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March 22, 2017

Project Assignment #3:

The Teaching Note
MANA 4395 Strategic Management
Taylor Clark, Noemi Bravo, Zachary Bourne, Clayton Fitzgerald, Fabio Chavez, and Damian
Project Team #1
Case Questions

1) What are local competitors in the Tyler market doing for their community? How does
Einsteins compare to their competitors in terms of their efforts to enforce corporate social

2) What type of socially responsible practices might Einsteins adopt to help them achieve parity
with their competitors? How would they implement these practices?

3) Do they possess the necessary resources to achieve a more socially responsible model?

4) Why would Einstein Bros. Bagels develop a more community-friendly strategy in Tyler,
Texas? Do the benefits outweigh the costs of establishing CSR initiatives in this particular

5) Would Einstein Bros. Bagels be able to service the needs of their community in Tyler by
becoming a socially responsible company?

6) Should Einsteins change their current business practices to reflect a more socially responsible

Case Responses
1) Einsteins Bagels direct competitors are very involved in the community and they have
established goals and results for corporate social responsibilities.

Panera Bread is very passionate about giving back to the community, especially in a way that
helps feed those in need. Panera Bread created the Day-End Dough-Nation program in which
Panera bakery cafs donate their unsold goods to organizations that provide hunger relief in their
communities. In 2014 Panera bakery cafs donated over $100 million worth of unsold baked
goods to those in need[i]. In addition, Panera Bread also has the Panera Cares Community
Breadbox which collects donations from customers. Half of the donations are used to provide
the same soup served at Panera Bread to local food banks. The other half is donated in cash to
Feeding America in support of their effort to provide quality, nutritious food[ii]. A portion of
cash donations made by customers may be matched by Panera. In 2014 donations raised through
Community Breadbox provided 1.7 million meals to clients served by Feeding America food
banks. Panera bread also holds fundraising nights. An organization arranges a time when their
supporters will come in for dinner. Panera donates 10 to 20 percent of the total tab to the
organization. More than 1900 fundraising nights were held in 2014, yielding more than $187,000
in funds donated back to the organizations[iii]. It is clear that Panera fulfills corporate social
responsibility by taking steps to fight hunger in local communities.

Corner Bakery is also finding ways to increase their Social Corporate Responsibility. In 2014, it
was awarded the annual Environmental Sustainability Award for its commitment to energy
efficiency. They have improved the recyclable content in their packaging and updated their
lighting sources in an effort to reduce their carbon footprint. Each energy efficient Corner
Bakery has reduced its carbon footprint by more than 88,000 pounds of CO2 a year[iv]. In
addition, Corner Bakery has been raising funds for Share Our Strength since 2008 for their No
Kid Hungry campaign to help end childhood hunger in America[v].

Starbucks is very ambitious with their corporate social responsibility goals. In 2008, 75% of their
coffee was ethically sourced and in 2015 99% of their coffee met that criteria. When military
service members were struggling to find jobs post 9/11, Starbucks launched a new veterans
hiring initiative[vi]. Starbucks also has a College Achievement Plan with Arizona State
University, which offers full tuition reimbursement to eligible employees. Starbucks also shows
their concern for the environment by increasing their purchasing of renewable energy to 100%
from 20% in 2008. They have also reduced their consumption of water from 24 gallons per
square foot of retail space to fewer than 18 gallons[vii].
In comparison to these competitors, Einsteins has no goals or programs that fulfill corporate
social responsibility.

[i] 2014 Responsibility Report. (2015). Retrieved from Panera Bread:

[ii] 2014 Responsibility Report. (2015). Retrieved from Panera Bread:

[iii] 2014 Responsibility Report. (2015). Retrieved from Panera Bread:
[iv] Corner Bakery Cafe Wins Environmental Sustainability Award For Commitment To Energy
Efficiency. (2014, October 9). Retrieved from PR Newswire:

[v] Corner Bakery Cafe Surpasses $1 Million in Total Contributions to Share Our Strength.
(2013, November 21). Retrieved from PR Newswire:

[vi] John Kelly. (2016). Global Responsibility Report. Retrieved from Starbucks:

[vii] John Kelly. (2016). Global Responsibility Report. Retrieved from Starbucks:

2) To determine specific ways the Einstein Bros. Bagels franchise location in Tyler, Texas, could
change their methods and company practices to incorporate social responsibility, it is helpful to
understand both their primary activities and their support activities within the value chain, by
conducting a value chain analysis. The results of our analysis are displayed in the following
table, where we evaluated individual activities, determined whether or not they create value for
the typical Einsteins customer, and how they create value.

