1. What is Panera Bread’s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Panera Bread is taking? What type of competitive advantage is Panera Bread trying to achieve?

Panera Bread is a company with unique and effective concept and strategy which has given them a competitive advantage over its competitors in the submarket industry. Panera Bread’s strategy includes providing specialty bakery and café experience to urban workers and suburban dwellers. They specialize in fresh baked bread that made with quality and detail, made to order sandwiches, custom roasted coffees and other café beverage. Panera Bread has distinctive style to its menu, café design, inviting ambience with the decoration of its café locations. Panera offers their customers the chance to come in the café to order breakfast, lunch, daytime and the “chill out”- time between the breakfast and lunch and between lunch and dinner. Panera Bread’s growth strategy was by opening both company-owned and franchised Panera Bread locations, the franchising has been a key competent of the company’s efforts to broaden it markets penetration.
In class, we discussed different generic competitive strategies that company employ. Panera Bread’s strategies can be categories under the Best-Cost Provider strategy. Panera Bread provide a fairly common café beverages around the country, but the have manage to offer their products at lower cost to it rivals and still gives customers more value for their money by incorporating good to excellent product attributes. Panera Bread tries to achieve a type of competitive advantage that is a lower cost then its rival with a market that targets a broad cross-section of buyers.

2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? Does the company have any core competencies or distinctive competencies?

Panera Bread’s SWOT:

Strength- Panera Bread is the leading bakery-café in the nation and currently working on how to successful internationally. It is recognized as the highest level of customer loyalty among quick-casual restaurants. The company is an award-winner from every market in nearly 36 states, (e.g. for its sourdough bread). Provides quality food and its net sales has been profitable for the company. Weakness – Panera Bread is the fifth in numbers of location in the U.S. Market of Restaurant Chain. Most of Panera Bread’s units are saturated around St. Louis. Opportunity – Still has a room to expand store location. They could create health consciences menu into its varieties of food. And there are very few director competitors in the market industry. Threats – Some competitors has deliveries services.

Panera Bread’s competitive advantage is a result of its successful strategies which has strengthens the company overall out come. Customers are loyal to Panera Bread because of their ability to provide fresh bakeries and the convenience to treat themselves to a delicious Panera Bread product. Panera’s lineup of bread varieties attracts customers and investors, some who purchase franchises. These investments and sales are made Panera a very profitable company.

3. What is your appraisal of Panera Breads’ financial performance based on the data in case Exhibits 1, 2 and 8? How well is the company doing financially? Use the financial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Panera’s recent financial performance.

Panera Bread has improved financially over the years of operation. In the period of this four, Exhibit 1 show ($ in millions): Total revenues has increase by $546,764, Net Income went from $21,300 in 2002 to $58,849 in 2006 and the EPS was more than double from 2002 to 2006. Exhibit 2 shows selected operating statistic of Panera Bread from 2000 to 2006. Revenues in franchised stores (in millions) increase from $199.4 in 2000 to $1245.5; this gives you an example to why investors contribute Panera Bread’s growth strategy. Exhibit 8 provides business segment information from 2003 to 2006. Segment revenues, segment operating profit, depreciation and amortization, capital expenditures, segment assets are all showing a 50% increase in all.

Current Ratio: 127,618 = 1.1643 109,610
This shows that Panera has the cash flow to pay current liabilities using its assets which can be converted to cash in the near team. Current ration is higher than 1 which is good.

4. Based on the information in case Exhibit 9, which rival restaurant chains appear to be Panera’s closest rivals?

Looking at Exhibit 9, Starbucks seems to be the only company that can be compared to Panera Bread. These two companies can be comparing in key menu categories, location and net sale. Starbuck appears to be the closest in rival to Panera Bread. Starbuck has 6790 more location than Panera Bread in the 2006. Starbuck’s revenue (2005) of $6.4 billion is surprise lower to Panera Bread’s revenues (2006) $511 billion are also higher. Aware of the year differentiation, it shows how Panera Bread has been able to exceed Starbuck with fewer locations nationwide. Starbuck is the closest rival in products that is more similar than other companies in Exhibit 9.

5. What strategic issues and problems does Panera Bread management need to address?