Download Panadera Company

Panera Bread Company Case Analysis
Panera Bread Company’s Growth Strategy
Case Analysis
Among the crowded field of casual, quick-service restaurants in America, the distinctive blend of
genuine artisan bread and a warm, comfortable atmosphere has given Panera Bread Company a golden
opportunity to capture market share and reward shareholders through well-planned growth. With the
objective of opening approximately 1,000 more bakery-cafes in the next three years, Panera Bread
Company must make prudent strategy decisions about new store locations, supply-chain management and
expanded offerings, all the while continuing its above-average earnings per share growth of at least 25
percent per year.
With 170 stores in the development pipeline in 2007 and several hundred more to reach its goal,
Panera Bread Company faces a task many companies have failed at time and time again, resulting in
massive debt, contraction and contributing to the flame-out of a once promising brand and stock
investment. The decisions surrounding how to expand should be based on analysis and evaluation of the
successful operations and financial performance thus far. Specifically, the plausible proposition of
growing franchisee-owned stores in contrast to company-owned stores is a driver and key success factor
for Panera Bread Company. We discuss these trends and recommend expansion at a sensible pace by
encouraging franchisee stores in untapped markets, and continuing the success of product offerings and
the focus on quality control through wise supply-chain management.
This company thrives on first-time customers and word of mouth to continue its growth. “The
company’s marketing research indicated that 57 percent of consumers who have “ever tried” dining at
Panera Bread had been customers in the past 30 days” (C-169). Panera Bread has accomplished a
distinctive position in the restaurant industry, making it possible to market to a growing customer pool
that desire better quality foods. The growth.
-----------Panera Bread Company
Panera Bread: A Case Study Misti Walker
Panera Bread: A Case Study 1
Strategy
Panera Bread’s strategy is “to provide a premium specialty bakery and café experience to urban workers
and suburban dwellers.” This strategy is most closely aligned with a broad differentiation strategy, or
being unique in ways that a broad range of consumers find appealing. Prior to taking the Panera concept
nationwide, the owners performed cross-country market research and concluded that consumers could get
excited about a quick, high quality dining experience. The concept is a mix between fast food and casual
dining, or fast casual. By choosing this strategy, Panera is attempting to achieve competitive advantage in
the unique offerings it provides, offerings that rivals don’t have and can’t afford to match. In this case,
delicious handcrafted bread arriving fresh daily, served in an inviting atmosphere is the company’s
competitive advantage and core competency.
SWOT Analysis
Strengths - Repeat customers, learning curve, word-of-mouth, fresh, quality food, rapid market
penetration, economies of scale, customer service, good atmosphere Weaknesses - leased land, off-site
dough preparation and delivery, many untapped markets, no sustainable competitive advantage, unclear
strategic direction, unfavorable financial trends Opportunities – catering, national focus on health, dinner
crowd, global sales Threats – bad economy, high gas prices, highly competitive industry
Financials
Net profit margin Return on stockholder’s equity Debt to Equity Ratio Current Ratio 2006 .071 14.8%
.365 1.16 2005 .081 16.5% .381 1.18 2004 .081 15.9% .345 1.05 2003 .084 15.8% .239 1.58 2002 .076
14% .215 1.83
Return on Sales (by business segment) 2006 Company stores 18.5% 2005 19.6% 2004 19.8% 2003 20.7%
2
Franchises Dough Combined
88.0% 9.9% 23.3%
87.7% 9.0% 24.5%
88.0% 6.7% 24.6%
88.7% 7.0% 25.8%
The franchise business segment is showing above average returns on sales. This is...
-----Panera Bread Company Case
1)Ans:
• Purpose: They are bakers of bread. Their main purpose is to produce and serve fresh breads daily.
• Mission: A loaf of bread in every mouth. (ref: www.panerabread.com)
• Strategy: Panera believes that key to leading an organization is to understand the long term trends at
play and getting the organization ready to respond to it. So far, selling high-quality, high-priced fast food
has worked just fine for Panera. They have an aggressive growth strategy to open as many stores as
possible each year.
