...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, served...
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...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 threat...
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...September 25, 2012, they have over 1,600 locations in over 44 states and Canada. More than 776 of its locations are company-operated, while the rest are run by franchisees. Its locations operate under the names Panera Bread, Saint Louis Bread Company, and Paradise Bakery & Café. Panera offers the projection of an inviting atmosphere in all of its establishments. The stores are located mostly in suburban areas with their target consumers being the urban workers and local community. Panera Bread Company has the mission statement of “a loaf of bread in every arm”. The main goal of Panera Bread is to change America’s eating habits. They produce more bread each day than and other bakery-café in the country. The menu at Panera ranges from muffins and bagels to soups, made-to-order sandwiches, and salads. They also have multiple coffees, frozen drinks, teas, and soft drinks. Panera is recognized for leading the nationwide trend for specialty breads. The Wall Street Journal reported that according to research conducted by TNS Intersearch, Panera Bread scored the highest level of consumer loyalty among quick-casual restaurants. It also ranked #2 among the Excellent Large Fast-Food Chains (500 of more units) in the Sandelman & Associates 2011 Quick-Track ® Study. Panera has earned several awards for growth and customer service in nearly every market in which it resides. The 2012 Harris...
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...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 continuing...
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...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 progressed...
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...Finding of Fact #2: The Panera Bread Organization does not have a forceful promoting system and expects to give clients a chance to find Panera all alone. Panera's administration is not as quick as other fast-food organizations and charges higher costs. Panera has higher costs than opponents, which could be because of their working expenses. Panera has extended in the previous years; however, the areas are thought topographically. Recommendation #2: Panera had chances to proceed with their achievement in the quick easygoing industry. They can attempt to control working costs that may be crazy or pointless. The organization ought to consider venturing into new markets and growing topographically, even globally. Items can ceaselessly be made...
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...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...
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...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 bakery-cafés...
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...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 and...
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...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...
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...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...
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...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 small...
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...Morgan Johnson 1/11/16 Block 4 Green Classification Essay The Category Game As a miserable employee of the Panera Bread Restaurant/Café/Bakery, I confess that I have spent the most of my shifts during the past 2 years categorizing any and all customers I come in contact with. This childish game I play in my own head, and sometimes with my co-workers, can last anywhere from 4 to 10 hours. Every person that walks through Panera’s streaky glass doors on a mission to feed themselves the most overpriced and overhyped food, fall victim to this game. Nine times out of ten I am the first employee an incoming customer sees. Nine times out of ten I am the first employee to observe a customer’s behavior, prepare myself to act as fake as the ingredients in processed foods, and provide the customer service that I am required to do as specified in my job description. There are several factors that play into where a customer lies on the “enjoyable” to “ready to march my-underpaid-self straight out the front doors” scale, and I within a 60 second interaction with a person, I can put them exactly where they belong. Like most food based businesses, we have our regular customers that come in anywhere from 1 to 15 times per week to get their favorite drink, snack, meal, or bakery item. I can proudly say I adore approximately 80% of them. I have multiple “family members” that aren’t necessarily blood related to me. This 80% of the regular customer population fall under the enjoyable, crazy...
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...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 business...
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...Creating a Business Gerri Lutz Professor Ashok BUS 10008616 July 25, 2010 When setting up a business there will be many challenges that you can encounter during this process. And why customers would pay a higher price for goods, and others less because of the quality of the product being marketed. In the following questions and answers, this will tell you why customers will definitely pay for the quality. 1. Identify at least three challenges when setting up a business. Explain why they are challenges. 2. Define what a “niche” product is. Give at least three examples of niche products. 3. Explain why a niche company might have an advantage in a market. Would price necessarily be an advantage? Explain why or why not. 4. Identify and explain three reasons why customers would pay more for exclusivity. 5. Explain how a niche player “chips away” at a larger competitor’s base. Give three examples of retailers who have done this. Identify at least three challenges when setting up a business. Explain why they are challenges. Financing: Does the owner have sufficient cash flow to fund the opening of the business as well as continuing operations? Many times an owner does have enough financial background to open their doors...
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