Running head: PANERA BREAD SWOT ANALYSIS
Panera Bread SWOT Analysis Prepared by: Brian McDonald, Ora Carson, Bree McCraw, and Ginger Terry MOD 440 Facilitator Dr. Berry Ziggler Week 4 July 31, 2012
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PANERA BREAD SWOT ANALYSIS
HISTORY The Panera Bread restaurant chain was founded by Ron Shaich and Louis Kane as Au Bon Pain Co. After acquiring the St. Louis Bread Company chain, the Panera Bread concept evolved. In 1999, the Au Bon Pain restaurants were sold, and the company put its primary focus on growing the Panera Bread restaurants. The St. Louis Bread Company restaurants continue to operate with the same Panera Bread concept and menu in the state of Missouri. There are currently 1,504 company-owned and franchise-operated bakery cafes (Panera Bread, 1999-2011). Panera Bread is considered to be in the restaurant industry, but they are in a different group as the others. Panera Bread has one of the highest stock market prices of all their competitors in the industry.
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PANERA BREAD SWOT ANALYSIS INTRODUCTION In every business there will come a time when the business needs to understand the things that will help a business and what will hurt that business. A business can determine their opportunities and the threats that are associated with that specific business. In determining these opportunities that a business has will help in directing the business’s future plans. The threats
that the business determines will help in making th at business aware of the potential problems that can plague the business and cause it not to succeed. Panera Bread is a company that is incorporated into the food industry. In being associated with this group of businesses, Panera Bread will be dealing with the government and many other agencies. One of the main agencies that they deal with is the U.S. Food and Drug Administration (FDA). Panera Bread acknowledges both their opportunities and threats, which in turn helps the business to become a success.
STRATEGY Panera Bread is the Apple of fast food. Panera continues with its pre-recession strategy of charging premium prices for its sandwiches and salads as if the y were iPhones. While other businesses might be suffering or worse; Panera Bread’s owner Ron Shaich has no plans on slowing down. He plans to add at least 80 locations to his ever growing company, all the while he’s upping Panera’s investment in its distribution system. The company's expansion seems
sharp actually. The value of commercial real estate has collapsed along with home p rices. Shaich says he's been able to bargain down lease rates by 20% to 25%. Plus, Panera can lock in these low terms for the next 20 years. Ron has also set a new bar by bringing in fresh produce daily opposed to the 12 to 18 day old produce that is typical for most restaurants. So far, selling high-
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PANERA BREAD SWOT ANALYSIS quality, high-priced fast food has worked just fine for Panera. Its same-store sales increased 3.6% in 2008 (see Exhibit 1), vs. declines at many other chains including Starbucks (see Exhibit 2). Its average check rose to $8.50, and each restaurant is now pulling in $2 million on average, putting Panera just behind McDonald's and double what a typical Arby's and KFC unit grosses. Main Issue
The main issue with Panera Bread is the economy. Many consumers because of the downturn in the economy have cut back on their dining out. This has cause a loss of customers at Panera Bread Cafes. If Panera Bread cannot get customers into the cafes then they do not sell their product and do not make a profit. Panera Bread prices for their product is higher than the average fast food product which determines if a customer will visit their store or one of their competitor’s. Panera Bread will need to determine new ways and promotions that will entice the
customers to visit their cafes. SWOT
Strengths
Weaknesses
Well-known brand name
Consumer preferences
High quality product
Decline in customer service
Strong financial condition
Narrow product line
Great strategy
Higher prices
Opportunities
Threats
Expansion
Economy
Culture
Competitors
Introduce new items
Government regulations
Expand product line
Price changes in product
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PANERA BREAD SWOT ANALYSIS Recommendations
Panera Bread needs to understand the customer’s needs and desires in the present
economy. The promotions that the company presents will help in getting the customers into the cafes and buying the product. Panera Bread strategy of introducing new products on a regular basis will help in convincing the consumers that Panera Bread is the choice that they want to make for that lunch or dinner trip out.
