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Panera Bread Company Case Study #8.

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Presentation on theme: "Panera Bread Company Case Study #8."— Presentation transcript:

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.

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