Primary Supply Chain Activities

Value Chain Activity Description Does it Create How does it create value?
Value? (Yes/No)

Inbound Logistics Shipment of frozen bagels and dough from Yes Many of the products, such as
corporate manufacturing facility, and the meats and cheeses, are
receipt of sliced meats, cheeses, and salad delivered to franchises quickly
kits from commissaries located nearby through the strategic
franchised restaurants. Coffee and other placement of Einsteins
ingredients are received from third-party commissaries.

Einstein Noah Restaurant Group (March 2, 2009). BAGL 10-K Form. Retrieved from
Operations Operations include workers at franchise Yes The specific procedure for
locations preparing the bagels and coffee, bagel and coffee preparation
assembling breakfast and lunch sandwiches, implemented by Einsteins
and keeping the store maintained. ensures consistency of quality
across its franchise locations.

Outbound Logistics The final products are delivered to the Yes The warmly-lit, caf
customers in the well-kept, inviting environment of each
restaurant environment, or through the Einsteins franchise location
drive-through window. Einsteins also encourages customers to sit
distributes some of its excess bagels to down and enjoy their
retail grocers such as Costco. purchase, and the
drive-through is convenient
for customers on-the-go.

Marketing and Sales Einsteins markets its franchises as Yes By tailoring their marketing
sit-down, gourmet bagel restaurants, instead message to students in the
of simply bagel shops.2 Their target many college town locations
market is primarily college students who where their franchisees
want a place to snack, drink coffee, and operate, they have been
simultaneously study for classes, as well as successful at attracting their
middle-aged, working-class men and target market segment.
women who need a laid-back environment
to work on business papers on their lunch
break or after hours.

Service Einsteins offers its customers services Yes Rewarding loyal customers is
beyond the delivery of bagels and coffee in important in gaining trust, and
its franchise locations, by additionally is essential to keeping
offering catering, gift cards, and value deals differential parity with local
for customers who sign up for its reward competitors.

Support Supply Chain Activities

Value Chain Activity Description Does it Create How does it create value?
Value? (Yes/No)

Procurement When making purchasing decisions, the Yes By maintaining a moderate

company takes measures to ensure quality supply of ingredients at all
and freshness by instituting product Einstein Bros. locations, they
guidelines and specifications. ensure the freshness of the
final product.

Technology Development In 2016, Einstein Bros. Bagels partnered Yes The new Egg Stations provide
with Atunes to install Egg Stations at all of a fresher way of preparing the
their locations. eggs, using heat and steam.

Schmelzer, Randi (March 28, 2005). Einstein Brothers Retired As Bagel Chain Turns Gourmet.
Retrieved from
They also take up less counter
space in the kitchens.3

Human Resource Einsteins trains new employees through No Even though there is a set
Development direct management at their company-owned management training program,
and franchisee locations, supplemented by a Einsteins hires primarily
learning management system.4 young student workers, which
means they have a higher
turnover. These employees
also seem to lack direct
supervision at the restaurants.

General Administration The Einstein Noah Restaurant Group, Inc. Yes Hiring new executive officers
has undergone some fairly recent changes with plenty of experience and
in executive administration. Back in 2014, a fresh, new ideas to bring to an
new CEO was voted in, Frank G. Paci, organization is vital to
who has a lot of experience in the food remaining at the top of ones
retail industry, working with such brands as industry.
McAlisters Deli and The Pantry.5

Consider first the inbound logistics and procurement of Einstein Bros. Bagels in Tyler, Texas.
The sourcing of raw materials is a great opportunity for practicing corporate social responsibility.
Many of Einsteins competitors already work with suppliers to ensure that their ingredients are
ethically and responsibly sourced. The key to purchasing Fair Trade materials is to establish a
clear set of quality assurance standards, which are continually checked by a reliable third-party.
Other ways Einsteins could implement CSR practices in this part of their value chain would be
to be transparent with customers about the quality of their product, which also holds the
company to a higher standard.

In the area of operations, outbound logistics, and marketing and sales, which are supported by
technology, human resources, and general administration, Einsteins could encourage customers
dining in their restaurants to recycle coffee cups, use marketing tools to promote individual
environmental responsibility to both employees and customers, and train employees to conserve
and reutilize resources where possible. Another way in which Einsteins could serve their
customers in the local community would be to partner with a neighboring organization, dedicated
to meeting the needs of citizens in Tyler, Texas.

