking market share. We had near double-digit [same-store sales] for over a year now. The stock has tripled in the recession.

BusinessWeek has the rest of the interview with Panera Executive Chairman and founder Ronald Shaich on its website: http://www.businessweek.com/investor/content/nov2010/pi2010118_183529.htm

Price Fixing = a Perpetual Issue

October 2nd, 2009 Comments off

Price fixing continues to be a battle the feds are fighting even though high-publicity cases such as the one featured in the recent film, The Informant!, have highlighted the legal punishment paid by offenders.

But for all the splashy headlines, stiff sanctions, and caught-on-tape teaching moments generated by the ADM case, price fixing appears to be as pervasive as ever. “We played those videos in antitrust compliance programs for years,” says Kent A. Gardiner, a onetime government antitrust prosecutor who is now chairman of the law firm Crowell & Moring in Washington, D.C. “I guess it didn’t entirely work.”

There seems to be a certain element of society that will skirt the moral boundaries for personal and professional gain…all the ethics courses in the world can’t overcome that, in my opinion.  Perhaps the punishment needs to be more severe?

Price Fixing, the Perpetual Sequel. Feds face a steady stream of pricing conspiracies despite attempts to use the real drama behind The Informant! to shape corporate behavior. Michael Orey. BusinessWeek. September 28, 2009.