Panera Bread Company Case Study

Panera Bread Company Case 32-1

Synopsis:

Panera Bread Company operates as a retail bakery/café restaurant. Panera Bread Company began as Au Bon Pain Company back in 1981. Originally, it was only operating on the east coast at that time. In 1993, Au Bon Pain Company purchased St. Louis Bread Company. Before this purchased, the St. Louis Company was comprised of 20 bakery/cafes in the St. Louis area. From 1993 to 1997, Au Bon Pain changed all their bakery/café names to Panera Bread. By 1999, Au Bon Pain sold all businesses except for Panera Bread Company.

Panera Bread Company has continues growth throughout their quarters. Because of this, they are on track to see the largest growth rate ever. Panera currently has 429 franchise operations and 173 company-owned bakery/cafes. By increasing their sales of franchises, Panera is growing in other areas as well. Panera sells franchise agreements 15 stores in 6 years. By having strict guidelines for their criteria in buying a franchise, Panera also has strict rules on the amount of capital needed to retain a franchise. What Panera depends on for their large growth, is their sales of franchises and increased revenues from the same store sales.

Panera Bread Company from the beginning has opened stores in 35 states. These stores are near malls, shopping centers, and urban areas. Panera Bread offers assortment of breads, sandwiches, salads, and pastries. Even though Panera Bread competes against other fast food chains, such as McDonalds and Burger King, Panera differentiation from its competitors comes from its café environment including a more upscale and healthy menu. Since restructuring of Panera Bread Company, this business is on the rise for greatness. The CEO and chairperson of Panera Bread Company is Ronald Shaich. Since Shaich has been the CEO, Panera's revenue has rose from $350.8 million in 2000 to $1353.5 million in 2009, making them the leaders in the "fast Casual" restaurant category.

Resources:

* Financial Capital

* Brand Name - Panera Bread Company

* Innovative ideas

* Management team

* Human capital

* Management Team

Capabilities:

* Training

* Marketing

* Strategic management

* Quality of products

* Price

* Location

* Environment

Core Competencies:

* Brand Name - Panera Bread Company

* Franchised owned restaurant

* Quality of products

* Operating system

* Supply chain

Finding of Fact #1: What strategic moves can boost the sales at company-owned bakery café - is this possible, bringing the levels to par or even compared to the annual and weekly sales achieved by their franchised-owned café?

First and more importantly, the answer is "YES." Evaluating exactly where the Company-owned café financials are, is the first step in achieving growth.

Recommendation:

By achieving this strategic move, the first thing is to conduct an exploratory research. This is where the necessary information gathered to understand why and how company-owned café numbers are lower than franchised-owned café. The initial analyzing of the annual financial statements will give a clear view from past to present. As of 2009, there is a .2% difference in their weekly average sales. This may not seem like much but in the business world, this is a big difference. As we move forward, in recognizing the challenge that is in front us. We can decipher what the next move will be.

By starting with leveraging the company-owned café, first need to scan the environment that fits the uniqueness of Panera Bread Company. This means location, square footage, and the competitive advantage the store will have, not to mention, differentiating themselves from other competitors. Even though there are 585 company-owned cafés, not all of these are in every state. By closely looking at what states are profitable and the ones that are not can help determine where we can add new business. Approximately, 15 states do not have company-owned café.

In addition, we need to turn are focus back on the company-owned cafés we currently own to see how we can improve business, lower operating cost, and effectively increase revenue, and find the right suppliers for our products. To improve the business, first thing is to take a survey from the customers already doing business with us. Have them tell us what their thoughts are and what they would like to see for their Panera Bread store. By gaining insight into the customer's point of view, this will improve the overall business. Another suggestion would be to create a focus group to gain insight in the overall experience they have. This will help gauge the constancy in each company-owned café, even though Panera Bread has plan-o-grams inside and out. The true focus will be on the customers' needs. By lowering the operating cost, we can gain ground to increasing our revenue. If we look at maybe, bargaining are leasing agreements and offering a lower percentage, we can add to our revenue. Nevertheless, by lowering our cost for product without losing its value can help improve are operating costs. By implementing all areas I have mentioned, I know this will be a great start in improving our numbers for company-owned café.

Finding of Fact #2: Company-owned café will boost sales by creating new menu items that will drive business in the evening hours. How is this possible for a company that generates most of their business in the morning and at lunchtime?

Recommendation:

When it comes to Panera Bread Company, we know what our customers' needs and wants are, ever since the very beginning we have always communicated with our customers. We have prided ourselves with the ability to continue to find new ways to improve. This attempt is no exception. When it comes to building the evening hour business, we have to look at every angle to make this happen.

First, we need to understand that offering a different menu at dinner will have to be considered. By doing this, we must consider what type of menu items will work for our