Panera Bread Case

In: Business and Management

Submitted By heyhellohi
Words 844
Pages 4
Panera breads business model is, “to provide a meal and dining environment of sufficient high quality that customers would gladly pay for that quality – at a price that would also make the company financially successful” (Panera Bread Case). Through Panera Bread’s business model one can see that they took the marketing technique of higher quality for slightly higher prices. Panera bread differentiated itself from many competitors through its superior quality and welcoming environment. This business model deemed successful at first and helped the company to grow and maintain profits, but over the recent years Panera has been running into some obstacles. Personally I like their business model and it has been proven with their early success, but every business model can be improved to address current problems.
Originally Panera had financed its growth through retained earnings and increases in equity capital from stock options and employee stock ownership plans. This is great since they did not need any external financing and had little to no debt to worry about. This did not last too long due to the increase in production prices and decrease in margins leading to Panera’s inability to meet their desired growth. In order to maintain their wanted growth they would have to tighten their margins. This, however, led to the stock price dropping 10% on the third-quarter announcements and about 40% over the last year.
This business model began experiencing problems with transaction growth where they counted for the increase in same-store sales but ignored the effect of price increases. This began at the very end of 2006 and continued over to 2007 and on. The transaction growth problems led to a decrease in margins for Panera Bread. Another problem the firm faces is trying to raise funds for the $75 million dollar stock repurchase they wanted. I think the best way to help…...

Similar Documents

Case Study 5.1 Panera Bread

...Q1. How has Panera Bread established a unique position in the restaurant industry? How has this unique position contributed to the firm’s success? Do you think Panera Bread will reach its goal of becoming a leading national brand in the restaurant industry? Why or why not? Panera Bread has established a unique position in the restaurant industry by developing itself with various approaches. First of all, Panera Bread has observed the consumer always wanted good food quality and speed services. This has given the Panera Bread an opportunity to reposition itself by joining the concept of fast food and casual dining category. This category provided the consumer the alternative they wanted by capturing the advantages of the both categories. Besides, with the good timing which became the first mover to this new category also led itself to this favorable position. This new category has made Panera Bread’s position not only unique but also contributed to its success. Panera Bread did a lot of things to distinguish itself from its rivals such as adding specialty food, different menus, catering service, new time suggesting of specialty food and providing inviting neighborly atmosphere. According to the text, Panera Bread serves nearly six million customers a week systemwide and become one of the largest chains. This shows that the unique position has contributed to its success. In my opinion, I think Panera Bread will reach its goal because the company is relying on its unique......

Words: 1649 - Pages: 7

Panera Bread Case

...Case # 5 Panera Bread Company 1. What is Panera Bread’s strategy? Which of the four generic competitive strategies discussed in Chapter 3 most closely fit the competitive approach that Panera Bread is taking? What specific kind of competitive advantage is Panera Bread trying to achieve? Driving concept: to provide a premium specialty bakery and café experience to urban workers and suburban dwellers. Generic: Broad differentiation strategy. Competitive advantage: striving to build a competitive advantage based on the triple combination of Product, Environment, and Great Service (PEGS). 2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? Strengths: * Attractive & appealing menu * Bread-baking expertise (a core competence) – artisan breads are Panera’s signature product. * Nationwide leader in the bakery-café segment * High ratings in customer satisfaction studies * Good brand name * Fresh dough operations & sales to franchised stores * Initial success in catering * Good franchisees – higher sales in franchised stores compared to company-owned * Financial strength of the company – able to grow without taking on too much debt Weaknesses: * A less well-known brand name than some rivals (Applebee’s, Starbucks) * Sales at franchised stores higher than company-owned stores – Why? External Threats * Rivals begin to imitate menu offerings/or dining ambience...

Words: 782 - Pages: 4

Panera Bread

...Case # 5 Panera Bread Company 1. What is Panera Bread’s strategy? Which of the four generic competitive strategies discussed in Chapter 3 most closely fit the competitive approach that Panera Bread is taking? What specific kind of competitive advantage is Panera Bread trying to achieve? Driving concept: to provide a premium specialty bakery and café experience to urban workers and suburban dwellers. Generic: Broad differentiation strategy. Competitive advantage: striving to build a competitive advantage based on the triple combination of Product, Environment, and Great Service (PEGS). 2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? Strengths: * Attractive & appealing menu * Bread-baking expertise (a core competence) – artisan breads are Panera’s signature product. * Nationwide leader in the bakery-café segment * High ratings in customer satisfaction studies * Good brand name * Fresh dough operations & sales to franchised stores * Initial success in catering * Good franchisees – higher sales in franchised stores compared to company-owned * Financial strength of the company – able to grow without taking on too much debt Weaknesses: * A less well-known brand name than some rivals (Applebee’s, Starbucks) * Sales at franchised stores higher than company-owned stores – Why? External Threats * Rivals begin to imitate menu offerings/or dining ambience...

