PANERA BREAD COMPANY

CASE STUDY
PANERA BREAD COMPANY CASE STUDY ANALYSIS Jeremy Svagdis Columbia
College June 18, 2012

PANERA BREAD COMPANY

CASE STUDYHistory:

Panera Bread Company and its subsidiaries operate a national bakery-cafe concept with
1,541Company-owned and franchise-operated bakery-cafe locations in 42 states, the
District of Columbia,and Ontario, Canada, serving almost 6.5 million customers a week

(Panera Bread Company 2011 10-K).

Paneras
bakery-cafes are located in urban, suburban, strip mall, and regional mall locations.
Panerafeature
s
high quality, value priced food in a warm, inviting, and comfortable environment. With
ouridentity rooted in handcrafted artisan bread we bake every day, we are committed to
providing greattasting, quality food that peop
le can trust
(Panera Bread Company, 2011 10-K, 2012).
Panera
operate as three business segments: Company bakery-cafe operations,
franchiseoperations, and fresh dough and other product operations.

(Panera Bread Company, 2011 10-K, 2012).There are 740 Company-owned bakery-cafs, 801
franchise operated bakery-cafs, and 24 fresh doughfacilities (22 are company owned, and
2 are franchise operated) (Panera Bread Company, 2011 10-K,2012).

Total revenues in fiscal 2011 increased 18.1 percent to $1,822.0 million compared to
$1,542.5million in fiscal 2010.Net bakery-cafe sales in fiscal 2011 increased 20.6 percent
to $1,593.0 million compared to$1,321.2 million in fiscal 2010.Franchise royalties and fees
in fiscal 2011 increased 7.7 percent to $92.8 million compared to$86.2 million in fiscal
2010
(Panera Bread Company, 2011 10
-K, 2012).Identification of Resources:Through this recession, as many are wondering
where they are getting their next meal from,Panera Bread Company has expanded
operations, experienced double digit yearly earnings increases,and watched as their stock
price continues to rise. A startup more than twenty years ago, Panera BreadCompany has
amassed and refined their resources. Potentially their greatest resource, CEO Ronald
Shaich created Panera as place that could be an everyday oasis for those seeking higher
quality food, a
sweet treat, or maybe a smoothie. Panera offers a great variety of healthy, fresh
menu items. Panerahas done much to earn their corporate Goodwill and brand name
recognition. There is comprehensive
front and back house training of employees, whom they see as skilled providers of the
PanerasConcept Essence, and not merely cogs in mac
hine. Something unique, Panera gives healthcarebenefits to everyone who works 25+
hours a week, employee stock purchase plan, and competitive, ormany times, higher wages
than competitors. The well trained associates and owners in return maintainexcellent
quality control. The high quality of food, and excellent quality control had led to a
greatamount of Goodwill for the company, as well as brand name recognition. Much of the
advertising and

PANERA BREAD COMPANY

CASE STUDYmarketing for Panera is by word of mouth. Through traditional advertising
and word of mouthadvertising, Panera reaches their target audience. Their mix of
advertising mediums include television,radio, billboards, social networking, and in-store
sampling days (Panera Bread Company 2011 10-K).Capabilities:
Paneras healthy, value
-oriented menu provided customers with a variety of choices building on
Paneras baking expertise. Menu items were regularly reviewed and updated. Panera did
not use a test
kitchen. Instead, many of the menu offerings
had their start at the Research and Development teams
twice-yearly retreats to the Adirondacks, where team members took turns trying to out-
do each other.Many creations have come directly from these retreats to the bakery-
cafs. These tasty treats added to
Paneras product differentiation and aided in spurring on growth.
As Panera expanded operations, it used its cash to build new bakery-cafs that generated
a highROI, as Panera took advantage of the recessionary factors that were driving costs
down, while stillremaining focused on finding locations that would deliver high sales
volume. Panera was also able tonegotiate favorable terms on real estate leases, as well
as food supply contracts due to solid namerecognition and perceived stability of the Panera
Bread Company corporate brand.Core Competencies:Panera has developed and proven many
core competencies. From the beginning Panera has had thegoal to exceed customer
expectations. This starts with the selling of high quality mid-priced food.Ensuring that
Panera will always bake good bread are the regional fresh dough distribution centers,
thatdeliver the high quality dough for the bakery-cafs to bake. Panera will regularly

review and innovateour menu offerings to feature new taste profiles we believe our
customers crave
(Panera Bread
Company 2011 10-K).
We believe our menu innovation is one reason our value scores with customersremain so
strong. Zagats 2011 consumer
-generated National Restaurant Chains Survey for eating on-the-go rates us number
one among chain restaurants with fewer than 5,000 locations in the Best Saladand Best
Facilities categories while ranking us among the top five in the Best Value, Best Grilled
Chicken,Top Service, and Best Breakfast Sandwich categories
(Pa
nera Bread Company 2011 10-K).Management of corporate and franchise growth, as well a
deep sense of community
involvement and the desire to give back to community, further solidify Paneras placement
as something
different in today marketplace.
Paneras deep sense community can be seen as Panera gives away
leftover bread to homeless shelters and collects money for other charitable causes such
as theOperation Dough-
Nation program, and the opening of the Panera Cares bakery
-caf in Missouri, which
had no set prices; instead customers were asked to pay what they wanted (Wheelen 32
-4).