Business Strategy Panera Bread
Business Stratgery / Case: Panera Bread Company / Igor Maas / 02.15.2008
The main challenge is to determine how Panera Bread can continue to achieve high growth rates in the future. Panera Bread is operating in an extremely high competitive restaurant market which forces the company to improve and to grow steadily for staying profitable. The company’s mission statement of putting “a loaf of bread in every arm” is just underlying Panera’s commitment for growing. They are now in a good financial situation and facing growth rates of up to 20% per year in a niche market that has a great growth potential. In the next 7 years the fast-casual market is expected to grow by 500% in sales to a total of $30 billion.
Therefore I think that there are 3 alternatives which can be considered for the future. The first idea that came to my mind is to sell Panera or going join venture with one of the big players in the restaurant industry. Panera has an impressively high market value which is indicated by the goodwill estimation on the balance sheet. By getting together with a major franchising company like McDonalds or Burger King, Panera’s expansion could be supported with a much greater amount of money. The backside of this deal would be that Panera’s executives would lose their controlling power over the company’s operations and would allow the joined company to misuse Panera for own interests and goals. Considering these issues by getting together with another company opens up questions of the necessity of a joint venture which led me to the second alternative. The company should keep up with their strategy of a steady growth model and the production of high quality products. Panera was doing really good in the last couple of years and the fast casual market has a great undeveloped potential for the future. Nevertheless, Panera has to be aware of major franchisers competitors who have the power and willingness to compete with Panera for customers, market share and
The main challenge is to determine how Panera Bread can continue to achieve high growth rates in the future. Panera Bread is operating in an extremely high competitive restaurant market which forces the company to improve and to grow steadily for staying profitable. The company’s mission statement of putting “a loaf of bread in every arm” is just underlying Panera’s commitment for growing. They are now in a good financial situation and facing growth rates of up to 20% per year in a niche market that has a great growth potential. In the next 7 years the fast-casual market is expected to grow by 500% in sales to a total of $30 billion.
Therefore I think that there are 3 alternatives which can be considered for the future. The first idea that came to my mind is to sell Panera or going join venture with one of the big players in the restaurant industry. Panera has an impressively high market value which is indicated by the goodwill estimation on the balance sheet. By getting together with a major franchising company like McDonalds or Burger King, Panera’s expansion could be supported with a much greater amount of money. The backside of this deal would be that Panera’s executives would lose their controlling power over the company’s operations and would allow the joined company to misuse Panera for own interests and goals. Considering these issues by getting together with another company opens up questions of the necessity of a joint venture which led me to the second alternative. The company should keep up with their strategy of a steady growth model and the production of high quality products. Panera was doing really good in the last couple of years and the fast casual market has a great undeveloped potential for the future. Nevertheless, Panera has to be aware of major franchisers competitors who have the power and willingness to compete with Panera for customers, market share and