Panera Bread Company (2010):

Still Rising Fortunes?

Jinnat Ara Begum

Al Mashuk
Chowdhury
Md. Tarikul Islam

Simon Farooq
Suma Akhter

Competitors

I. Current Situation
Current performance

1999
Price of share
was $3.88
which rises to
$67.95

2000

2009

Revenues rose
from $350.8
million in 2000
to $1,353.5
million in 2009

$1,153.3 million
from companyowned bakery-caf
sales

Mission

A loaf of bread in
every arm

II. Corporate Governance

Board of Directors

Ronald M. Shaich

Larry J. Franklin

Fred K. Foulkes

III. External Environment

Political

Tax policy,
Employment laws
Environmental regulations
Tariffs
Political stability.

Economical

Interest rates
Exchange rates
Inflation rate

Cont
Social

Health consciousness
Population growth rate
Age distribution

Technological

Automation
Technology incentives

Cont
Industrial Environment:
Potential New Entrants: (Low)
Economies of scale are an advantage when fast-food
restaurants can achieve it but it is hard for companies to gain
economies of scale.

Cont
Bargaining Power of Customers: (High)
The consumers, people in America of fast casual restaurants
are the buyers.

Cont
Bargaining Power of Suppliers: (Low)
Large fast casual chains have thousands of suppliers to choose
from. Switching costs are low and it is done easily.

Cont
Threat of Substitutes: (High)
There are many different fast food chains in America. They
might offer slightly different things but they are trying to
compete with their substitutes by offering the customer food
and service.

Cont
Rivalry between Existing Firms: (High)
As stated above there are hundreds of fast casual restaurants in
America that enter the market and have a product to offer,
making it a competitive industry.

IV. Internal Environment

Organizational Activities Analysis

Marketing

Finance

48% increase in net income of

In 2010, Panera began modest
increases in advertising and
additional investments in its
marketing infrastructure

$25,845 million in 2010.

Sales increased 4.2% in fiscal
2009 to $1,153.3 million
compared to $1,106.3 million
in fiscal 2008.

Cont
Human Resources Management (HRM)

12,000 full-time associates of

Management Information System (MIS)

E-Learning to provide online

whom approximately 600 were

training for retail associates

employed in general or

and online baking instructions

administrative functions in

for its bakers.

2009

Wi-Fi.

Core Competency

Dining
ambience

Internal Factor Analysis Summary of

Dollar General
INTERNAL FACTORS

WEIGHT
0.0 1.00

RATING
1-5

WEIGHTE
D SCORE

COMMENTS

.20

4.00

0.80

High and customer

satisfaction lavel

.20

4.10

0.82

Good R&D efforts

W1.

Due to restricted criteria,

company cant able to open a
franchise easily.

.20

3.90

0.78

More focus on
development

W2. Doesnt provide fastest take

.10

3.05

0.31

Not focusing on a
specific strategy.

Strengths
S1. Strong

customer loyalty.

It has a cost advantage

over its rivals.
S2.

Weaknesses

away and pick up option.

Total

1.00

3.96

STRATEGIC FACTORS

SFAS Table)
WEIGHT
0.0 -1.0

RATING
1-5

WEIGHTED
SCORE

S1. Strong customer loyalty.

.20

4.20

0.84

S2. It has a cost advantage over its

.20

4.00

0.80

.20

3.90

0.78

.10

3.05

0.31

O1.

Further market
expansion can lead to
companys growth.

.25

3.90

0.98

O2.

Entering into
International market like
Europe and Asia.

.20

3.7

0.74

T1.

An immense demand of
vegetarian food.

.20

4.10

.82

High competition in the

market

.10

3.95

0.40

rivals.
W1. Due to restricted criteria,

company cant able to open a

franchise easily.
W2. Doesnt provide fastest take away

and pick up option.

T2.

SHORT
TERM

INTERMI
DIATE
TERM

LONG
TERM

Identification of strategic Issues

(Tows Matrix)
IFAS

Strength
Strong customer loyalty.
It has a cost advantage over
its rivals.

Weakness

SO Strategies
Expanding the business in
international market its
possible to make more cost
advantage.

WO Strategies
By expanding market growth
its possible to provide best
service on take away & pick
up option.

ST Strategies
Due to having strong loyal
customer its possible to
compete easily in the
competitive market.

WT Strategies

EFAS
Opportunity
Further market expansion can
lead to companys growth.
Entering into International

Due to restricted criteria,

company cant able to open a
franchise easily.
Doesnt provide fastest take away
and pick up option.

market like Europe and Asia.

Threats
An immense demand of
vegetarian food.
High competition in the market.

Due
to
decreasing
restricted criteria its
possible to do more
competition.

Strategic Alternatives & Recommendation

Alt-1: Expanding the business in international market its
possible to make more cost advantage.
Pros: Able to get more market share
Cons : Needed much time to finalize.

Alt-2: By expanding market growth its possible to provide

best service on take away & pick up option.
Pros: Able to get more valuable customer.
Cons : Much expertise people are needed.

Cont
Alt-3: Due to having strong loyal customer its possible to
compete easily in the competitive market.
Pros: Always have competitive advantage.
Cons : Value has to be given to them .

Alt-4: Due to decreasing restricted criteria its possible to do

more competition.
Pros: More customer will be acquired.
Cons : Might occur problem in internal environment.

Evaluation and Control

PBC management looks to be working very well, but in order
to compete effectively in this highly-competitive industry, this
management needs to define a clear strategy that addresses the
companys distinctive competence.