Antunes (September 2, 2016). Antunes Partners with Einstein Bros. Bagels. Retrieved from:
Einstein Bros. Bagels (n.d.). Training and Development. Retrieved from:
Sosland, Max (September 8, 2014). Einstein Noah Introduces New President and CEO. Retrieved from:
3) In order to determine whether Einstein Bros. Bagels in Tyler, TX has adequate resources to
achieve a more socially responsible model, one must first assess the resources themselves. To do
so, an (RBV) or resource-based view could be conducted. The resource-based view (RBV) is a
great tool in developing strategies for businesses by revealing how core competencies embedded
in a firm can help it exploit new products and market opportunities. It goes beyond the
aforementioned S.W.O.T or Porters analysis by integrating internal and external perspectives.
Einstein Bros. Bagels has several internal strengths and opportunities that can be leveraged or
acted upon in order to achieve a more socially responsible model. These include its value chain,
affordable pricing, and local brand recognition. The figure below will depict Einsteins resources
which include assets, capabilities, organizational processes, information, and knowledge that
enable the firm to create and drive value-creating strategies.

Resource-Based View: VRCN Analysis

Core Competencies Valuabl Rare Costly to Non-substit Competitive

e Imitate utable Consequences

Product variety & Yes Yes Yes No T.C.A.


Menu Recipes Yes Yes Yes Yes S.C.A.

Value Chain Yes No Yes Yes/No T.C.A.

(8k Franchises)

Convenience & Yes Yes No No T.C.A.

Strategic Location

Human Capital Yes Yes Yes Yes/No S.C.A.

Affordable Prices Yes No No No C.P.

Local Brand Yes Yes Yes Yes S.C.A.


The acronyms under the competitive consequences column in the table above are as follows.
Competitive Parity (CP), Temporary Competitive Advantage (TCA), and Sustainable
Competitive Advantage (SCA). According to the figure above, Einsteins has a few sustainable
competitive advantages. These include menu recipes, a strong value chain, and local brand
recognition in Tyler, TX. Einstein Bros. Bagels is focusing on a CSR strategy thus the firm must
focus on core competencies that are conducive towards that particular initiative. Based on the
(RBV) one can conclude that there are more temporary competitive advantages than there are
sustainable ones. For this reason Einstein Bros. should leverage the sustainable competitive
advantages and exploit opportunities found in some of the (TCA).

For instance, in regards to local brand recognition, Einsteins could use its presence in the
local community as a way to drive this CSR initiative. It could partner with organizations here in
Tyler, TX, such as the Boys and Girls Club or the East Texas Food Bank. There are several
avenues that Einsteins could partner with these organizations anything from awareness in
health, to fund raising, or simply lending a hand to those in the community by giving away
excess supplies to the East Texas Food Bank.

Another competency that could be acted upon would be the convenience and strategic location.
Einsteins should leverage its location on campus at the University of Texas at Tyler by reaching
out to its primary consumersstudents. By reaching them directly, the transition into becoming
more socially responsible would be far more visible and readily acknowledged. Several
opportunities are present in this particular location that could then be passed on over to
Einsteins other location in Tyler. Einstein Bros. Bagel has several resources that enable the
company to pursue a more socially responsible model in the rose cityTyler, Texas.

4) To decide whether or not the benefits of increasing CSR initiatives within the Tyler, Texas
region would outweigh the costs of doing so depend greatly on how those benefits and costs
affect forces on the market. If these implemented CSR initiatives affect forces in a positive why
they may be reinforced by heavier acts of CSR in the region. This can be concluded by
comparing changes in each of the Porter's Five Forces to deduce the overall change in the
regional market. First, we will look at the current market impact without CSR and follow with
market shifts with CSR implementations.

Porter's Five Definition6 Current Market without CSR Obtainable Market with CSR
Forces Model

Bargaining The ability of The number of suppliers without CSR will Depending on what brand of CSR is
Power of suppliers to stay constant and unaffected. implemented, the company may see a
Suppliers increase the costs decline in suppliers if a stricter selection
of inputs is introduced due to new CSR standards

Mind Tools Editorial Team (n.d.). Porters Five Forces Assessing the Balance of Power in a Business
Situation. Retrieved from:
thus increasing supplier bargaining power.