2)Ans:
Ron Shaich has created values among the customers by satisfying their needs and demands. He has
changed the trends by giving new features. For example, first of all, each location features an earth-toned
décor with fireplace, comfortable couches, and current newspapers. Secondly, the menu features a wide
variety of made-to-order sandwiches prepared with freshly baked artisan breads, desserts, crisp salads,
homemade soup, and gourmet beverages. Thirdly, unlike other restaurants here food is served in baskets
or in china plates and cups, and customers eat with metal silverware. Last of all, more than Panera’s 700
stores offer Wi-Fi facility to their customers. Because of these innovative adoption, Panera has achieved
a tremendous growth rate which indicates, Ron Shaich has utilized the open market system model
perfectly.
3)Ans:
To meet their aggressive growth strategy Panera had to expand its market by opening many stores each
year. Although they needed a lot of franchise, they maintained a
---Panera Bread
Overview
Panera Bread is ready for an epochal change in American eating habits. The company is a leader in the
quick-casual restaurant business with more than 1,027 bakery-cafes in 36 states. Its locations, which
operate under the Panera and Saint Louis Bread Company banners, offer made-to-order sandwiches built
using a variety of artisan breads, including Asiago cheese bread, focaccia, and its classic sourdough
bread. Its menu also features soups, salads, and gourmet coffees. In addition, Panera sells its bread,
bagels, and pastries to go. Almost 400 of its locations are company-operated, while the rest are run by
franchisees. Panera Bread's is trying to provide premium specialty bakery and café experience to urban
workers and suburban dwellers. They want to make the experience of dining at Panera so attractive that
customers would be willing to pass by the outlets of other fast-casual restaurants competitors to dine at a
near-by Panera Bread. They have strong competition through-out the whole fast-food/restaurant
business. Two main competitors that they have are Starbucks and Einstein Bagels. They are a proven
company that is always looking for ways to move forward, and advance their business.
1. What is Panera Bread's strategy? What type of competitive advantage is Panera Bread trying to
achieve?
Panera Bread's strategy is to provide premium specialty bakery and café experience to urban workers and
suburban dwellers. Panera is trying to be "better than the guys across the street." They are trying to
make the experience of dining at Panera so attractive that customers would be willing to pass by the
outlets of other fast-casual restaurants competitors to dine at a near-by Panera Bread.
2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation?
Does the company have any core competencies or distinctive competencies?
Panera's Resource Strengths and Competitive Assets:
• Leading bakery-café...
-------Panera Bread Strategy
Running head: PANERA BREAD CASE
Title: Panera Bread Strategy
Ron Johnson
March 1, 2009
Southwestern College Professional Studies
Abstract
This case study is about Panera Bread Company and its strategy it wishes to employ to become the best
brand name of fresh bread in the United States. Panera Bread’s use of a broad differentiation strategy has
helped their profitability and growth and rivals have found it hard to compete with the competitiveness of
Panera Bread. A SWOT analysis will reveal the competitive advantage Panera Bread has and why this
company is in an attractive situation and what Panera Bread must do to strengthen its competitive
advantage against rival chains.
Panera Bread Strategy
Neighborhoods and cities all around the country are enjoying a tradition of freshly baked artisan breads
from Panera Bread bakery-cafes. A driving force behind Panera Bread was to create “a premium specialty
bakery and café experience to urban workers and suburban dwellers” (Thompson, Strickland, & Gamble,
2008, pC-87). Heading into 2007, Panera Bread Company’s market presence was expanding rather
swiftly. “Between January 1999 and December 2006, close to 850 additional Panera Bread backery-cafés
were opened, some company owned and some franchised. Panera Bread reported sales of $829 million
and a net income of $58.8 million in 2006. Sales at franchised-operated Panera Bread bakery cafés totaled
$1.2 billion in 2006” (Thompson, Strickland, & Gamble, 2008, pC-87). Panera Bread’s strategy was and
still is to make great bread and to make it broadly available. Part of that strategy is to make there cafés a
home away from home, where people are comfortable and relaxed. What competitive strategy did Panera
Bread use to grow its business?