Words: 782 - Pages: 4

Panera Bread Case

...Panera Bread Case 1. What is Panera’s Strategy? Which of the five generic competitive strategies most closely fits the competitive approach that Panera is taking? What type of competitive advantage is Panera trying to achieve? Panera Bread’s strategy is to provide a premium specialty bakery and café experience to urban workers and suburban dwellers. As well as to create a specialty café anchored by an authentic, fresh-dough artisan bakery and upscale quick-service menu selections. Broad Differentiation is the competitive approach Panera Bread has taken. They compete on the basis of providing an entire dining experience they call “Panera Warmth” .Their environments are distinctive and engaging, have an alluring and hospitable atmosphere, free Wi-Fi , real china & stainless silverware. Also regular changes in menu offerings to adapt to consumer wants and needs are points of emphasis to differentiate themselves from the competition. The type of competitive advantage they’re striving to build is based on the triple combination of Product, Environment, and Great Service (PEGS). Prior to Panera Bread going nationwide, the management performed cross-country market research and concluded that consumers could get excited about a fast and high quality dining experience, called fast casual. Panera Bread is attempting to achieve competitive advantage with offerings that rivals don’t have and can’t afford to match. In this case, delicious handcrafted bread arriving fresh daily,......

Words: 1054 - Pages: 5

Panera Bread Case Introduction

...convenient enough to where it can compete with the fast-food concept. The “star of the show” and the foundation of the value proposition was Panera’s renowned authentic, baked fresh daily in the store artisan bread, as a main staple on the menu. The menu initially consisted of breakfast breads and pastries, sandwiches, salads and soups and was served on-site. Through the years the restaurant expanded their menu to include a variety of seasonal items, fruit smoothies, Espresso bars, etc. By offering a unique high quality menu options paired with its ambience Panera has been successfully gaining ground on some of its main rivals such as McDonalds, Chili’s, Applebee’s and California Pizza Kitchen, to name a few. Furthermore, management expanded the concept to incorporate catering, which has become a significant addition to the revenue stream. Yet even with the rapid growth, product line-up and service options expansions, the company never lost sight of its roots or waivered from the original concept of offering high-quality food, great customer service and “feels like home” atmosphere. “Panera was founded on the belief that quick food could be quality food,” said Ron Shaich, founder, Chairman and CEO . Being able to establish and gain market share in the fast casual” industry Panera Bread Co competes in didn’t come overnight was a result of carefully crafted and executed strategy, which was a product of many years of experience and great minds....

Words: 282 - Pages: 2

Panera Bread Case

...Heather Abramovic @02380550 Case Analysis of Panera Bread Company What does a SWOT Analysis reveal about the overall attractiveness of its situation? A SWOT analysis sizes up a company’s strengths and weaknesses; it’s market opportunities, and any external threats to the company’s well being. It identifies its strengths and weaknesses and provides the basis for crafting the best strategy for the company. Panera Bread’s most competitively valuable strengths have to be their attractive menu and aesthetically pleasing environment in each bakery-café. Panera also has a compliment see customer service they have won many awards and honors such as the prestigious Business Week’s 2010 list of the 25 “Customer Service Champs”. They have achieved these along with market success by providing courteous, capable, and efficient customer service. I believe a distinctive competence that Panera has is their fresh in-house baked pastries and bread that encompass top quality and detail that in return differentiate Panera from it’s competitors. With a strong strategic vision, proven competitively superior competencies, superior attention to customer needs, and a strong brand, Panera Bread appears to have a very attractive future and continued success in their industry. As long as they continue with their strategic vision they have in place, I believe Panera Bread will have no problem continuing their success in the market. Which rival chains appear to be Panera’s closest rivals? The......

Words: 1085 - Pages: 5

Panera Bread Case

...BACKGROUND 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. 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. Panera depends on increased sales of franchises and increased revenues in same store sales to continue at its large growth rate. Panera Bread Company is a......

