Panera Bread Case

Decent Essays

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, …show more content…

With long-term debt Panera Bread is not obligated to pay back the entire loan within a year and will be able to slowly pay it off over the course of many months. This will have a much smaller financial impact on Panera from month to month as the repayment amount wont be as much as short-term debt. With the use of long-term debt the company can get back on track and increase their growth while maintaining margins. This will lead to an influx of revenue that can be used to pay off the long-term debt. In addition to this once the company reaches their growth goals they will be able to increase prices to increase the margins again, once again helping to pay off the remaining long-term debt issued. Short-term debt is more desirable for a brand new company that has uncertain costs. Panera Bread has been established for several years and has a relatively good idea on what their costs should be. With short-term debt you cannot borrow as much, and the millions of dollars that would be needed might be too much to repay within a year for the company. The company simply needs too much money to use short-term debt. Long-term debt gives the firm the time and money they need in order to meet their

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