There are a number of ways that companies employ competitive strategies and that can depend on a
number of things. Panera Bread’s competitive strategy approach is geared more to a broad differentiation
strategy, where the...
-------------------Panera Bread Case Study
In 1993, AU Bon Pain Company purchased the Saint Louis Bread Company. In 1995, top management at
Au Bon Pain instituted a comprehensive overhaul of the newly-acquired Saint Louis Bread locations. The
overhaul included altering the menu and the dining atmosphere. The vision was to create a specialty cafe
anchored by an authentic, fresh-dough artisan bakery and upscale quick-service menu selections. This
acquisition proved successful for Au Bon Pain. Between 1993 and 1997, average unit volumes at the
revamped locations increased by 75% and over 100 additional locations were opened. In 1997, the
bakery-cafes were renamed Panera bread in markets outside of St Louis. The Panera business plan had
worked well and management concluded it had broad market appeal and could be rolled out nationwide.
The management team quickly realized the potential of Panera Bread to flourish into one of the leading
fast-casual restaurant chains in the nation. With this realization came the need for a more focused
management team and greater financial resources. It was not in their best interest to continue with both
Au Bon Pain and Panera Bread. In 1998, they went exclusively with Panera Bread and sold their Au Bon
Pain bakery-cafe division. After the sales transaction to ABP Corporation was complete, the new Panera
Bread Company was restructured and had 180 St Louis Bread and Panera Bread bakery-cafes and a debtfree balance sheet.
Over the next 8 years a combination of company owned and franchised bakery-cafes opened, for a total of
850 additional locations. Exhibit 1 shows their success between 2002 and 2006. Their financial stats
remained strong, with a continuous increase in revenue and net income. Panera's strategic intent was to
make great bread broadly available to consumers across the United States. They have plans to open 170180 cafe locations in 2007 and to have nearly 2,000 Panera Bread bakery-cafes open by the end of 2010.
Management was confident that their attractive...
------------------Panera Bread
Introduction
If you analyzed the restaurant industry using Porter's five forces model, you wouldn't be favorably
impressed. Three of the threats to profitability•the threat of substitutes, the threat of new entrants, and
rivalry among existing firms•are high. Despite these threats to industry profitability, one restaurant
chain is moving forward in a very positive direction. St. Louis•based Panera Bread Company, a chain
of specialty bakery-cafés, has grown from 602 company owned and franchised units in 2003 to over 877
today. In 2005 alone, its sales increased by 33.6% and its net income increased by 35.2%. So what's
Panera's secret? How is it that this company flourishes while its industry as a whole is experiencing
difficulty? As we'll see, Panera Bread's success can be explained in two words: positioning and execution.
Changing Consumer Tastes
Panera's roots go back to 1981, when it was founded under the name of Au Bon Pain Co. and consisted of
three Au Bon Pain bakery-cafés and one cookie store. The company
grew slowly until the mid-1990s, when it acquired Saint Louis Bread Company, a chain of 20 bakerycafes located in the St. Louis area. About that time, the owners of the newly combined companies
observed that people were increasingly looking for products that were "special"•that were a departure
from run-of-the-mill restaurant food. Second, they noted that although consumers were tiring of standard
fast-food fare, they didn't want to give up the convenience of quick service. This trend led the company to
conclude that consumers wanted the convenience of fast food combined with a higher-quality experience.
In slightly different words, they wanted good food served quickly in an enjoyable environment.
The Emergence of Fast Casual
As the result of these changing consumer tastes, a new category in the restaurant industry, called "fastcasual," emerged. This category provided consumers the alternative they wanted by capturing the
advantage of...
