Presentation on theme: "Strategic Audit of Panera Bread Company"— Presentation transcript:
1 Strategic Audit of Panera Bread Company Case 29Strategic Management MGMT 436Group 5
2 Current Situation (John L.) A. Current PerformanceRevenues 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 expansionIn 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 PostureMissionMission Statement "A Loaf of Bread in Every Arm" (www.panerabread.com/about/company).Objectives Provide the following fast casual food service qualitiesThe casual atmosphere of coffee shopsThe quality food of sandwich shopsThe quick service of fast food chainsStrategies Specialize in the following five consumer dining needsBreakfastLunchDaytime "chill-out"Lunch in the eveningTake-home bread
4 Strategic Managers (Travis) Board of DirectorsRonald M. Shaich (only internal member)Larry J. FranklinFred K. FoulkesDomenic ColasaccoThomas E. LynchGeorge E. KaneAll 6 own class A stocks4 of 6 directors were brought on between
5 Strategic Managers (Travis) Top ManagementBrought 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.) Natural EnvironmentClimate, 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 profitsEnergy 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 EnvironmentEconomicDouble digit growth with fast casual restaurants matches company objective (o)Competition with other specialty restaurants as consumers move to eat out more (t)TechnologicalEmerging technology Free Wi-Fi (o)Real time inventory tracking thru robust data network (o)Political-LegalAdhere to local government regulations, and taxes (t)Monitor all products for health and safety issues (t)SocioculturalConsumers are eating healthier (o)
8 External Environment (J.W.) B. Societal EnvironmentSTEEPCategoryISSUEThreat/OpportunityRankingEconomicReal Estate costsThreat6Competition with other specialty foods and casual dining restaurants1Double digit growth with fast casualOpportunity2Expansion into foreign markets5Franchises4Joint Venture StoresExpansion into other US locations3TechnologicalWIFIIn-store info systemPolitical-LegalNoneSocioculturalMove to Healthy foods
9 EFAS Table (J.W.) External Factors WEIGHT RATING WEIGHTED SCORE COMMENTSOpportunitiesDouble digit growth with fast casual0.251opened average 23 new stores each yearExpansion into foreign markets0.01No expansion in foreign marketsFranchises40.8opened average 83 new stores each yearJoint Venture Stores0.12no dataFree WIFI0.030.12Rated best in tech mags for free offeringIn-store info system0.05accurate inventory trackerConsumer move to Healthy foods0.020.08main product offeringThreatsReal Estate costslong term leases selective locationsCompetition with other specialty foods and casual dining restaurants0.4hitting the mark with consumerslitigation for product defects3Quality product no negative outcomes at this timeFranchise failures0.3concern could have negative inpact on image and financial burden on buybackFood costs risequestionable variable factorDistribution costs riseTotal Scores3.86
10 External Environment (Nick) Task Environment1. 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 internationally3. 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 dining4. 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 changing6. 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 suppliers8. 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.) Corporate StructureRealized 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) Corporate CultureThe 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 Factors Weight Rating Weighted Score Comments StrengthsGreat Corporate Culture0.251Internal Integration and Team cohesiveness.High Quality Food & Performance0.254.51.13Food prepared with only fresh ingredients. Friendly Sales Associates.Experienced Managers/Leadership0.153.50.53Employee & customer driven. Participative & Achievement oriented Leadership.Good Employee Relations40.8High rentention rates & employee satisfaction. Great benefits and career advancement opportunities.Value Added Services for CustomersWarm comfortable atmosphere, free WiFi & Newspapers.Total Scores4.46
14 Backup Slides for Natural Environment WASHINGTON, D.C.—September 29, 2003Falling crop production resulting from extreme weather events, diseases and pestinfestations will increasingly be fueled by global warming and create an uncertain futurefor U.S. agricultural production and the nation's food supplies, according to leadingexperts gathered here today at a Harvard Medical School Center for Health and theGlobal Environment briefing, made possible by the Civil Society Institute, the EnergyFoundation and the National Environmental Trust. A news media event was followed bya congressional staff briefing sponsored by Sen. Harkin (D-IA), Sen. Brownback (R-KS),Sen. Bill Nelson (D-NE) and Sen. Lugar (R-IN).