panera bread case study

For this discussion, I have chosen a company that’s a lunchtime favorite in my office—Panera Bread Company, a steadily-growing national restaurant chain headquartered in Sunset Hills, Missouri. Ron Shaich, the creator of Panera Bread, joined with partner Louis Kane, the founder of the bakery-café chain Au Bon Pain Co., Inc. (ABP). In addition to ABP, Mr. Shaich started a “fast casual” sandwich shop that he eventually named Panera Bread, and once ABP was sold in 1999, Mr. Shaich focused on growing the Panera Bread brand. Within the next 15 years, Panera Bread practiced a slow but steady growth pattern and there are now more in 2,300 Paneras in the United States (Panera Bread Company, 2017).

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

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 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

The generic competitive strategy that Panera best fits is broad differentiation. This is primarily because Panera sought to be the first choice for patrons looking for fresh-baked goods, a sandwich, soup, a salad or a beverage in a pleasing environment. In this platform Panera has set their eyes on people who may not necessarily be looking for an expensive meal, but might also not want cheap, fast food but instead are looking for a fresh meal that can be enjoyed in a relaxing environment. In this Panera is looking for a

Profitability ratios decreasing from 2005 to 2006 although the sales has increased substantially and the net income as well but not in the same percentage of increase due to the high reliance on debt as the interest expense increased as mentioned before.

In the case, it is indicated that Panera manufactures its own fresh dough; which is not only produced, but also delivered daily all over the country. Management at Panera views this as a competitive advantage rather than viewing it as a costly process. Also, due to the rising cost of ingredients due to the current economy, it is likely that Panera’s menu pricing will experience a rise and possible item substitution or replacement. I have personally already experienced this. The price of ingredients greatly affects the menu pricing. In order for there to be an effective analysis of their cost, more information is required on the cost of producing the items listed on Panera’s menu. It would be suggested that Panera should evaluate ways to offer lower prices on their food without having a major financial impact on the company’s profit margin.

Among the crowded field of casual, quick-service restaurants in America, the distinctive blend of genuine artisan bread and a warm, comfortable atmosphere has given Panera Bread Company a golden opportunity to capture market share and reward shareholders through well-planned growth. With the objective of opening approximately 1,000 more bakery-cafes in the next three years, Panera Bread Company must make prudent strategy decisions about new store locations, supply-chain management and expanded offerings, all the while continuing its above-average earnings per share growth of at least 25 percent per year.

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

When examining Panera Bread Company, it possesses several strengths. One of the greatest strengths in providing great bread is the actual menu. Panera prides itself on the commitment to the quality and reliability of its products, which is supported by its focus on creating the menu. With an understanding of customers ' needs Panera has developed an extensive product line to satisfy a variety of tastes. Panera continually adapts the menu in response to seasons and changing customer preferences. For example, it introduced whole grain breads because customers were concerned with consuming good carbohydrates. Each bread product is artisan made in one of the seventeen dough facilities to ensure freshness

Panera bread’s growth strategy was to capitalize on Panera’s market potential by opening both company-owned and franchised Panera Bread locations as fast as was prudent (A. A. Thompson). Panera Bread work closely with franchised branches in order for the company to broaden its market penetration (A. A. Thompson). Panera Bread has taken the appropriate measures to gain a competitive advantage to make franchising a successful market for the company to enter. Considering Panera Bread Company keeps interaction with the franchised branches to ensure success gives them the upper hand to ensure continued success.

Panera Bread Company is a bakery-café chain that provides a quick-casual restaurant experience to its customers. Formerly know as St. Louis Bread Company, it was acquired by Au Bon Pain Company in 1993. With 1,027 locations as of end of 2006, the company generates revenue through three segments: company owned bakery-cafes, franchises bakery-cafes, and fresh dough distribution operations. The Missouri-headquartered firm, is publicly traded company on the NASDAQ as PNRA. The company sells freshly baked bread, pasta, sandwiches, salads and soups. Even though, Panera’s competitors are the traditional fast food chains, the company’s emphasizes on its fresh-baked, high quality and organic products that are delivered every morning from its dough factories. Metropolitan and suburbs citizen are the customers targeted by Panera. In fact, these bakery-cafés are mainly located in suburban shopping centers and malls. Customers are provided with premium fast meals in an appealing and comfortable environment, the fast casual experience, which distinguishes them from their competitors. In the recent years, the company was growing quite rapidly. Operating in the high competitive food industry, forces the company to maintain a steady growth in order to be profitable. Hence, the transaction growth is a key indicator of financial health. In the past, Panera Bread Company business model was based on capital investment through equity financing. The company’s long-term strategy was to invest in