-------Panera Bread
Panera Bread Company
0. INTRODUCTION
The Panera Bread legacy began in 1981 as Au Bon Pain Co., Inc. Founded by Louis Kane and Ron
Shaich, the company prospered along the east coast of the United States and internationally throughout
the 1980s and 1990s and became the dominant operator within the bakery-cafe category. In 1993, Au Bon
Pain Co., Inc. purchased Saint Louis Bread Company, a chain of 20 bakery-cafes located in the St. Louis
area. The company then managed a comprehensive re-staging of Saint Louis Bread Co. Between 1993
and 1997 average unit volumes increased by 75%. Ultimately the concept's name was changed to Panera
Bread.
Panera Bread has been recognized as one of Business Week's "100 Hot Growth Companies."As reported
by the Wall St. Journal's Shareholder Scorecard in 2006, Panera Bread was recognized as the top
performer in restaurant category for one-, five- and ten-year returns to shareholders. Today, there are
more than 1160 Panera Bread bakery-cafés in 40 states delivering fresh, authentic artisan bread on a
national scale.
1. STRATEGIC CHALLENGE
Panera Bread’s major problem is its development in North America and the disparity of its
implementation in general. The company has many cafés all around the United States, in major cities such
as St Louis, Los Angeles, Philadelphia, Dallas… but big cities such as New York city, Phoenix, San
Antonio, New Orleans,… do not have any Panera Bread Cafés.
The strategic challenge for Panera Bread is to develop the implementation of the company all around
North America before going to the international market. With its own characteristics and a good
development, Panera Bread will be a major actor on the bakery-café market and will compete with big
companies such as Starbucks or Subway.
2.COMPETITION ANALYSIS
Core Competence
-The company’s fresh-dough-making capability for fresh baked and quality goods served in a comfortable
environment.
SWOT
Strengths:
-Panera Bread is...
-------------------------Business Strategy Panera Bread
Business Stratgery / Case: Panera Bread Company / Igor Maas / 02.15.2008
The main challenge is to determine how Panera Bread can continue to achieve high growth rates in the
future. Panera Bread is operating in an extremely high competitive restaurant market which forces the
company to improve and to grow steadily for staying profitable. The company’s mission statement of
putting “a loaf of bread in every arm” is just underlying Panera’s commitment for growing. They are
now in a good financial situation and facing growth rates of up to 20% per year in a niche market that has
a great growth potential. In the next 7 years the fast-casual market is expected to grow by 500% in sales
to a total of $30 billion.
Therefore I think that there are 3 alternatives which can be considered for the future. The first idea that
came to my mind is to sell Panera or going join venture with one of the big players in the restaurant
industry. Panera has an impressively high market value which is indicated by the goodwill estimation on
the balance sheet. By getting together with a major franchising company like McDonalds or Burger
King, Panera’s expansion could be supported with a much greater amount of money. The backside of
this deal would be that Panera’s executives would lose their controlling power over the company’s
operations and would allow the joined company to misuse Panera for own interests and goals.
Considering these issues by getting together with another company opens up questions of the necessity of
a joint venture which led me to the second alternative. The company should keep up with their strategy
of a steady growth model and the production of high quality products. Panera was doing really good in
the last couple of years and the fast casual market has a great undeveloped potential for the future.
Nevertheless, Panera has to be aware of major franchisers competitors who have the power and
willingness to compete with Panera for customers, market share and...
----------------------------Panera Bread Quality Improvement
Operations Management
Quality Improvement
Introduction
Following your advice at class, I decided to choose a different organization that I work for. I did this
primarily for two reasons: to learn about the mission statement and operations strategy of another
company and to apply the quality improvement concepts to a completely new operation’s environment.
I chose The Panera Bread Company (NASDAQ: PNRA). That is the place I have been studying for the
last year where I could observe how they operate. During this time, I have seen several areas that could be
improved. For this assignment I chose one in particular that has a strategic importance according to the
company’s mission statement.
As a note, I utilized the company’s 10K for the mission statement and operations strategy research.
Mission Statement
Our MISSION is to provide high quality products and exceptional service to our customers.
”A loaf of bread in every arm®”.