Words: 1176 - Pages: 5

Panera Bread Case

...Executive Summary Case Questions Does Panera need to take on debt to fund the $75 million stock repurchase? Recommendations: * We recommend financing the stock repurchase using a $75MM long term loan. * We want to maintain a safe cash balance in order to meet short term obligations. * Taking on debt gives the company the ability to use cash for projects and short term investments. * We want to avoid sacrificing our liquidity ratios in order to finance this repurchase. * * We do not recommend taking on debt beyond the $75M needed to repurchase stock. * The company has sufficient liquidity to finance ongoing operations without taking on additional debt. * Taking on debt more than the $75M needed to repurchase stock would be against company philosophy of maintaining low long term debt levels. * Taking on more debt than required would result in unnecessary interest expense. Analytical Approach Scenario Analysis * Base Case * Revenue, PPE, goodwill, and liabilities are grown at 25% for 2008-2009 and 5% for 2010-2012. * COGS, SGA, and current assets,are forecasted as percents of revenue. * Depreciation is predicted as a percent of PPE. * Interest is predicted as 6% of debt. * Tax rate is predicted to be 36.5% for all forecasted years. * 100% Cash Funded Repurchase * All assumptions are identical as base case except for changes to cash......

Words: 1912 - Pages: 8

Case Study 5.1 Panera Bread

...Q1. How has Panera Bread established a unique position in the restaurant industry? How has this unique position contributed to the firm’s success? Do you think Panera Bread will reach its goal of becoming a leading national brand in the restaurant industry? Why or why not? Panera Bread has established a unique position in the restaurant industry by developing itself with various approaches. First of all, Panera Bread has observed the consumer always wanted good food quality and speed services. This has given the Panera Bread an opportunity to reposition itself by joining the concept of fast food and casual dining category. This category provided the consumer the alternative they wanted by capturing the advantages of the both categories. Besides, with the good timing which became the first mover to this new category also led itself to this favorable position. This new category has made Panera Bread’s position not only unique but also contributed to its success. Panera Bread did a lot of things to distinguish itself from its rivals such as adding specialty food, different menus, catering service, new time suggesting of specialty food and providing inviting neighborly atmosphere. According to the text, Panera Bread serves nearly six million customers a week systemwide and become one of the largest chains. This shows that the unique position has contributed to its success. In my opinion, I think Panera Bread will reach its goal because the company is relying on its......

Words: 309 - Pages: 2

Panera Bread

...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’s strategy is to used focused differentiation to create the “quick-casual” style of dining that many new food chains are adapting today. Urban workers construct a large portion of Panera’s target, while suburban residents make up a differentiated target demographic. Panera provides comfortable, clean dining with fresh and healthy ingredients, which consumers pay a slight premium for over fast food. Panera’s competitive advantage is the high-quality product at a reasonable price that customers will choose over the options of their competitors. 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? Strengths: Product Differentiation Good dining experience Franchises Strong Brand High Quality/healthy Ingredients Vertical Integration Strong Growth Model Known for generally good corporate ethics Weaknesses: Pricey food options Geographic Concentration Ingredients have short shelf-life Opportunities: More Franchise locations Breakfast foods Improving economy (more disposable income) Rising Organic Market Take-Home Grocery option Threats: Rely on many gluten foods More......

Words: 1503 - Pages: 7

Panera Bread Case

...At the end of 2007, Panera Bread Company was in an unfamiliar position where taking out debt was a necessary action to gain funding. Raising prices would be an option to help with the deteriorating margins, but there is fear that this move will slow the growth of the company. Other options, such as lowering the quality of food, would go against Panera’s fundamental goal of serving high quality food. At this time, Panera is in a position where it needs to repurchase stock. The $75 million buy-back should help give confidence to their shareholders. However, to accomplish their growth goals and stock repurchase, Panera will require external funding for the first time. Given Panera’s financials from 2003-2007, we forecasted Panera’s income statement and balance sheet for 2008-2012. In our forecasting for the following years for Panera Bread, we started off by deciding what kind of percentage of sales we would take: either the previous year’s percentage or the average of those five years. We decided that if there was a trend in the previous years (2003-2007) percentages, it would make sense to use 2007’s percentage of sales. In this case, a trend would either be a steady increase or decrease as a percentage of sales. If there was no evidence of a trend, we used the average of the previous years to forecast. In the example below, “dough sold” as a percentage of sales, decreased steadily from 2003 to 2007. On the other hand, depreciation fluctuated as a percentage of sales, leading...

