Panera Bread Company

What We Will Discuss
Who is Panera Bread ?
In order to understand how Panera Bread pursues this growth we will answer the following questions:
SWOT Analysis For Panera
SWOT Analysis Continued
Differences Between Panera Bread and Atlanta Bread in Ownership
Through the use of various analytical questions, methods and

financial analysis tools this presentation will demonstration how

Panera Bread Pursues Economic Growth in a Weak Economy.

Panera Bread was founded in 1981 as Au Bon Pain Co., Inc by Ron Shaich & Louis Kane.

1993 Panera Bread bought Saint Louis Bread Company which was a chain of 20 bakeries.

In 1999 Au Bon Pain Co., Inc was renamed to Panera Bread.



1.) What is Panera Bread’s Strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Panera Bread is taking? What type of competitive advantage is Panera Bread trying to achieve?


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?

3.)What are the Primary components of Panera Bread’s Value Chain?



Franchise ownership of Atlanta Bread Requirements:

net worth of $1 million,
$400,000 in liquid assets
RELEVANT
restaurant experience
Threats:

Rivals begin to imitate menu offerings/or dining ambiance
Strengths:
Attractive & appealing menu
Nationwide leader in the bakery-café segment
Bread-baking expertise (a core competence) – artisan breads are Panera’s signature product.

Opportunities:
International expansion
Open more outlets – untapped growth potential in a number of suburban markets
What does the data in Exhibit 2 reveal
about Panera Bread's Operating
Performance?
A Company that is Expanding Rapidly
Strong CAGR in a number of important areas – total revenues, royalties, fresh dough sales, net income and EPS.

Declines in G & A expense

Some erosion in operating profit margins bears watching (not a desirable trend).


Based on the information in case Exhibit 3, which fast-casual and full-service restaurant chains appear to be Panera’s closest rivals?
Panera has more than one major
competitor. Based on specific segments starting within the "third phase" segment, a location other than home where you can relax, work, meet and chat. In the dinner segment, Applebee's has a strong presence, and in the bakery segment, Au Bon Pain represents a serious competitor.Fortunately, Panera is one of the younger companies in the industry, which means there is room for growth and it’s still abundant. It differentiates itself from the common fast food chain by offering a bakery and deli style sandwiches. It has found a distinctive part in the restaurant industry enabling it to market to a growing costumer pool that wants better quality food.
5)Based on the information in Case Exhibit 3, which fast-casual and full service restaurant chains appear to be Panera's closest rivals?
Competition
"Third Place” segment

Panera has huge competitors such as, Einstein, Starbucks, Atlanta Bread Co and Panera's Menus are quite similar.

Starbucks which has more than ten times more locations and around eight times more revenue.

Panera
Franchise ownership of Panera Bread requirements:

Net worth of $7.5 million
Liquid assets of $3 million
experience as a multi-unit restaurant operator
recognition as a
TOP
restaurant operator.





Weaknesses

A less well-known brand name than some rivals
Sales at franchised stores higher than company-owned stores
3. What are the Primary components of Panera Bread's Value Chain?
Panera Bread’s goal is to provide

quality and great tasting bread to all of

their customers. In order to achieve

this task, Panera Bread Will need a an

effective value chain. Panerea bread

creates this value chain through five

primary activities .
In order to understand how Panera Bread pursues this growth we will answer the following questions:
4.)What does the data in case Exhibit 2 reveal about Panera Bread’s operating performance?

5.)Based on the information in case Exhbit 3, which fast – causal and full service restaurant chains appear to be Panera’s closet rivals?

6.)What strategic issues and problems does Panera Bread management need to address?

7.)What does Panera Bread need to do to strengthen its competitive position and business prospects vis-à-vis other restaurant rival chain?






Declines in liquidity (as measured by current ratio and working capital numbers) and a fluctuating but still acceptable ROE also warrant attention.

Year over year, Panera Bread Company has been able to grow revenues from $2.1B USD to $2.4B USD.

