Panera Bread: A Case Study 1
Panera Bread’s strategy is “to provide a premium specialty bakery and café experience to urban workers and suburban dwellers.” This strategy is most closely aligned with a broad differentiation strategy, or being unique in ways that a broad range of consumers find appealing. Prior to taking the Panera concept nationwide, the owners performed cross-country market research and concluded that consumers could get excited about a quick, high quality dining experience. The concept is a mix between fast food and casual dining, or fast casual. By choosing this strategy, Panera is attempting to achieve competitive advantage in the unique offerings it provides, offerings that rivals don’t have and can’t afford to match. In this case, delicious handcrafted bread arriving fresh daily, served in an inviting atmosphere is the company’s competitive advantage and core competency.
Strengths - Repeat customers, learning curve, word-of-mouth, fresh, quality food, rapid market penetration, economies of scale, customer service, good atmosphere Weaknesses - leased land, off-site dough preparation and delivery, many untapped markets, no sustainable competitive advantage, unclear strategic direction, unfavorable financial trends Opportunities – catering, national focus on health, dinner crowd, global sales Threats – bad economy, high gas prices, highly competitive industry
Net profit margin Return on stockholder’s equity Debt to Equity Ratio Current Ratio 2006 .071 14.8% .365 1.16 2005 .081 16.5% .381 1.18 2004 .081 15.9% .345 1.05 2003 .084 15.8% .239 1.58 2002 .076 14% .215 1.83
Return on Sales (by business segment) 2006 Company stores 18.5% 2005 19.6% 2004 19.8% 2003 20.7% 2
Franchises Dough Combined
88.0% 9.9% 23.3%
87.7% 9.0% 24.5%
88.0% 6.7% 24.6%
88.7% 7.0% 25.8%
The franchise business segment is showing above average returns on sales. This...