Words: 795 - Pages: 4

Panera Bread

...Question7: 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. They all sell a similar combination of products. e.g: Menu of Einstein and Panera are quite similar. Both menus for breakfast include; bagels, scones, cinnamon twists, coffee cake, cookies, and muffins. Lunch menus include; soups, salads, and sandwiches. They also both offer hot and cold beverages. * Starbucks which has more than ten times more locations and around eight times more revenue. Like Starbucks, Panera Bread hopes to convey a casual, friendly atmosphere for people to “chill out” and enjoy the Wi-Fi and good times with friends. * While these are the closest rivals, Panera must also compete with casual dining restaurants, fast food places and any number of other locally- owned establishments. 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 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 than PBC, also has reached around of the 40% in revenues than Panera. Comfort, family customers and customer acceptance segment Cracker Barrel represents a risk; the......

Words: 295 - Pages: 2

Panera Bread Case Study

...Panera Bread Case Study MGMT 1/30/16 Synopsis Panera Bread is a company well known for their healthy, sophisticated, all natural breads and sandwiches. The restaurant focused on the consumer that was tired of the everyday burger and fries that other fast food restaurants relied upon for majority of their sales. Customers gladly paid well over five dollars a sandwich for that homemade taste that Panera was known for and built their reputation upon. Panera Bread strives for excellence in their operations as well as their menu. Ronald Shaich’s vision was to have a profitable company without cutting corners on quality. He focused the company’s strategy on consumers that could afford to pay more for a healthy meal instead of unemployed customers that wanted discounted unhealthy food that Panera’s competitors focused on such as Burger King. This strategy paid off because even during the recession of 2008, Panera continued to grow while there competitors sales declined. Throughout the 2000s, Panera continued to grow through new franchise agreements as well as acquisitions of other bakery cafes. This led Panera to become a national bakery-café that owned/operated over 1,400 stores in over forty different states, as well as in Canada. Panera in its early years grew from a small sixty customers a day, to an astonishing six million customers a week in present day. The company is now one of the largest food service companies in the United States, while......

Words: 1854 - Pages: 8

Panera Bread Case Study

...Panera Bread Company (2010): Still Rising Fortunes? Synopsis At the time when Panera was built, the fast-food industry was characterized as highlighting low-grade burgers, greasy fries, and sugared colas. Shaich chose to create an informal but comfortable place where consumers could eat fresh-baked artisan breads, sandwiches, and salads without bothering about either it was healthy or not. Panera Bread Company assists as a retail bakery/café restaurant. In 1993, Au Bon Pain Company acquired St. Louis Bread Company. Earlier this, the St. Louis Company was contained of 20 bakery/cafes in the St. Louis area. From 1993 to 1997, Au Bon Pain altered all their bakery café names to Panera Bread. By 1999, Au Bon Pain sold all sales except for Panera Bread Company. Panera Bread Company has maintained growth everywhere their quarters. Panera currently has 429 franchise operations and 173 company-owned bakery/cafes. By growing their sales of franchises, Panera is progressing in other areas as well. The CEO and chairperson of Panera Bread Company is Ronald Shaich. Then Shaich has been the CEO, Panera’s revenue has rose from S350.8 million in 2000 to S1353.5 million in 2009. The key actions of Panera’s growth strategy concentrated on raising store profit, gross profit per transaction and increasing transactions using its capital smartly. The company contributed precise assistances to the expansion of new markets and further penetration of existing markets by controlled franchised......

Words: 899 - Pages: 4

Mhr 318 Panera Bread Case

...Seleang Buth MHR 318-06 April 3, 2011 Case 1 – Panera Bread Company 1. What do you describe as Panera’s purpose, mission, and strategy? As stated on Panera Bread official website “a loaf of bread in every arm” is its mission statement. From the mission statement, I can assume a friendly, fun and confident strategy being in use. The article mentions that Panera wants to satisfy customers, probably enough to get all customers in the store to purchase a loaf of bread! 2. How well has Ron Shaich utilized the open systems model of organizations in moving Panera Bread Company forward in its competitive environment? Ron Shaich has utilized the open systems model of organizations in moving Panera Bread forward in its competitive environment very well. Panera Bread is constantly satisfying the customers by taking it customers’ input in the product. For example, when “Panera recognized that trans fat was a growing concern to our customers and the medical community. Therefore we made it a priority to eliminate it from our menu” (p. w-38, par. 2). Panera currently have zero trans fats on the menu. 3. What are the challenges to the management process posed by Panera’s fast paced growth? What problems do you see Shaich having to resolve to continue his record of success with the firm? Some challenges to the management process posed by Panera’s company. In the future, Shaich will have to continue to “be in the know” of what the trend is and will be as time......

Words: 392 - Pages: 2

Freakish | Barry Pepper | Au service de la france