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.
