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Strategic Audit of Panera Bread Company Case 29 Strategic Management MGMT 436 Group 5.

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Presentation on theme: "Strategic Audit of Panera Bread Company Case 29 Strategic Management MGMT 436 Group 5."— Presentation transcript:

1 Strategic Audit of Panera Bread Company Case 29 Strategic Management MGMT 436 Group 5

2 Current Situation (John L.) A. Current Performance Revenues between 2000 and 2003 rose sharply due to new unit expansion but masked a slowing year-to-year growth rate. New strategies and initiatives must be taken in order to continue growth. Revenues rose from $350.8 million in 2000 to $977.1 million in 2003, fueled by new unit expansion In 2000, comparable sales and annualized unit volumes (AUVs) increased 9.1% and 12.0% respectively. In 2003, those same figures increased only 0.2% and 0.5% reflecting slowed growth.

3 Current Situation (John L.) B. Strategic Posture Mission Mission Statement "A Loaf of Bread in Every Arm" (www.panerabread.com/about/company).www.panerabread.com/about/company Objectives Provide the following fast casual food service qualities The casual atmosphere of coffee shops The quality food of sandwich shops The quick service of fast food chains Strategies Specialize in the following five consumer dining needs Breakfast Lunch Daytime "chill-out" Lunch in the evening Take-home bread

4 Strategic Managers (Travis) A.Board of Directors Ronald M. Shaich (only internal member) Larry J. Franklin Fred K. Foulkes Domenic Colasacco Thomas E. Lynch George E. Kane All 6 own class A stocks 4 of 6 directors were brought on between

5 Strategic Managers (Travis) B.Top Management Brought outside key positions in other companies like real estate, financial investments, other food chains, and even customer experience. Ages 38 to 51 helps with different generations of views. Several combined years of experience. Top management seems to be well rounded.

6 External Environment (J.W.) A.Natural Environment Climate, crops such as wheat, grain, sugar cane, fruits and vegetables are affected by adverse weather conditions such as droughts, hurricanes, tornadoes, and excessive rain resulting in increased ingredient costs driving up product costs negatively affecting company profits Energy costs, rising gas prices will affect transportation and shipping costs while increasing electrical charges will also negatively affect company profits.

7 External Environment (J.W.) Societal Environment Economic Double digit growth with fast casual restaurants matches company objective (o) Competition with other specialty restaurants as consumers move to eat out more (t) Technological Emerging technology Free Wi-Fi (o) Real time inventory tracking thru robust data network (o) Political-Legal Adhere to local government regulations, and taxes (t) Monitor all products for health and safety issues (t) Sociocultural Consumers are eating healthier (o)

8 External Environment (J.W.) B. Societal Environment STEEP CategoryISSUEThreat/OpportunityRanking EconomicReal Estate costsThreat6 Competition with other specialty foods and casual dining restaurantsThreat1 Double digit growth with fast casualOpportunity2 Expansion into foreign marketsOpportunity5 FranchisesOpportunity4 Joint Venture StoresOpportunity4 Expansion into other US locationsOpportunity3 TechnologicalWIFIOpportunity1 In-store info systemOpportunity2 Political-LegalNone SocioculturalMove to Healthy foodsOpportunity1

9 External FactorsWEIGHTRATINGWEIGHTED SCORECOMMENTS Opportunities Double digit growth with fast casual0.251 opened average 23 new stores each year Expansion into foreign markets0.0100No expansion in foreign markets Franchises opened average 83 new stores each year Joint Venture Stores no data Free WIFI Rated best in tech mags for free offering In-store info system accurate inventory tracker Consumer move to Healthy foods main product offering Threats Real Estate costs long term leases selective locations Competition with other specialty foods and casual dining restaurants hitting the mark with consumers litigation for product defects Quality product no negative outcomes at this time Franchise failures concern could have negative inpact on image and financial burden on buyback Food costs rise questionable variable factor Distribution costs rise questionable variable factor Total Scores13.86 EFAS Table (J.W.)

10 External Environment (Nick) C.Task Environment 1. North American market mature and global market maturing - consumers demand alternative to the typical fast food agenda as well as different type of dining. 2. Industry is expanding globally as North American firms continue to expand internationally 3. Restaurant continues to grow in pleasing the customer with more of an experience than typical fast food and consumer desire a different style food and dining 4. Rivalry High. Chipotle, Einstein Brothers, Starbucks are all major companies in competition as well as fast food chains and other fast casual chains. 5. Buyers Power Low. The menu and processes of creating the food is ever changing 6. Power of Other Stakeholders Medium. Only on member of the board was internal the rest were outside the company they received a onetime grant for stock options. 7. Distrubtors Power Low. Owned their own facilities for making all there fresh goods and has only three main suppliers 8. Threat of Substitutes Low. Due to fast casual dining experience. 9. Entry Barriers Low. New entrants unexpected due to dining experience.

11 Internal Environment (John T.) A.Corporate Structure Realized the quality of employees is critical to a successful and unique company. (S) Invested in training programs to ensure quality of its operations. (S) Provides employees with stock ownership opportunities. (S) Rewards well managed and successfully operated locations with bonuses for managers as well as ownership of minority interest in a bakery-cafe. (S)

12 Internal Environment (Shavera) B.Corporate Culture The essential ingredient: Panera Care. Warmth and caring are the fundamentals of Panera Bread culture. (S) Corporate culture is based on founder Ronald Shaichs’ commitment to doing the best bread in America; quality, tradition, specialization, leadership, caring for employees & family, customers, and the community. (S) Good employee relations with high retention rates. (S) One of the top ten fast food chains rated “excellent” for Quick Track studies according to Sandleman & Associates. (S) All 1,453 Company owned and franchise-operated bakery cafes in 40 states and Ontario, Canada adhere to Panera Bread Culture. (S)

13 IFAS Table Internal FactorsWeightRating Weighted ScoreComments Strengths Great Corporate Culture0.251Internal Integration and Team cohesiveness. High Quality Food & Performance Food prepared with only fresh ingredients. Friendly Sales Associates. Experienced Managers/Leadership Employee & customer driven. Participative & Achievement oriented Leadership. Good Employee Relations High rentention rates & employee satisfaction. Great benefits and career advancement opportunities. Value Added Services for Customers0.251Warm comfortable atmosphere, free WiFi & Newspapers. Total Scores14.46

14 Backup Slides for Natural Environment WASHINGTON, D.C.—September 29, 2003 Falling crop production resulting from extreme weather events, diseases and pest infestations will increasingly be fueled by global warming and create an uncertain future for U.S. agricultural production and the nation's food supplies, according to leading experts gathered here today at a Harvard Medical School Center for Health and the Global Environment briefing, made possible by the Civil Society Institute, the Energy Foundation and the National Environmental Trust. A news media event was followed by a congressional staff briefing sponsored by Sen. Harkin (D-IA), Sen. Brownback (R-KS), Sen. Bill Nelson (D-NE) and Sen. Lugar (R-IN).

15 WRS0801/WRS0801.pdf

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