PANERA BREAD
COMPANY
Case Study #8
Company Overview

Au Bon Pain Company
 Founded1978
 Purchased
1993
 Sold
in Boston, Massachusetts
Saint Louis Bread Company in
Au Bon Pain Division in 1999
 Changed
Company
company name to Panera Bread
Company Overview
The Panera Bread Company’s 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 Bread’s 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 company’s 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 décor
 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 Café designs
 Inviting ambience
 Operating systems
 Unit location strategy
 Distinctive
 Seasonal
Menu
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
McDonald’s
 Competition
from the fast food industry
leader

Subway
 Offers

Starbucks
 Direct

fresh sandwiches for less
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
Current
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.
Panera’s current ration is narrowly above the 1.0 ratio.
Financial Analysis
Working
capital
represents a
company’s
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
Bruegger’s
Corner Bakery Café
Jason’s Deli
McAlister’s Deli.
Locations
As of June 2009, there were more than:

1,340 Bakery-Cafés

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
cafés
Growth and Opportunities



Currently opening a bakery-café 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.