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 cafй 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 cafй 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-cafй nationwide

• Award winning sourdough bread

• High quality food

• Strong Financial Condition

• Loyal customer base

• Powerful Strategy

• Known brand name

Panera’s Resource Weaknesses and Competitive Liabilities :

• Low brand awareness in new markets

• Limited product line

Panera’s Market Opportunities:

• Increasing health conscientious among consumers

• Few direct competitors

• Ample room to expand into new markets

• Expanding the product line

External Threats to Panera’s Future Well-Being and Profitability:

• Due to high profit margins, potential for competitors to enter the market

• A shift in buyer needs and tastes

• Slowdowns in market growth

Conclusions concerning the attractiveness of Panera Bread’s overall situation:

The above SWOT listings for Panera Bread reveal that they have an attractive set of strengths. They also have attractive opportunities that are well suited to its strengths. The one weakness I think Panera should worry about would be limited product line. Panera does offer different product but when compared to the whole fast-food industry they don’t have an extensive menu. I don’t think any of the threats are too alarming. They company should be able to deal with them if they were to come along. Panera should use their known brand name to help expand into new markets. They could also expand their product line in connection to the increasing health conscientious among consumers. They could offer consumers healthier and more options or food and beverages.

3. What is your appraisal of Panera Bread’s financial performance based on the data contained in case Exhibits 1, 2, and 8? How well is the company doing financially?



Panera’s total revenues have grown from $282,225 million in 2002 to nearly $828,971 million in 2006, equal to a strong compound average growth rate (CAGR) of 30.91%.

Franchise royalties and fees are up from $27892 million in 2002 to $61,531 million in 2006,