1. Panera Bread Company
Case Study #8

2. Company Overview Au Bon Pain Company
Founded1978 in Boston, Massachusetts
Purchased Saint Louis Bread Company in 1993
Sold Au Bon Pain Division in 1999
Changed company name to Panera Bread Company

3. Company Overview
The Panera Bread Company’s name is derived from the words:
“Pan” which means bread in Spanish and Italian.
“Era” meaning period of time.

4. “A loaf of bread in every arm”
Mission Statement
“A loaf of bread in every arm”

5. Strategy
To provide:
fresh, high quality, organic meals to metropolitan citizens.
fast meals in a visually appealing, comfortable environment.
meals with reduced additives or preservatives.

6. Product Differentiation
Panera Bread uses a market niche strategy based on differentiation; backward vertical integration.
Panera internally produces fresh dough for company-owned and franchised bakery-cafes.

7. Product Differentiation
This competitive strategy focuses on a small group and caters to the wants and desires of that particular group of customers
Panera Bread’s marketing strategy wants these customers to feel as if they are getting something better and more wholesome for the same price as they would from the company’s competitors.

8. Demographics
White collar, upper-middle class suburbanites and city dwellers.
Organics/healthy crowd.
Americans who are changing their eating habits by moving away from high calorie, or high cholesterol meals.

9. Atmosphere “Panera Warmth” is: Visually appealing décor
comfortable furniture that focus on catering to group settings.
Many locations contain fireplaces
Free Wi-Fi is available; which is an attraction for business meetings and college study groups.

10. Panera Bread Company
SWOT Analysis

11. Strengths High Customer loyalty Distinctive Menu Menu options
Signature Café designs
Inviting ambience
Operating systems
Unit location strategy
Distinctive Menu
Seasonal menu changes
Demographical menu changes
Organic menu choices

12. Strengths Extensive employee training program
Extensive demographic study for new site locations
Free Wi-Fi access for customers
Competitive advantage from centralized dough making operations.

13. Weaknesses Low public awareness
Stringent franchising guidelines for new entrepreneurs
Lack of foreign development
Market competition with “specialty foods” has a low market niche
Lack of “traditional” dinner menu

14. Opportunities
Lower stringent franchising guidelines for new entrepreneurs
Develop presence in foreign markets
Develop a better dinner menu

15. Threats Lagging economy McDonald’s Subway Starbucks
Competition from the fast food industry leader
Subway
Offers fresh sandwiches for less
Starbucks
Direct threat to “Panera Warmth”
COSI, a copy cat company

16. Panera Bread Company
Financial Analysis

17. Financial Analysis
Sales vs. Cost of sales

18. Financial Analysis
Gross
Profit

19. Panera’s current ration is narrowly above the 1.0 ratio.
The ability to pay current liabilities using easily convertible assets to cash. Should be 1.0, ratios of 2.0 or higher are better.
Panera’s current ration is narrowly above the 1.0 ratio.

20. Financial Analysis
Working capital represents a company’s ability to expand without the need to raise more equity or borrow money.

21. Rival Companies Atlanta Bread Company Bruegger’s Corner Bakery Café
Closest Rivals that also feature baked goods, soups, salads, sandwiches, coffee, and teas:
Atlanta Bread Company
Bruegger’s
Corner Bakery Café
Jason’s Deli
McAlister’s Deli.

22. Locations As of June 2009, there were more than: 1,340 Bakery-Cafés
565 Company-owned Locations
780 Franchised Locations

23. Strategic Problems Lack of foreign development
Low market niche for “specialty foods”
Lack of a “traditional” dinner menu

24. Growth and Opportunities
Two main growth drivers:
Growing its base of locations
Growth in sales at existing cafés

25. Growth and Opportunities
Currently opening a bakery-café every other day.
The organics/ healthy crowd or Market niche group is growing at 15% - 20%.
Increase domestic locations by striving for 4,000 United States locations.

26. Growth and Opportunities
Panera is currently opening restaurants in Canada.
Develop international locations of Panera Bread.
Management teams have created new menu options, new breads and sandwiches, to boost sales at already existing restaurants.