Conclusion
Panera Bread has shown that they know how to manage their business to delight of their investors and creditors. They have kept their ratios to the correct levels and maintained decent inventories for the company. Their stock has risen very high and seems to be going even higher. The future of this company seems very bright and will keep bringing in profit for the inv estors and security for its creditors. Panera Bread is trying to provide premium specialty bakery and café experience to urban workers and suburban dwellers. Panera is trying to be "better than the guys across the street." They are trying to make the experience of dining at Panera so attractive that customers would be willing to pass by the outlets of other fast-casual restaurants competitors to dine at a near-by Panera Bread. Every business needs to know what its strengths and weaknesses are in the industry. A business that knows its opportunities and threats will become a more stable company and make plans for its future. A business needs to use its strengths in making decisions. The business needs to understand its weaknesses and improve on them. A business that uses its strengths and manages its weaknesses will determine if that business will be a success.
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PANERA BREAD SWOT ANALYSIS Exhibit 1 Get Quarterly Data
Annual Income Statement (values in 000's)
Period Ending:
12/27/2011
12/28/2010
12/29/2009
12/30/2008
Total Revenue
$1,822,032
$1,542,489
$1,353,494
$1,298,853
Cost of Revenue
$1,185,969
$1,005,912
$904,419
$1,031,155
$636,063
$536,577
$449,075
$267,698
$329,320
$278,553
$238,565
$84,393
$6,585
$4,282
$2,451
$3,374
$79,899
$68,673
$67,162
$67,225
$220,259
$185,069
$140,897
$112,706
$466
($4,232)
($273)
($883)
$220,725
$180,837
$140,624
$110,314
$822
$675
$700
$1,606
$219,903
$180,162
$139,924
$108,708
$83,951
$68,563
$53,073
$41,272
$0
$267
($801)
($1,509)
Net Income-Cont. Operations
$135,952
$111,866
$86,050
$67,436
Net Income
$135,952
$111,866
$86,050
$67,436
Net Income Applicable to Common Shareholders
$135,952
$111,866
$86,050
$67,436
Gross Profit
Trend
Operating Expenses Sales, General and Admin. Non-Recurring Items Other Operating Items
Operating Income Add'l income/expense items Earnings Before Interest and Tax Interest Expense Earnings Before Tax Income Tax
Minority Interest
Taken from nasdaq.com
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PANERA BREAD SWOT ANALYSIS
Exhibit 2
Income Statement
GO
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Get Income Statement for:
View: Annual Data | Quarterly Data
All numbers in thousands
Oct 1, 2011 Oct 2, 2010 Sep 26, 2009
Period Ending Total Revenue
11,700,400
10,707,400
9,774,600
Cost of Revenue
4,949,300
4,458,600
4,324,900
Gross Profit
6,751,100
6,248,800
5,449,700
-
-
-
4,703,200
4,414,100
4,142,500
-
53,000
332,400
523,300
510,400
534,700
-
-
-
1,524,600
1,271,300
440,100
146,100
50,300
37,000
1,844,400
1,469,700
599,000
33,300
32,700
39,100
1,811,100
1,437,000
559,900
Income Tax Expense
563,100
488,700
168,400
Minority Interest
(2,300)
(2,700)
(700)
1,419,400
1,093,700
512,700
Operating Expenses Research Development Selling General and Administrative Non Recurring Others Total Operating Expenses Operating Income or Loss
Income from Continuing Operations Total Other Income/Expenses Net Earnings Before Interest And Taxes Interest Expense Income Before Tax
Net Income From Continuing Ops
Non-recurring Events Discontinued Operations
-
-
-
Extraordinary Items
-
-
-
Effect Of Accounting Changes
-
-
-
Other Items
-
-
-
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PANERA BREAD SWOT ANALYSIS Net Income
Preferred Stock And Other Adjustments Net Income Applicable To Common Shares
Taken from nasdaq.com
1,245,700
945,600
390,800
-
-
-
1,245,700
945,600
390,800
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PANERA BREAD SWOT ANALYSIS
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PANERA BREAD SWOT ANALYSIS References Admin. (2010, April). Managing Growth in Business. Nasdaq. (2012). Panera Bread Company Financials. Retrieved from Nasdaq Stock Market Panera Bread. (2012). Panera Bread Corporation. Retrieved from www.panerabread.com
