PANERA BREAD

COMPANY
Case Study #8

Company Overview

Au Bon Pain Company

Founded1978 in Boston, Massachusetts

Purchased Saint Louis Bread Company in 1993

Sold Au Bon Pain Division in 1999

Changed company name to Panera Bread

Company

Company Overview
The Panera Bread Companys name is
derived from the words:

Pan which means bread in Spanish and

Italian.

Era meaning period of time.

Mission Statement

A loaf of bread in every

arm

Strategy
To provide:
fresh, high quality, organic meals to
metropolitan citizens.

fast meals in a visually appealing,

comfortable environment.

meals with reduced additives or

preservatives.

Product Differentiation

Panera Bread uses a market niche

strategy based on differentiation;
backward vertical integration.

Panera internally produces fresh dough

for company-owned and franchised
bakery-cafes.

Product Differentiation

This competitive strategy focuses on a

small group and caters to the wants and
desires of that particular group of
customers

Panera Breads marketing strategy wants

these customers to feel as if they are
getting something better and more
wholesome for the same price as they
would from the companys competitors.

Demographics

White collar, upper-middle class

suburbanites and city dwellers.

Organics/healthy crowd.

Americans who are changing their eating

habits by moving away from high calorie,
or high cholesterol meals.

Atmosphere
Panera Warmth is:
Visually appealing dcor
comfortable furniture that focus on
catering to group settings.
Many locations contain fireplaces
Free Wi-Fi is available; which is an
attraction for business meetings and
college study groups.

Panera Bread Company

SWOT Analysis

Strengths

High Customer loyalty

Menu

options
Signature Caf designs
Inviting ambience
Operating systems
Unit location strategy

Distinctive Menu
Seasonal

menu changes
Demographical menu changes
Organic menu choices

Strengths

Extensive employee training program

Extensive demographic study for new site

locations

Free Wi-Fi access for customers

Competitive advantage from centralized

dough making operations.

Weaknesses

Low public awareness

Stringent franchising guidelines for new

entrepreneurs

Lack of foreign development

Market competition with specialty foods has a

low market niche

Lack of traditional dinner menu

Opportunities

Lower stringent franchising guidelines

for new entrepreneurs

Develop presence in foreign markets

Develop a better dinner menu

Threats

Lagging economy
McDonalds

Subway

Offers fresh sandwiches for less

Starbucks

Competition from the fast food industry

leader

Direct threat to Panera Warmth

COSI, a copy cat company

Panera Bread Company

Financial Analysis

Financial Analysis
Sales vs. Cost of sales

Financial Analysis

Gross
Profit

Curren
t
Ratio:

The ability to pay current liabilities using easily convertible

assets to cash. Should be 1.0, ratios of 2.0 or higher are better.

Paneras current ration is narrowly above the

1.0 ratio.

Financial Analysis
Working
capital
represents
a
companys
ability to
expand
without the
need to
raise more
equity or
borrow
money.

Rival Companies
Closest Rivals that also feature baked
goods, soups, salads, sandwiches, coffee,
and teas:

Atlanta Bread Company

Brueggers
Corner Bakery Caf
Jasons Deli
McAlisters Deli.

Locations
As of June 2009, there were more than:
1,340 Bakery-Cafs

565 Company-owned Locations

780 Franchised Locations

Strategic Problems
Lack of foreign development

Low market niche for specialty foods

Lack of a traditional dinner menu

Growth and Opportunities

Two main growth drivers:
Growing its base of locations

Growth in sales at existing

cafs

Growth and Opportunities

Currently opening a bakery-caf every

other day.

The organics/ healthy crowd or Market

niche group is growing at 15% - 20%.

Increase domestic locations by striving

for 4,000 United States locations.

Growth and Opportunities

Panera is currently opening restaurants in

Canada.

Develop international locations of Panera

Bread.

Management teams have created new menu

options, new breads and sandwiches, to
boost sales at already existing restaurants.