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Principles of Panda Express: casual restaurant chains delivering cuisine

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Panda Express is one of the fastest casual restaurant chains delivering American Chinese cuisine all over headquartered at Rosemead, California. It has almost 2000 outlets in 50 cities of US, the District of Columbia, Puerto Rico, Guam, Canada, Mexico, South Korea and the United Arab Emirates. The first Panda Express was opened in 1983, in Glendale, California. ProductsPanda Express chain offers a variety of American Chinese cuisine inspired dishes. American Chinese cuisine is a kind of Chinese cuisine developed by Americans of Chinese descent. All the dishes served in many restaurants are according to American tastes and often vary significantly from those of China. “Combo meals” are served according to the customer’s choice. No monosodium glutamate is added to any of the food items at Panda Express nor does Panda Express purchase from any suppliers who add monosodium glutamate. Positioning and Market SharePanda Express is a fine dining Chinese food and beverage restaurant chain targeting the youths and adults of middle and upper-income groups. It dominates the competition when it comes to the QSR (quick service restaurant) market for Asian cuisine.

Panda Express has maintained 85 percent of the Asian QSR market, staying ahead of Pei Wei Asian Diner having nearly 11 percent of market share and Pick Up Stix, with just under 4 percent share. But when it comes to the QSR market share as a whole, Panda Express faces ferocious competition. PEST Analysis Political Analysis The United States has a federal government. The political environment here is highly competitive. The heated competition of national election seasons can create hurdles for restaurants by creating an overall atmosphere of negativity. The government is imparting the knowledge of healthier foods, hence can affect the business.

According to the United States Health Menu Choices Act, restaurants with over 20 locations in Ontario, Canada, are now supposed to post the number of calories for food and drinks openly. A change like this can definitely affect purchases of foods including the importing and exporting of the required ingredients for their business. Economic AnalysisDue to the demographic transition in the United States, the demographic dividend is very low. Secondly, people here are unemployed which in turn means that their paying capacity is relatively less. There are many food outlets, which keeps on throwing discounts and offers for the consumers. This again has a great chance of impacting the business. Social Analysis Social analysis is based on what consumers want. In the United States, healthiness is in the main focus presently. This is not only pushed by governmental authorities but asked by the consumers as well. This majorly is affected by the lifestyle of the people. Vegetarian and organic eating is becoming less of a fashion and more of a lifestyle choice, particularly amongst the young generation. Technological Analysis Technology can give a competitive edge to Panda Express. The United States is one nation, which is technologically very advanced and embracing.

Technology is necessary to create packaging, food labels and the quick production of food. The new food business corporations may be lacking in technological power compared to veteran food-based companies such as Panda Express. Apart from this, looking at the competitor analysis, Panda Express has a lot of competition in this food and beverage segment but still stands ahead in the category of Quick Service Restaurants. Competitor AnalysisMajor competitors of Panda Express are Pei Wei Asian Diner, Pick Up Stix and Mc Donald’s. Strengths of Mc Donald’sIt has a Brand Equity worldwide. It occupies the 42 percent of US fast-food business. Mc Donald’s promises the consistency of food it provides. It has a long list of successful food items. It has a huge overseas market. The weakness of Mc Donald’sIt has a declining market share with very weak product development and differentiation. Mc Donald’s has disgruntled franchisees with not a very good taste of products that it offers. Mc Donald’s is facing a slow revenue and income growth.

Strengths of Pei Wei Asian DinerIt is present in more than 190+ locations in the USA and also has some international outlets too. It has an availability of online ordering facility. Its menu has different food varieties; separate food menu for lighter offerings another menu for local and parties with segregation in pricing and a separate menu offering focus more on main items with high volume. There are not many players in the market offering Chinese Asian cuisine. The weakness of the Pei Wei Asian DinerIt has an intense competition to deal with. Its menu does not have product differentiation. The brand is not readily recalled. Strengths of Pick up Stix It has a strong and very rich heritage of many years. It has a chain of more than 70+ restaurants in the segment. It has an online ordering as well as a catering option. It started the concept of gift cards to induce loyalty from the customers. It has an innovative food menu and appealing takeout restaurants. It is adapting well to Chinese flavors to suit the American palate. The weakness of Pick Up StixThe brand image demeaned because some restaurants were shut down. Restrictive menu as it will cater only Chinese cuisine might be a deterrent for trial.

Panda Express has a Unique Selling Proposition of fast and fresh food served at the quickest speed. This is what differentiates it from its competitors. People of the United States are now switching to healthier foods which include organic foods. Panda Express can take it as an opportunity to venture into the market with organic Chinese cuisine. SWOT analysis HELPFUL HARMFULINTERNAL Strengths: 1. It is the largest American Asian Chinese restaurant chain in the United States 2. Panda Express ranks first in service operations and Asian quick-service category restaurants 3. It is one of the earliest entrants into the Chinese food supermarket arena 4. It has been strategically located in shopping malls’ food courts and many other non-traditional venues such as airports, college campuses, and amusement parks 5. It has a successful record of making Asian Chinese cuisine accessible to the United States market Weakness: 1. Restricted to Chinese cuisine thus decreasing its customer base 2. Specialty ingredients which are specifically used in Chinese food might be difficult to import and store EXTERNAL Opportunities:1. There is a huge demand for Chinese cuisine in the US leading to the huge consumer base 2. Introducing more items on its menu by increasing the product mix 3. Venturing into newer markets through product differentiation i.e. organic foods Threats:1. Management of huge human resource can be an issue 2. Strong competition from multi-cuisine restaurants chains 3. Presence of strong competitors within the similar segment of Chinese cuisine. Panda Express can increase its market share by expanding the product mix. This means that the restaurant chain can venture into multi-cuisine restaurant market to increase its consumer base.

Also, it can bring in organic foods to its food menu to meet the demands of healthy foods by the consumers. Panda Express has to work more efficiently day by day to provide fresh and quick food to its consumers so as to maintain its Unique Selling Proposition. The company can also visualize of expanding in other countries too to gain a huge global market share.

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