Operations Strategy
To achieve their mission and competitive advantage, Panera Bread will conduct their business by
reaffirming their commitment daily to the following strategic concepts:
|
|Diff|Resp|Service: always exceed the customers' expectations
|
|
|eren|onse|
|
|tiat|
|
|ion |
|
|
|
|Neighborhood: maintain the position as THE friendly and quick neighborhood bakery in the
|
|
|
markets.
|
|
|
|
|
|
|Community: engage in a working partnership with civic and charitable activities....
---------------------------Panera Bread Case Study
Panera Bread is a company of small beginnings, starting out as a chain of small scale bakery-cafes along
the east coast to having over 1,200 locations in over 40 states. Panera is a company that strives to project
an inviting atmosphere in all of its establishments. Panera’s stores are mostly located in suburban areas
with heir target customers being urban workers and suburban dwellers.
“A loaf of bread in every arm” is the mission statement of Panera Bread. Panera Bread bakes more
bread each day than any bakery-cafe in the country. Panera’s menu spans from muffins and bagels to
soups and salads to a variety of sandwiches. Panera Bread prides itself on providing the highest quality of
food that customer enjoy.
Panera’s competitors include restaurants in the fast-casual restaurant market such as Applebee’s, Baja
Fresh and Fuddruckers. Panera Bread also has to compete with common fast food restaurants such as
McDonald’s and Wendy’s. Although, competition is fierce in these markets, Panera has been able to
differentiate itself from other competitors.
One of the main problems that Panera Bread is facing is their pricing strategy. With the state of the
economy today, it definitely affects the consumer’s ability to eat at places like Panera Bread, especially
when there are less expensive options available. These competitors, most of which are in the fast food
industry, offer less expensive food items, although they may be of a lesser quality, they still pose a major
threat.
Fast food restaurants such as McDonalds may operate differently, however they have a strong presence
in suburban areas, which is where Panera is primarily located. There is approximately one Panera
location for every ten McDonald’s. Also, full service restaurants such as Applebee‘s, are beginning to
offer lower priced menu options. For example, Applebee’s recently began offering 2 for $20 deals where
customers can get an appetizer and two entrees for $20....
--------------------------------------Panera Bread Swot
SWOT
Strengths
Steady Fast growth: Panera is one of the fastest growing chains with sales over $200 million in 2001.
According to exhibit 2 (Dess pg. 667) Panera Bread in 2002 ranked with the highest three-year sales
growth rates as of June 2004. Panera Bread has about 1,027 baker-cafes in the United States, and is
widely recognized for driving the nationwide trend for specialty breads. This is very impressive for this
type of fast-casual food industry.
Part of exciting market segment: The new fast-casual market segment is developing quite rapidly and
these restaurants are becoming key players in the industry. This market is a combination of the quick
service of traditional fast-food restaurants with the higher quality food products found in sit-down
restaurants. It?s a $6 billion industry growing at 15 to 20 percent each year. (Dess)
International Growth: By the en of 1997, the company had 96 bakery-cafes outside the United States, in
Chile, the Philippines, Indonesia, Thailand, Brazil, and the United Kingdom. This is particularly
important since international sales for the Top 100 chain restaurants are still at an increasing rate.
Quality Ingredients: Panera only uses the highest-quality ingredients, with only fresh dough and
preservatives and the bread is baked fresh everyday. Panera Bread has a strong presence in the bakerycafe segment. They have high quality food, including the award winning sourdough bread.
Meeting Customer Demands: In there attempts to take substantial steps in meeting growing customer
demands, they have equipped their restaurants with free wireless internet. By offering this amenity they
can fully meet the needs of sophisticated and diverse customer base. Panera Bread has strong customer
loyalty; they have a strong appeal to customers. They also have a wide variety of food which appeals to
a large group of people.
Commitment to the community: The Company established Operation Dough-Nation, a program that
allows...
