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Copy of Panera Bread Company

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tien tien heng

on 9 April 2013

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Transcript of Copy of Panera Bread Company

A master franchise agreement with Alsea gives any chain instant access to an entire market, allowing for easier, faster expansion

Example: Starbucks Coffee now has over 200 outlets in 23 Mexican cities after less than six years in Mexico, an average of more than 30 new stores annually Joint Venture with Alsea Cultural Environment Customer Loyalty Sourcing "Trusted" Ingredients Keeping with Panera standards and theme -Mexico is a top 20 producer of organic foods worldwide with 1.3 million acres of land dedicated to organic agriculture.

-Over the last decade, several efforts have been made by the Mexican government and private sector to promote organic farming.

-Organic production in Mexico is composed mainly of small and medium-sized family farms or cooperatives. Description of Organization Panera's
Product & Service Reasons for Going Abroad Political and legal strides made
Economics: Growing middle class & disposable income
Labor: low cost and availability
Trusted sources of ingredients available
Target market & favorable trends
"Distance Still Matters"
Easy Implementation & Adaptation CAGE Analysis Healthy food
Specialized food
US foods perceived as high quality
Local suppliers offering food & beverage to chains at competitive prices Physical Distance
Physical Size
Access to Ocean
Shared Border
Trading Bloc- NAFTA
Common Polity
*GDP per capita- $ 15,300
*Currency freshly baked artisan breads and pastries
made-to-order café foods
"Live Consciously.
Eat Deliciously."
Warm environment 1,652 locations 809 company-owned/843 franchised Run under the Panera Bread® and other names. Reasons for
Going to Mexico What we gain from Alsea A leading restaurant operator in Latin America Knowledge & expertise of Mexican market
Shared risk
Way into the Latin American Market Family income level
Workers Target Market 2002 76.4% Mexican Population in Urban Areas

Rate of Urbanization 1.2% annually

Urbanization Benefits Panera
Larger Market
Higher demand for healthier food Urbanization Mexico Per capita food consumption in 2012 increased 3.4% projected 13.9% by 2017

Local Family Run
Switch from local to chain Market Environment Market Environment and Service/Product Adaptation Local Cuisine
Adapt and integrate
Tortas-Traditional Sandwich
Pozole-Traditional Soup
Mexican Sides
Traditional Mexican Pastries
Coffee Consumption Product Adaptation Local, Fresh, Sustainable
Provide a Clean and Healthy Atmosphere
Dedication to Supplying Good Food Options “Live Consciously, Eat Deliciously” Middle to High Income

Panera to Provide:
Healthy and Fast
Good Quality
Traditional Alternative Target Customer Hofstede's Cultural Dimensions Foodservice Visits Federal Constitution Republic with executive, legislative, and judicial branches.
PRI party back in office after 12-year hiatus.
Current President: Enrique Peña Nieto
Making strides to eradicate corruption.
NAFTA provides increased market opportunity. Government Labor Market Trends Civil Law System
Non-observance of copyright and trademark protection; poor regulatory framework. Legal Corruption still exists at all levels of government.
Lubrication bribes are commonly used to expedite and enhance business growth. Ethical 5 Years
Open stores in:
4 million people
2nd largest city in Mexico
Other Mexican cities
10 Years
Expand into other Latin American countries
Beyond 10 Years
Work with charity programs to donate food, support low-income people 10-Year Plan Joint venture with Alsea
First Year
7 stores in Mexico City
Mexico City:
20 million people
financial and government center
many professional working women/mothers
8 stores in Monterrey
4 million people
tends to have tastes similar to US
high per capita income
link to all of Northern Mexico 10-Year Plan Timeline & Growth Horizon Logistics and food distribution services

Company size and resources supported by a vast in-house distribution network

5 distribution centers across Mexico

Fleet of delivery trucks Alsea Distribution System Alsea Supply Chain 13th largest economy in the world
Mixed economy dominated by free market companies with some key industries owned by the government
Export-oriented country
58% of labor force is in the service sector Economy Overview Fresh ingredients and bread through Alsea distribution system
Supplies delivered on Alsea trucks
Rely on Alsea to market the Panera brand in Mexico International Value Chain Source: OECD High extortion rates
--> anywhere from $100 per week to $10,000 Extortion Issue Mexican pesos (MXN) per US dollar -
13.25 (2012 est.)
12.423 (2011 est.)
12.636 (2010 est.)
13.514 (2009)
11.016 (2008) Exchange Rate Risk Economic System Source: Federal Reserve Economic Data Cost of Labor Source: OECD Household Disposable Income Minimum wage: 62.33 pesos per day

For an eight-hour day, that comes to 7.79 pesos per hour -- or about 60 cents per hour Mexico United States Minimum Wage: $7.25 per hour Panera Bread Company Mai, Katie, Abi, Jordan and Lesley Entry into Mexico Wholly-owned subsidiaries
Greater risk associated with lack of knowledge of the market.
Greater risk associated with less control of franchisers and their distribution channels. Alternatives Outline Panera Overview
Political/Legal/Ethical Environment
Economic Analysis
Cultural Environment
Market Environment
Entry Mode
Alternatives Trends Political, Legal, & Ethical
Environment in Mexico 44 US states and Ontario, Canada
Quick Service Restaurants
Coffee Shops
Casual Dining segments.

Administrative Processes
Development Processes
Supply Chain. Part-time employment ban lifted in November 2012.
Increased efficiency in food service sector.
Result: more jobs added to formal sector, greater opportunity to extend benefits.
2009-2010 Global Competitiveness Index: ranked 60/133 Shared Services Center Works with: Power Distance
Uncertainty Avoidance
Long term orientation Questions?
Full transcript