2 SWOT ANALYSIS OF PANERA Introduction This case study is about Panera Bread Company and its strategy it wishes

to employ to become the best brand name of fresh bread in the United States. Panera is known as a casual fast food restaurant, which means that they are a fast food provider but produce a higher quality product and offers a unique dining environment. Panera Bread’s use of a broad differentiation strategy has helped their profitability and growth and rivals have found it hard to compete with the competitiveness of Panera Bread. A SWOT analysis will reveal the competitive advantage Panera Bread has and why this company is in an attractive situation and what Panera Bread must do to strengthen its competitive advantage against rival chains.

Industry Analysis
Panera Bread Company operates in the very competitive restaurant industry. The fast food restaurant industry is extremely competitive. Panera Bread competes against all the large fast food companies such as McDonald’s, Burger King, and Wendy’s as well as cafes such as Starbucks and New World Restaurant Group Inc. Panera Bread Company is one of the younger companies in the industry, which means that room for growth is still abundant. McDonald’s has now moved into global markets and is focusing much of its marketing in those markets. Panera Bread differentiates itself from the normal fast food chain by offering a bakery and deli style sandwiches. Panera has found a distinctive niche in the restaurant industry enabling it to market to a growing costumer pool that wants better quality food.

Competitor Analysis The fast food restaurant industry is extremely competitive. Panera Bread competes against all the large fast food & casual dining companies such as McDonald’s, Burger King, and Wendy’s as well as cafes such as Starbucks, Einstein Bros and New World Restaurant Group Inc. Indirect competitors include fast food and sit down dining venues.

Environmental Analysis

With more dual-income families, consumers seek convenient dining solutions. More health information is available, making the average consumer more health conscious. “Chill out”( the time between breakfast and lunch and between lunch and dinner when customers visited its bakery-cafes to take a break from their daily activities), during the time most of the people visits bakery to stay away from the daily routine stress and tension and be relaxed looks for better ambience , on which Panera concentrates more and attracts customers.

SWOT ANALYSIS SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.

Let us discuss in brief about the SWOT Analysis of panera bread company based on the case study given STRENGTHS

An attractive and appealing menu (see case Exhibit 6)—Panera offers high quality food at a good price (the company delivers good value for the money); moreover, it has menu offerings for the more health/weight-conscious diner Bread-baking expertise (definitely a core competence)—artisan breads are Panera’s signature product

• • • •

Panera Bread is the nationwide leader in the bakery-café segment Panera Bread has high ratings in customer satisfaction studies A good brand name that management is continuing to strengthen The fresh dough operations and sales of fresh dough to franchised stores is a source of revenue and profit (see case Exhibit 1 showing that fresh dough cost of sales to franchisees run well below the revenues from fresh dough sales to franchisees) Initial success in catering—extends the company’s market reach Has attracted good franchisees—sales at franchised stores run a bit higher than those at company-owned stores (see case Exhibit 2) The financial strength to fund the company’s growth and expansion (see case Exhibit 1) without burdening the company’s balance sheet unduly with debt Along with the above strength the following would also add a credit to Panera has a product that is differentiated from their competition, because of their fresh dough delivered daily which is then baked onsite, also the Dining ambience which is called as “PANERA WARMTH” and hospitality in general we the study represents about the Panera’s Site selection and cafe environment which is an added advantage.


A less well-known brand name than some rivals (Applebee’s, Starbucks) Sales at franchised stores run a bit higher than those at company-owned stores—why is this occurring? Are franchisees better operators? They have a very weak dinner menu. They do not offer any substantial entrees. There are no “meat and potatoes” dishes on their menu. Applebee’s, a direct competitor, has twice as many locations as Panera. Panera has no presence in several US markets that are fertile ground for many restaurants. Some of these areas include New York City, Atlantic City, Washington DC, and a number of other large markets.


Open more outlets, both company-owned and franchised—there is untapped growth potential in a number of suburban markets as shown in case Exhibit 3 Open Panera Bread locations outside the U.S. as market opportunities in the U.S. begin to dry up Expanding their product line to include current trends such as organic foods, or dietary meals would expand their market as well on where they are focusing at present.


Rivals begin to imitate some of Panera’s menu offerings and/or dining ambience, thus stymieing to some extent Panera’s ability to clearly differentiate itself from rival chains New rival restaurant chains grab the attention of consumers and draw some patrons away from Panera—in other words, competition from other restaurant chains (either those in the fast-casual segment or other restaurant categories) becomes more intense Panera Bread begins to saturate the market with outlets, such that it becomes harder to find attractive locations for new stores and the company’s growth slows

Conclusion As discussed above the Panera’s SWOT it represents their strong strength and opportunities which reflects their means to achieve their objectives and at the same time it also shows their harmfulness (weakness &Threats) to achieve their objectives. Panera is doing very well in focusing its company’s goals and has been fast in grabbing onto opportunities. However, the weaknesses and threats mention above might just be the Achilles heel for Panera. With the state of the current economic system, Panera, and other restaurants need to realize that they are providing luxuries that people will soon be unable to afford. Panera Bread is a company that started solely as a bread company that has become a large variety eating establishment. They may soon have to make even more changes to stay afloat. By THIRUGNANAM.B