Threat of New The ability of new Threat of new entrants is higher without With CSR introduced to the market, it
Entrants competitors CSR because the emotional switching will increase emotional switching costs
entering the market costs are lower. for customers and reduce the threat of
new entrants taking market share.

Bargaining The ability of Millennial customers rely on CSR to make With CSR in the region, millennial
Power of customers to drive purchasing decisions, without CSR the customers would have higher emotional
Buyers down prices power of buyers to drive down prices will switching costs by associating purchases
increase due to the low emotional with a company as supporting their CSR
switching costs between competitors. agendas, this will lower the buyer power
Without CSR the only advantage over by sustaining higher prices of products
rivals is lower prices. 7 and services.

Threat of The ability to A business can be easily substituted With CSR in the Tyler region, the threat
Substitutes switch between without CSR agendas by those who have of substitutes will be lower because of
products and already implemented them in regions of increasing emotional switching costs for
services of customer acquisition strategies. The lower customers.
competitors CSR a company has the higher threat of

Industry The ability of Without CSR implemented in the region, Will help decrease the rivalry and
Rivalry competitors to the ability to compete in today's market is competition due to heavier CSR agendas
compete utterly decreasing, due to the millennial which will sway millennial customers and
purchasing power with CSR agendas. CSR conscious customers to whomever
offers the most social responsibility.

In conclusion over the Porter's Five Forces Model we can note that the only aspect that would
have a negative impact of CSR implementation in Tyler is the Bargaining Power of Suppliers.
When Starbucks, a leader in the industry, took upon a new agenda of CSR for suppliers to have
stricter guidelines of what is humane and socially acceptable in growing coffee beans, this has
stunted the growth of its suppliers and inadvertently shifted the power over to their suppliers,
since now there are only so few8. If Einstein Bros. Bagels implemented something of similar
characteristics it may have the same impact on their suppliers. If so, it would be the only
negative force out of the total five, meaning that overall the implementation of CSR in the Tyler,
Texas region has an outweighing benefit over cost. Why Einstein should implement CSR in the
region is because of the company's recent location into the University of Texas at Tyler, along
with Starbucks, they are directly competing with a leader in the industry within the same college
campus. To help distinguish their product, and to reach out to millennials, they need to
implement CSR within the college campus region to directly influence and impact its customers.
Since it has been stated that the millennial customers of this era seek directly for CSR within a

Chong, Kelsey (January 20, 2017). Millennials and the Rising Demand for Corporate Social
Responsibility. Retrieved from:
Starbucks (n.d.). Ethical Sourcing: Coffee. Retrieved from:
company before purchase, it is in Einstein's best interest to incorporate CSR within the Tyler

5.) To determine if Einstein Bros. Bagels would be able to service the community needs of Tyler,
we must establish what these needs actually are. Doing some research I discovered that the crime
index in Tyler is significantly higher than the U.S. average. In 2015 Tylers crime index score
was 311 compared to the U.S. average of 233. [i]Although this is a major issue, it would be very
difficult for a business like Einstein Bros. Bagels to have a direct impact on this problem.

Many studies have been done to try to pinpoint the causes of crime. Almost all of them had
poverty as one of the main causes. I found that Tylers poverty level is higher than the Texas
average. Tyler Residents with an income below poverty level in 2015 was 26.9% and Texass
was 21.1%. [ii]Now this is a need in the community that Einstein Bros. Bagels could make an
impact in. There are many ways they could establish CSR to help this cause. They could simply
find a charity organization that deals with this issue and donate to them or they could actually
donate food to an institution that feeds the hungry.

[i] Tyler, Texas. (n.d.). Retrieved March 20, 2017, from

[ii] Tyler, Texas (TX) Poverty Rate DataInformation about poor and low income residents. (n.d.).
Retrieved March 20, 2017, from

6) It would not harm Einstein's business model to add in a few different practices that make them
more socially responsible. Given that they are a food based company there is known waste that
occurs. Repurposing this waste or left over product to the homeless or hungry in each community
would be a great start. It would not cost them any extra in a financial perspective. The only area
an issue may arise is in health. There are very strong restrictions on leftover products donations
to the community that revolve around things like, timeliness, quality of product, recipients of
product and so on. There best option would most likely be to donate it directly to a nonprofit
organization to then distribute the food. The bottom line is, there are things that Einstein's Bros.
can do to make them a more socially responsible corporation without having a significant
financial impact on the company itself.