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Panera Bread Case Essay

806 words - 4 pages

Case # 5 Panera Bread Company

1. What is Panera Bread’s strategy? Which of the four generic competitive strategies discussed
in Chapter 3 most closely fit the competitive approach that Panera Bread is taking? What
specific kind of competitive advantage is Panera Bread trying to achieve?

Driving concept: to provide a premium specialty bakery and café experience to urban workers and suburban dwellers.

Generic: Broad differentiation strategy.

Competitive advantage: striving to build a competitive advantage based on the triple combination of Product, Environment, and Great Service (PEGS).

2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its ...view middle of the document...

1 of Chapter 5 as a guide in doing the calculations needed to arrive at an analysis based
answer to your assessment of Panera’s recent financial performance.

Strong CAGR in a number of important areas – total revenues, royalties, fresh dough sales, net income and EPS.

Declines in G & A expense a desirable trend – some erosion in operating profit margins bears watching (not a desirable trend). Declines in liquidity (as measured by current ratio and working capital numbers) and a fluctuating but still acceptable ROE also warrant attention.

Overall, the data indicate that Panera is growing quite rapidly and is performing well, although not spectacularly. While there are some areas of concern, the areas of weakness as of 2006 are from alarming.

CAGR 2006 2005 2004 2003 2002
Total Revenues | 30.9 | 828,971 | 640,422 | 362,121 | 265,933 | 212,645 |
Franchise royalties & fees | 21.8 | 61,531 | 54,309 | 44,449 | 36,245 | 27,892 |
Fresh dough sales to franchises | 24.8 | 101,299 | 86,544 | 72,569 | 61,524 | 41,688 |
Net Income | 28.9 | 58,849 | 52,183 | 38,430 | 30,669 | 21,300 |
Earnings Per Share | 26.879 | 1.84 | 1.65 | 1.25 | 1.00 | .71 |
Net cash provided by operating activities | 22.67 | 104,895 | 110,628 | 84,284 | 73,102 | 46,323 |
CAGR – Compound Average Growth Rate

2006 2005 2004 2003 2002
Current Ratio | 1.16 | 1.18 | 1.05 | 1.58 | 1.83 |
General & Administrative...

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