Paner Bread External Analysis

Another organizational crisis arose in 1995 when efforts to expand the Saint Louis Bread chain in order to increase brand awareness backfired as consumers favored Saint Louis Bread over its parent company. To solve this conflict, new divisional presidents were created for each chain, and in 1999 Shaich convinced the board of directors to sell all the Au Bon Pain cafes and restructure the Saint Louis Bread chain under the name Panera Bread. Panera’s current organizational structure utilizes vertical integration, with 17 fresh dough facilities that deliver to 1,591 cafes and franchises (“Our History”). Upper level managers now make menu and pricing decisions and overlook the marketing, franchise, concept development, legal, technology, supply chain, and human resource departments (“Organizational Chart”). Lower level

As mentioned in the case study, Panera Bread Company is known to be one of the leading bakery/café that offers freshly baked pastries and French inspired entrées across various states in the US. However in the recent years, Panera Bread faced a decrease in their usual high growth rate from 9.1% and 12.0% in the year 2000 to merely 0.2% and 0.5% of comparable sales and annualized unit volumes respectively.

A key aspect of Panera Bread’s business that protects the company from direct competition in the fast food industry is their product niche, artisan fast food. Fast food chains are often criticized for offering unhealthy foods. But, Panera Bread focuses on a higher nutritional value in their products. Dine in restaurants are very susceptible to drops in consumer spending, so Panera Bread’s

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.

Panera has created and demonstrated many center skills. From the earliest starting point, Panera has had the objective to surpass client desires. This begins with the offering of brilliant mid-evaluated food. Ensuring that Panera will dependably heat great bread are the territorial crisp batter dispersion focuses, that convey the top-notch mixture for the bread shop bistros to prepare. Panera will frequently "audit and enhance our menu offerings to include new taste profiles we trust our clients desire" (Panera Bread). "We trust our menu development is one reason our esteem scores with clients remain so solid. Zagat 's 2011 shopper created National Eatery Networks Study for eating in a hurry rates us number one among

Panera Bread has established itself as one of the most popular, fast growing “bakery-café” restaurants in the United States as well as in Canada. With 1,800 locations in 45 states, the franchise appears to be unstoppable. This in part is due to the superior customer service experience that keeps customers coming back time and time again. Just to give you an example, in 2012; the most recent year that data is available, Panera Bread brought in an astounding $2.13 billion in revenue, about $1 billion more than its revenue in 2008.

Panera has three business segments: Company-owned bakery-café, franchise operations and fresh dough operations. The company’s growth strategy was “to grow their store profits, to increase transactions and gross profits per transaction, use capital wisely and put into place drivers for concept differentiations and competitive advantage” (Vincelette & Fogarty, 2010, p7.). In 2009 while everyone else was experiencing the hard economic times Panera Bread was sticking to their strategic plan. Panera did not lay off employees, or worry about closing underperforming stores. Instead, they continued to add menu items and even increased prices on existing items. This strategy worked for them and they were able to take advantage of clientele that came from fine dining. The company has

The first is to join item qualities and client includes that lower the purchaser's general expenses of utilizing the organization item. Panera does not take after this course viably on the grounds that they have high working expenses compelling them to increment or keep on selling their items at a high value contrasted with their opponents. In FY2009, Panera Bread's incomes come to $1.35 billion, a 4.1% expansion

The Panera Bread Company is starting 2007 with unfinished goals and missed targets previously set and a review of their strategy is in order to continue their ongoing success. The company has grown substantially since its inception in the competitive restaurant industry; however, an aggressive target of 2,000 Panera Bread bakery-cafes will require a focused strategic plan. The company has a strong base with loyal customers who appreciate Panera’s unique dining atmosphere with a focus on quality products at a reasonable price. Panera will need to continue its market research and focus on environmental issues, which are an important core value. The opportunity for

Currently Panera Bread is implementing a broad differentiation strategy. Panera’s target market focuses on urban workers and suburban dwellers. Panera’s core concept is to create a unique café experience, while providing high quality fresh baked goods. Panera’s long term strategy includes increasing it’s brand awareness, and to become the leader in the specialty bakery-café segment. In order to achieve this goal, Panera plans to expand its locations, boost earnings per share 15%-20% annually, and increase sales 4%-5% at existing locations.

Panera’s strategy was called Concept Essence. In simple terms they wanted to be, “better than the guys across the street.” This included offering an appealing selection of breads, bagels and other handcrafted pastry products that were baked fresh daily at each location. They only serve high-quality foods at what they believe was a good value. They developed a menu that was offered diverse selections in an effort to draw customers from breakfast through dinner. Provide above quality customer service and to make sure their patrons enjoy a satisfying dining experience. Panera also sought to ensure that all of their locations were aesthetically soothing and inviting to potential patrons.

Being a nationally recognized brand and a dominant in restaurant operations in the specialty bakery café segment and to expand broadly in the regional market is Panera’s strategy. And by giving high quality product Panera is following their strategy.

Panera Bread quadrupled revenues from $282,225,000 to $828,971,000 by 2006. Most of the revenue has come from their bakery-café sales. They also generate revenue from the sale of dough to their franchise locations as well as the franchise fees they charge to their franchisees. Panera Bread has been very profitable in part because they have avoided taking on large marketing endeavors and employ a long supply chain to get supplies from one franchise to another. Plus, with bulk or pooled purchasing of certain supplies, Panera Bread exercises bargaining power over suppliers. Their operating profit margin denotes the success they had in the early years of the operation such as in 2004. However, that margin slightly shrank over the next two years, 2005 and 2006.

Panera Bread is considered to be one of the U.S. most successful fast-casual restaurants. The company is one of the revolution makers in the industry of fast food, which managed to transform the traditional image and perception of to-go products that are available at an acceptable price on the market. As its initial founding company was established in 1981, Panera Bread managed to gain up to 4.5 billion USD in sales by the year of 2015, whereas the average sales per one store made up to 2.5 million USD annually (Thompson). Nevertheless, the company that once managed to upgrade bread and pastry into a trend of fast and healthy eating, today is struggling with massive competition on the fast food market. Its previous strategic strengths now became a burden that stops innovation and creativity and does not

Its current objective is to develop and increase its bakery-cafe restaurant locations by more than 2,000 before the year 2010. With this, Panera Bread Company has the opportunity to increase market share by attracting potential customers away from their competition amongst the fast-food casual restaurants.