------------------------------Case Analysis Panera Bread
Panera Bread's sales growth rate for 2003 was 28.1% and 38.1% in 2002; therefore the sales growth rate
for the company is increasing at a decreasing rate. The decreasing rate of sales growth may be attributed
to the company's current marketing strategy. The company's ad-to-sale ratio was only 2.1% compared to
the category average of 4% Also; Panera Bread does not have a lot sufficient of bargaining power with its
suppliers, which may affect its net income.
A loaf of bread in every arm is the current mission statement for Panera Bread, which is a narrow
statement and limits the scope of the company's activities in terms of products and services. Considering
the company is in the casual dining industry, the mission statement is irrelevant and inappropriate.
Revenues increased from $350.8 million in 2000 too $977.1 million in 2003 along with ROS, ROI, and
ROE (see appendix 1); therefore leading to the conclusion Panera Bread has a quality top management
team. Also, the company has a diversified Board of Directors with only one insider and five outsiders and
the Board of Directors appears too be active in the company.
Panera Bread has several external factors which may affect the company, such as climate, inflation rates,
unemployment level, and wage levels. Climate can have a dramatic effect on Panera Bread. If crops,
such as wheat, lettuce, and tomatoes are damaged due to severe weather the price of the crops will
increase. The increase in the price of crops will force Panera to either suffer the loss to net income or pass
the increased cost to consumers. An increase in inflation rates causes the general price level of products
and services to rise, therefore decreasing the purchasing power of the dollar
and forcing consumers to slow down their spending. If unemployment levels rise the labor force
decreases, which decreases the buying power of those consumers. Wage levels can also have either a
positive or negative impact on Panera Bread; if wage levels...
--------------------------------------------Financial Analysis Of Real & Virtual Companies
Financial Analysis of Virtual and Real Companies
ZeroMillion.com, 2006, states
The Current Ratio is one of the best known measures of financial strength. It is figured as shown below:
Current Ratio = Total Current Assets / Total Current Liabilities
A generally acceptable current ratio is 2 to 1. But whether or not a specific ratio is satisfactory depends on
the nature of the business and the characteristics of its current assets and liabilities. The minimum
acceptable current ratio is obviously 1:1, but that relationship is usually playing it too close for comfort
Huffman Trucking and J B Hunt have a current ratio of 1:1 while Knight Transportation has a current
ratio of 3.6:1. The current assets for Huffman Trucking and J B Hunt are almost the same as their current
liabilities. Knight Transportation has current assets of $96,070 and current liabilities of $26,154. Knight
should not experience any difficulty paying their obligations. Huffman Trucking and J B Hunt should
look at other methods to increase their current assets or decrease their current liabilities.
I was unable to calculate the current ratio for McBride Financial because they do not have a balance sheet
listed on their website. The current ratio for Countrywide Financial is 0.3:1; which is below the minimum
acceptable of 1:1. The current liabilities for Countrywide Financial almost four times their current assets;
they need to determine what is causing their short/current long-term debt and other current liabilities and
find a way to decrease them. As a lender, they should know the importance of a strong current ratio is
necessary when obtaining outside financing. The current ratio for Accredited Home Lenders is 0.5:1;
which is below the acceptable minimum. Accredited Home Lenders is purchasing almost of their assets
through debt instead of with equity, which is decreasing their current ratio.
The current ratio for Kudler Fine Foods is 17:1 and they should not have any difficulty paying...
--------------------------------------------Panera Bread Evaluation
Overview
The food business is a broad range of businesses. Food is a basic need of consumers like clothing, and
shelter. For a company to enter into the food business it has to assess the various segments of this
business. These ranges from production of food, processing, and marketing. The company prior to
entering a market in this line of business should assess its capabilities and compare these to the kind of
needs of the consumers – would the customer be a processor, or a consumer?Is the product that the
company can offer a raw material, processed food, or to serve a group of consumers who would like to eat
and yet also need some little pleasure and not merely to satisfy their hunger?
