Panera Bread Company

1. Panera Bread Company • By: Dan McLindon Kyle McDaniel Jeremy Smiley Tom Anderson Ray Moorman

2. Contents • The Key Question • Panera Bread Company History/Overview • External Environment (PEST) • Market Overview (Demand) • Industry Overview (Supply) • Competitive Landscape • Internal Analysis • SWOT Analysis • Recommendations

3. Key Question for Panera Bread • Is the plan of expansion and reliance on franchise partners the right strategy for Panera Bread to grow at the rate they want to?

4. Contents • The Key Question • Panera Bread Company History/Overview • External Environment (PEST) • Market Overview (Demand) • Industry Overview (Supply) • Competitive Landscape • Internal Analysis • SWOT Analysis • Recommendations

5. Panera Bread Company Overview

6. Panera Bread Company Overview • Strategic Intent • “Make great bread broadly available to consumers across the United States”

7. Contents • The Key Question • Panera Bread Company History/Overview • External Environment (PEST) • Market Overview (Demand) • Industry Overview (Supply) • Competitive Landscape • Internal Analysis • SWOT Analysis • Recommendations

8. Industry Overview (Supply) Porter’s five forces: Threat of substitute products HIGH Rivalry among existing competitors Bargaining power of buyers HIGH Bargaining power of suppliers LOW Threat of new entrants LOW

9. Porter’s Five Forces

10. Industry Overview (Supply)

11. Industry Overview (Supply)

12. Contents • The Key Question • Panera Bread Company History/Overview • External Environment (PEST) • Market Overview (Demand) • Industry Overview (Supply) • Competitive Landscape • Internal Analysis • SWOT Analysis • Recommendations

13. Internal Analysis – Core Competencies Red – Easy for competitors to develop Yellow – Possible for competitors to develop Green – Very difficult for competitors to develop

14. Internal Analysis – Growth Initiative • Expanding number of locations at a rapid pace • Heavy reliance on franchise partners • Targeting 17% increase per year in number of locations by 2010 • No international locations but considering expansion into Canada • Is this aggressive growth strategy prudent in the highly competitive and mature QSR industry?

15. Internal Analysis - Franchises • Strong franchise network with strict requirements to entry • New partners to commit to 15 cafes over 6 years • Average startup cost $1 million to $2.25 million per location ($15 million to $33.75 million for 15) • Majority of franchise partner financed by debt (highly leveraged) • Can Panera find enough new franchise partners to meet growth targets? • Strong franchise partners are critical to preserve consistent quality and atmosphere at Panera restaurants • Bad partner can damage strong customer loyalty Panera has built • Panera does have out as it can elect to buy out any franchisee for a predetermined price

16. Contents • The Key Question • Panera Bread Company History/Overview • External Environment (PEST) • Market Overview (Demand) • Industry Overview (Supply) • Competitive Landscape • Internal Analysis • SWOT Analysis • Recommendations

17. SWOT Analysis for Panera Bread

18. Contents • The Key Question • Panera Bread Company History/Overview • External Environment (PEST) • Market Overview (Demand) • Industry Overview (Supply) • Competitive Landscape • Internal Analysis • SWOT Analysis • Recommendations

19. Recommendations • Work with franchisees to acquire Corner Bakery Café??? (Franchisee locations are more profitable and provide higher ROI) • Expedite expansion in Canada or International (Europe)??