Bread

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Case # 5 Panera Bread Company

1. What is Panera Bread’s strategy? Which of the four generic competitive strategies discussed in Chapter 3 most closely fit the competitive approach that Panera Bread is taking? What specific kind of competitive advantage is Panera Bread trying to achieve?

Driving concept: to provide a premium specialty bakery and café experience to urban workers and suburban dwellers.

Generic: Broad differentiation strategy.

Competitive advantage: striving to build a competitive advantage based on the triple combination of Product, Environment, and Great Service (PEGS).

2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation?
Strengths:
• Attractive & appealing menu
• Bread-baking expertise (a core competence) – artisan breads are Panera’s signature product.
• Nationwide leader in the bakery-café segment
• High ratings in customer satisfaction studies
• Good brand name
• Fresh dough operations & sales to franchised stores
• Initial success in catering
• Good franchisees – higher sales in franchised stores compared to company-owned
• Financial strength of the company – able to grow without taking on too much debt

Weaknesses:
• A less well-known brand name than some rivals (Applebee’s, Starbucks)
• Sales at franchised stores higher than company-owned stores – Why?

External Threats
• Rivals begin to imitate menu offerings/or dining ambience – easy to copy?
• Competition from other chains
• Saturate the market – will it become harder to find attractive locations for new stores and slow company’s growth

Opportunities
• Open more outlets – untapped growth potential in a number of suburban markets (see Exhibit 3)
• International expansion

3. What is your appraisal of Panera Bread’s financial performance based on the data in case
Exhibits 1, 2 and 8? How…...

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