The company has been able to reduce the percentage of sales devoted to selling, general and administrative costs from 5.93% to 5.50%.
These five Primary Components include:

Marketing

Franchise Operations

Site Selection and Café Environment

Bakery Café Operations

Panera Bakery Supply Chain

Marketing
Panera Bread Company does not utilize brute force marketing strategies.

Panera Bread Company relies heavily on Customer Satisfaction.

Panera Bread company tries to enhance quality awarness
Debt to Equity Ratio
Panera Bread relies on their rigid

Franchise Operations to create

superior customer value. Panera Bread

provides support in to their Franchises

in the following areas :

Franchise Operations


Site Selection
Marketing
Training
Education
Design
Bakery Café Certifications

Franchise Operations
Panera Bread Company also has rigid requirements, which are needed to open a Franchise.

Experience as Multi Unit Restaurant Operator

Recognitions as a Top Restaurant Operator

Net Worth of $7.5 Million

Liquid Assets of $3Million


To help facilitate their efforts in marketing Panera Bread Plans to:

Launch New Ad Campaigns to Broader Audience

Increase Advertising Expenditure

Continue efforts to gain various media attention

Dinner segment

Applebee's has a strong position; it has the double of locations and a weak presence abroad. Its revenues are a 70% higher than Panera’s and also it has a good reputation

Specific bakery segment

Au Bon Pain represents a serious competitor; with the 40% of location in USA and abroad more than Panera, also has attained about 40% in revenues as Panera.

Adequate resources to match Panera Bread’s Development Schedule.

Real Estate Experience

Comfort, family customers and customer acceptance segment

Cracker Barrel represents a risk; the business development is different for a fair comparison,
Others

Many other chains could represent a by-side competitor, but not with an important overlap.
6)What strategic issues and problems does Panera Bread management need to address?
Panera Bread needs to do more media advertising.

Need to address whether to expand their product line.

The taste of consumers evolves over the time due to many considerations

Need to address whether to correct the company's deficiencies by acquiring a rival company with the missing strengths.


Franchise Operations
Site Selection and Café Environment
Panera Bread uses Site Selection and

Café Environment to create superior

Customer Value and strengthen its

Value Chain. Panera Bread takes great

precaution when choosing the

locations of their Cafés.


Panera Bread Company
Panera Bread collects a series of

demographics and information in the

evaluation process on potential

locations. Panera Bread seeks to

provide a distinctive and engaging

environment within their Bakery-

Cafes.
Bakery Café Operations
Panera Bread relies on high quality restaurant

management and operating excellence to create

superior customer value. Panera Bread personnel are

skilled, energized and motivated. There main objective

is create and sustain profitable relationships between

the organization and customers.
There main objective is create and

sustain profitable relationships

between the organization and

customers. They ensure that managers

are provided with detailed manuals

and hands on training. Managers are a

well paid and highly satisfied with their

jobs.
Panera Bakery Company Supply Chain
Panera bread relies on a excellent supply chain

to provide customer value within their value

chain.
Panera operates a network of 24 facilities

200 temperature-controlled trucks

Ingredients for it dough’s and other products
What does Panera Bread need to do to

strength its competitive position and business

prospects vis-a-vis other restaurant rival

chains?
In order for Panera to strength its competitive

position and business prospects vis-à-vis with other

restaurants rivals they must revaluate their broad

differential strategy.
Panera can achieve a better position by doing the following:
Create new products, new menus and new meals or a new design.

Improve customer services or adding additional services or new meal times.

Strive for innovation and technology advances in all stages of the value chain.

Pursuing continuous quality improvement in regards to ingredients and other input factors.

Increase emphasis on marketing and brand building activities.

Develop, train and higher new staff.

What is Panera Bread’s Strategy? Which of the five

generic competitive strategies discussed in Chapter 5

most closely fit the competitive approach that Panera

Bread is taking? What type of competitive advantage is

Panera Bread trying to achieve?
Panera Bread utilizes a Broad Differentiation Strategy.

Panera Bread strives to offer unique product attributes

that a wide range of buyers find appealing.
Through a Broad Differentiation Strategy Panera

Bread Company seeks to create higher

quality products and services as their competitive

advantage.


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?