Essay about Panera Bread Case Study

The Panera Bread legacy started in 1981 as AuBon Pain Co., Inc. In May of 1999, all of the AuBon Pain Co., Inc.’s business units were sold, except for Panera Bread, thus the company was renamed Panera Bread (Panera). As of December 2015, there are 1,972 bakery-cafes in 46 states, the District of Columbia, and in Ontario Canada (Panera, n.d.). Today, Panera Bread has a market capitalization of $4.5 billion and continues to be on a journey to serve food, as it should be. They continue to strive on serving quality foods that are free of artificial ingredients and making sure customers have a great experience.

The formation of Panera Bread began in 1978 when Louis Kane bought Au Bon Pain, a retail producer of baked goods. Kane changed it to a wholesale business by opening two cafes and staffing them with bakers and employees, but high production costs made it impossible to cover his overhead. In 1981 Kane decided to remain responsible for site selection and financing, but he chose Robert Shaich to help turn the company around as President of internal operations ("Au Bon Pain History").

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.

The company then managed a comprehensive re-staging of Saint Louis Bread Co. Between 1993 and 1997 average unit volumes increased by 75%. Ultimately the concept's name was changed to Panera Bread. By 1997, it was clear that Panera Bread had the potential to become one of the leading brands in the nation. In order for Panera Bread to reach its potential, it would require all of the company's financial and management resources. In May 1999, all of Au Bon Pain Co., Inc.'s business units were sold, with the exception of Panera Bread, and the company was renamed Panera Bread. Since those transactions were completed, the company's stock has grown thirteen-fold and over $1 billion in shareholder value has been created. Panera Bread was recognized as one of Business Week's 100 Hot Growth Companies. As reported by The Wall Street Journal's Shareholder Scorecard in 2006, Panera Bread was named as the top performer in the restaurant category for one-, five- and ten-year returns to shareholders.

By 1997, it became clear that Panera Bread had the potential to become one of the leading brands in the nation. In May 1999, to expand Panera Bread into a national restaurant, all of Au Bon

The focal point of this is essay is none other than Panera Bread. Louis Kane and Ron Shaich established a bread kitchen bistro called Au Bon Pain Company Inc. in 1981. The organization developed and succeeded through the 1980's and 90's. Saint Louis Bread Company was purchased in 1993 by the association the company already had 20 different locations that covered vast areas of Saint Louis in the first place. Saint Louis Bread Company was at first established by Ken Rosenthal. In May 1999 Panera Bread ventured into a national eatery, Au Bon Pain Co. sold their different chains including Au Bon Pain, which is currently claimed by Compass Group North America. Panera moved its central command to another area in Richmond, Heights Missouri in 2000.

* The company has sufficient liquidity to finance ongoing operations without taking on additional debt.

Expanding the target market of Panera Bread is a good growth opportunity for them. This can be achieved by product line (menu options) extension or by entering international market outside the American continent so as to increase their geographical coverage. In addition, Panera has an opportunity to get additional market and growth by adapting rapidly to changing market and customer preferences. They need to advertise and market themselves as a healthy option for eating out. Health oriented food or food that are low in calories, sugar, cholesterol, etc. is getting very important as people started becoming very health conscious and selective. Their effort to roll out new products with fresher ingredients such as antibiotic-free chicken needs to be further expanded. Recognizing the health risks associated with transfat, Panera had completely removed all transfat from its menu by 2006. Organic food, non GMO, etc. They could increase number of their franchises. A number of markets were still available for franchise development. The have opportunity in front of them to open more outlets, both company-owned and franchises. They could open within North America and mainly in areas where they are not present now, and those areas where the growth potential is good, like some of the suburban markets. Many good locations for fast casual dining options are available in many of the untapped areas. Panera has a good market opportunity outside the small urban niche where greater growth

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.

The sale of Au Bon Pain lead to their corporate name change to Panera Bread Company. In the early 2000’s the company grew through franchise agreements, acquisitions and expansion. In 2010 Shaich stepped down from his roll of CEO to the company’s executive chairman to focus on concept and strategy. Shaich had what he referred to as concept essence the blueprint of what he wanted to achieve. “Concept essence included a focus on artisan bread, quality products and a warm, and friendly, and comfortable environment” (Vincelette & Fogarty, 2010, p4.).

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

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 Company got its start when in 1980 Louis Kane and Ronald combined Au Bon Pain and the Cookie Jar bakery to form one company. By combining their individual strengths they were able to work as a team and expand the business, decrease company’s debt and centralize facilities for dough production (Wheelen, Hunger, Hoffman & Bamford, 2015). In 1993 the company acquired the Saint Louis Bread Company. With the three companies now working as one the company eventually became the Panera Bread Company with 1464 bakery cafes in 2010 including one in Ontario, Canada. Today Panera Bread has a board of directors that consists of six members divided into three classes of membership.

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