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“Panera Bread Company in 2011: Pursuing growth in a difficult economy."| |
Module II|

|
“Panera Bread Company in 2011: Pursuing growth in a difficult economy."| |
Module II|

MGT 495

March 30, 2013
Nate Huffman 127203
MGT 495

March 30, 2013
Nate Huffman 127203

Table of Contents

What are the strategy elements of Panera Bread Company? How well do the pieces fit together? The two best indicators of how well a company’s strategy is working are whether the company is recording gains in financial strength and profitability and secondly whether the company’s competitive strength and market standing is improving. Other indicators of how well a company’s strategy is working include, trends in the company’s sales and earnings growth, trends in the company’s stock price, the company’s overall financial strength, the rate at which new customers are acquired, and finally changes in the company’s image and reputation with customers, (70). Management’s long-term objective and strategic intent was to make Panera Bread a nationally recognized brand name and to be the dominant restaurant operator in upscale, quick-service dining. Top management believed that success depended on “being better than the guys across the street” and making the experience of dining at Panera so attractive that customers would be willing to pass by the outlets of other fast-casual restaurant competitors to dine at a nearby Panera Bread bakery-café. Panera management’s blueprint for attracting and retaining customers was called Concept Essence. Concept Essence underpinned Panera’s strategy and embraced several themes that, taken together, acted to differentiate Panera from its competitors, (333). Panera Bread’s menu, store design and ambience, and unit location strategies enabled it to compete successfully in multiple segments of the restaurant business: breakfast, a.m. “chill” (when customers visited to take a break from morning hour activities), lunch, p.m. “chill” (when customers visited to take a break from afternoon activities), dinner, and take home, through both on-premise sales and off-premise catering, (333). 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. So far, working closely with franchisees to open new locations had been a key component of the company’s efforts to broaden its market penetration. Panera Bread had organized its business around company-owned bakery-cafe operations, franchise operations, and fresh dough operations; the fresh bread unit supplied dough and other products to all Panera Bread stores, both company-owned and franchised, (336). Trends in the company’s stock price according to the last 5 years reveal; Panera’s stock from July 2008 was just about $40. The value moved up and down between $15 dollars until about October 2010, where it began to gradually rise up to around $160 where it is today. There were up’s and down’s on the way, falling a little in October of 2011 but then moving back up. So how well do the pieces fit?

Ron Shaich, Chairman and Co-CEO, commented, “We believe that our consistent financial performance is the outgrowth of our long-term strategy of driving competitive advantage through the quality, craftsmanship, and innovation of our menu offerings; the comfort and warmth of our bakery-cafe environments; and the dedication and passion of our associates. We believe the continued investments we are making in all of these areas position Panera well for continued, long-term earnings growth in our targeted range of 15 to 20%. The company was the recipient of many honors and awards. It had scored the highest level of customer loyalty among quick-casual restaurants, according to research conducted by TNS Intersearch. For eight consecutive years, customers had rated Panera Bread tops among chain restaurants in Sandleman & Associates...
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