Case Analysis Panera Bread Essay

843 WordsApr 26, 20074 Pages
Panera Bread's sales growth rate for 2003 was 28.1% and 38.1% in 2002; therefore the sales growth rate for the company is increasing at a decreasing rate. The decreasing rate of sales growth may be attributed to the company's current marketing strategy. The company's ad-to-sale ratio was only 2.1% compared to the category average of 4% Also; Panera Bread does not have a lot sufficient of bargaining power with its suppliers, which may affect its net income. A loaf of bread in every arm is the current mission statement for Panera Bread, which is a narrow statement and limits the scope of the company's activities in terms of products and services. Considering the company is in the casual dining industry, the mission statement is…show more content…
Consumers are becoming more health conscious; therefore more consumers are going to be seeking healthy alternatives for food consumption. Also, since seniors are included in the company's niche market, the growth of the aging population could have a positive impact on sales. There is a high threat of new entrants entering the casual dining industry; therefore the company needs to address the issue by creating entry barriers through product and service differentiation and economies of scale. Considering substitute products fill the same need as Panera's products, the company needs to differentiate its products and services to create a want for Panera's product instead of a need. The bargaining power of suppliers may be a potential weakness for the company, because the company has contracts with all of its suppliers. The company appears to have a functional structure, which is appropriate for this type of business. The corporate culture of Panera Bread leads to efficient operations, because everyone in the organization appears to share the same beliefs, expectations, and values. Also, the company appears to have knowledgeable employees and franchise owners, which enhances the company's performance. The final recommendation for Panera Bread at the corporate level is to become less aggressive with its growth strategy; and use the competitive strategy on the business level. Considering the
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