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Strategic Audit of Panera Bread Company. Case 29 Strategic Management MGMT 436 Group 5. Current Situation (John L.). A. Current Performance
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Strategic Audit of Panera Bread Company Case 29 Strategic Management MGMT 436 Group 5
Current Situation (John L.) A. Current Performance Revenues between 2000 and 2003 rose sharply due to new unit expansion but masked a slowing year-to-year growth rate. New strategies and initiatives must be taken in order to continue growth. • Revenues rose from $350.8 million in 2000 to $977.1 million in 2003, fueled by new unit expansion • In 2000, comparable sales and annualized unit volumes (AUVs) increased 9.1% and 12.0% respectively. In 2003, those same figures increased only 0.2% and 0.5% reflecting slowed growth.
Current Situation (John L.) B. Strategic Posture Mission • Mission Statement "A Loaf of Bread in Every Arm" (www.panerabread.com/about/company). ObjectivesProvide the following fast casual food service qualities • The casual atmosphere of coffee shops • The quality food of sandwich shops • The quick service of fast food chains StrategiesSpecialize in the following five consumer dining needs • Breakfast • Lunch • Daytime "chill-out" • Lunch in the evening • Take-home bread
Strategic Managers (Travis) • Board of Directors • Ronald M. Shaich (only internal member) • Larry J. Franklin • Fred K. Foulkes • Domenic Colasacco • Thomas E. Lynch • George E. Kane • All 6 own class A stocks • 4 of 6 directors were brought on between 2000-2003
Strategic Managers (Travis) • Top Management • Brought outside key positions in other companies like real estate, financial investments, other food chains, and even customer experience. • Ages 38 to 51 helps with different generations of views. • Several combined years of experience. • Top management seems to be well rounded.
External Environment (J.W.) • Natural Environment • Climate, crops such as wheat, grain, sugar cane, fruits and vegetables are affected by adverse weather conditions such as droughts, hurricanes, tornadoes, and excessive rain resulting in increased ingredient costs driving up product costs negatively affecting company profits • Energy costs, rising gas prices will affect transportation and shipping costs while increasing electrical charges will also negatively affect company profits.
External Environment (J.W.) • Societal Environment • Economic • Double digit growth with fast casual restaurants matches company objective (o) • Competition with other specialty restaurants as consumers move to eat out more (t) • Technological • Emerging technology Free Wi-Fi (o) • Real time inventory tracking thru robust data network (o) • Political-Legal • Adhere to local government regulations, and taxes (t) • Monitor all products for health and safety issues (t) • Sociocultural • Consumers are eating healthier (o)
External Environment (J.W.) B. Societal Environment
External Environment (Nick) • Task Environment • 1. North American market mature and global market maturing - consumers demand alternative to the typical fast food agenda as well as different type of dining. • 2. Industry is expanding globally as North American firms continue to expand internationally • 3. Restaurant continues to grow in pleasing the customer with more of an experience than typical fast food and consumer desire a different style food and dining • 4. Rivalry High. Chipotle, Einstein Brothers , Starbucks are all major companies in competition as well as fast food chains and other fast casual chains. • 5. Buyers Power Low. The menu and processes of creating the food is ever changing • 6. Power of Other Stakeholders Medium. Only on member of the board was internal the rest were outside the company they received a onetime grant for stock options. • 7. Distrubtors Power Low. Owned their own facilities for making all there fresh goods and has only three main suppliers • 8. Threat of Substitutes Low. Due to fast casual dining experience. • 9. Entry Barriers Low. New entrants unexpected due to dining experience.
Internal Environment (John T.) • Corporate Structure • Realized the quality of employees is critical to a successful and unique company. (S) • Invested in training programs to ensure quality of its operations. (S) • Provides employees with stock ownership opportunities. (S) • Rewards well managed and successfully operated locations with bonuses for managers as well as ownership of minority interest in a bakery-cafe. (S)
Internal Environment (Shavera) • Corporate Culture • The essential ingredient: Panera Care. Warmth and caring are the fundamentals of Panera Bread culture. (S) • Corporate culture is based on founder Ronald Shaichs’ commitment to doing the best bread in America; quality, tradition, specialization, leadership, caring for employees & family, customers, and the community. (S) • Good employee relations with high retention rates. (S) • One of the top ten fast food chains rated “excellent” for Quick Track studies according to Sandleman & Associates. (S) • All 1,453 Company owned and franchise-operated bakery cafes in 40 states and Ontario, Canada adhere to Panera Bread Culture. (S)
Backup Slides for Natural Environment • WASHINGTON, D.C.—September 29, 2003 • Falling crop production resulting from extreme weather events, diseases and pest • infestations will increasingly be fueled by global warming and create an uncertain future • for U.S. agricultural production and the nation's food supplies, according to leading • experts gathered here today at a Harvard Medical School Center for Health and the • Global Environment briefing, made possible by the Civil Society Institute, the Energy • Foundation and the National Environmental Trust. A news media event was followed by • a congressional staff briefing sponsored by Sen. Harkin (D-IA), Sen. Brownback (R-KS), • Sen. Bill Nelson (D-NE) and Sen. Lugar (R-IN).