In the consumer segments of the market the company can classify these into consumers who eat at home,
consumers who eat in restaurants, or they merely eat out say for camping. If they eat in restaurants would
they prefer to eat in fastfoods because their concern is merely to eat something they don’t eat at home, or
do not want to spend so much time as eating? Or would they want to experience once in while in a sit
down restaurant where they eat, enjoy the view, or talk to friends while eating, or merely while away the
time?
Panera has assessed its capabilities and strengths and in the process has embarked to enter the food
market on a very narrow segment of the market in terms of the uniqueness of its product – to serve
customers who are looking for the fresh smell of home baked food, feel the joy of tasting fresh bread,
enjoy the ambience of the restaurant and the view, or also to be able to work on their laptops and connect
to the internet on a wifi. It has further narrowed its market segment by selling at a price that is above the
fastfood market and thereby identify itself as not being with the crowd or mass market, and yet offer
prices that is much lower than in a sit down, exclusive type of restaurants, or clubs.
It is this understanding the marketing concept of...
---------------------------Panera Bread Marketing Mix Proposal
Signature Frozen Yogurt
Table of Contents
Executive Summary
For the past 28 years we have been committed to offering a wide variety of healthy entrée options at the
highest quality for a reasonable price, however, we have never offered a selection of healthy option
desserts and therefore have decided to launch a new product, the Signature Frozen Yogurt.
This product is a secret blend of all-natural ingredients. One of the most important ingredients is real
nonfat milk, which has been certified by the National Yogurt Association to carry the Live and Active
Cultures. Regardless of the flavor, our crispy and tangy yogurt is designed to awaken the senses and blend
perfectly with each of our freshly cut fruit toppings. It is low in fat, contains no cholesterol, no
preservatives, is fortified with calcium, and is made of the highest ingredients. The competitive advantage
of this product is the place the product will be sold, at our already established cafés. The café already
draws in customers and now to complete their meal, instead of having to travel elsewhere for a healthy
option desert, they have it already where they are eating, which means no extra traveling costs, or
planning is required. The convenience factor is now added which is a very important in the American
lifestyle today.
Unlike the fast food competitors, our new dessert will keep us at the top of the fast-casual, bakery-café
industry by continuing to provide for the millions of Americans who are looking to eat healthy. While
competitors are struggling to keep up with today’s prominent healthy-eating trend, we remain a valuable
asset to the cause.
We will use mass marketing techniques in order to target our chosen market for the newly created
Signature Frozen Yogurt .The initial market will consist of New York and California, two places which
have seen a growing trend in the market for frozen dessert. The population will consist of individuals
roughly between 19-35 years of age,...
----------------------------------------Panera Bread
Panera Bread
Submitted by ButterCutie111 on February 27, 2008
Category: Business
Words: 1324 | Pages: 6
Views: 769
Popularity Rank: 7,696
Average Member Grade: N/A (Add a Comment / Grade this Paper)
Overview
Panera Bread is ready for an epochal change in American eating habits. The company is a leader in the
quick-casual restaurant business with more than 1,027 bakery-cafes in 36 states. Its locations, which
operate under the Panera and Saint Louis Bread Company banners, offer made-to-order sandwiches built
using a variety of artisan breads, including Asiago cheese bread, focaccia, and its classic sourdough
bread. Its menu also features soups, salads, and gourmet coffees. In addition, Panera sells its bread,
bagels, and pastries to go. Almost 400 of its locations are company-operated, while the rest are run by
franchisees. Panera Bread’s is trying to provide premium specialty bakery and café experience to urban
workers and suburban dwellers. They want to make the experience of dining at Panera so attractive that
customers would be willing to pass by the outlets of other fast-casual restaurants competitors to dine at a
near-by Panera Bread. They have strong competition through-out the whole fast-food/restaurant business.
Two main competitors that they have are Starbucks and Einstein Bagels. They are a proven company that
is always looking for ways to move forward, and advance their business.
1. What is Panera Bread’s strategy? What type of competitive advantage is Panera Bread trying to
achieve?
Panera Bread’s strategy is to provide premium specialty bakery and café experience to urban workers and
suburban dwellers. Panera is trying to be “better than the guys across the street.” They are trying to make
the experience of dining at Panera so attractive that customers would be willing to pass by the outlets of
other fast-casual restaurants competitors to dine at a near-by Panera Bread.
2. What does a SWOT analysis of Panera Bread reveal about...
-------------------Company Analysis: Panera Bread Company
Company Analysis
Panera Bread Company is a small cap stock that sells on the NASDAQ with the ticker symbol of PNRA.
Panera Bread Company operates in the retail bakery-café segment of the restaurant industry in the
services sector. Under the control of CEO Ronald Shaich, Panera Bread Company functions under the
names of Panera Bread Company and St. Louis Bread Company. Originally, Panera operated primarily
only on the east coast but has now opened up operations in 35 states. Panera’s stores are located mostly
in suburban areas near malls and other shopping centers. Panera Bread offers an assortment of breads,
deli sandwiches, salads, and pastries among other products. Panera competes in the restaurant industry
against such restaurants as McDonald’s and Wendy’s, but Panera’s differentiation from its competitors
comes from its café environment including a more up-scale and healthy menu (see menu).
Panera Bread Company began as Au Bon Pain Company in 1981 operating on the east coast. In 1993 Au
Bon Pain Company purchased St. Louis Bread Company, which was comprised of 20 bakery-cafes in the
St. Louis area. From the years 1993 to 1997, the bakery-cafe names changed to Panera Bread. In 1999,
Au Bon Pain Company sold all business units except for Panera and the company was renamed Panera
Bread Company. Since the companies restructuring Panera Bread Company has become one of Business
Week’s “100 Hot Growth Companies.”
Panera Bread Company has recognized large scale growth in recent quarters and is now on pace for large
growth rates in the future. Panera currently has 429 franchise operated stores and 173 company-owned
bakery-cafes. Panera’s ability to increase sales of franchises has enabled Panera to grow rapidly. Panera
does not sell single-unit franchises but rather sells franchise agreements of generally 15 stores in 6 years.
Panera has strict criteria that must be met to buy a franchise including a certain amount of capital that is
required....
-------------------------------------Strengths
An attractive and appealing menu (see case Exhibit 6)—Panera offers high quality food
at a good price (the company delivers good value for the money); moreover, it has menu
offerings for the more health/weight-conscious diner
Bread-baking expertise (definitely a core competence)—artisan breads are Panera’s
signature product
Panera Bread is the nationwide leader in the bakery-café segment
Panera Bread has high ratings in customer satisfaction studies
A good brand name that management is continuing to strengthen
The fresh dough operations and sales of fresh dough to franchised stores is a source of
revenue and profit (see case Exhibit 1 showing that fresh dough cost of sales to
franchisees run well below the revenues from fresh dough sales to franchisees)
Initial success in catering—extends the company’s market reach
Has attracted good franchisees—sales at franchised stores run a bit higher than those at
company-owned stores (see case Exhibit 2)
The financial strength to fund the company’s growth and expansion (see case Exhibit 1)
without burdening the company’s balance sheet unduly with debt
Weaknesses
A less well-known brand name than some rivals (Applebee’s, Starbucks)
Sales at franchised stores run a bit higher than those at company-owned stores—why is
this occurring? Are franchisees better operators?
Opportunities
Open more outlets, both company-owned and franchised—there is untapped growth
potential in a number of suburban markets as shown in case Exhibit 3
Open Panera Bread locations outside the U.S. as market opportunities in the U.S. begin to
dry up
Threats
Rivals begin to imitate some of Panera’s menu offerings and/or dining ambience, thus
stymieing to some extent Panera’s ability to clearly differentiate itself from rival chains
New rival restaurant chains grab the attention of consumers and draw some patrons away
from Panera—in other words, competition from other restaurant chains (either those in
the fast-casual segment or other restaurant categories) becomes more intense
Panera Bread begins to saturate the market with outlets, such that it becomes harder to
find attractive locations for new stores and the company’s growth slows