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 caf 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 situation?
Strengths:
•Attractive & appealing menu
•Bread-baking expertise (a core competence) – artisan breads are Panera’s signature
product.
•Nationwide leader in the bakery-caf segment
•High ratings in customer satisfaction studies
•Good brand name
•Fresh dough operations & sales to franchised stores
•Initial success in catering
•Good franchisees – higher sales in franchised stores compared to company-owned
•Financial strength of the company – able to grow without taking on too much debt
Weaknesses:
•A less well-known brand name than some rivals (Applebee’s, Starbucks)
•Sales at franchised stores higher than company-owned stores – Why?
External Threats
•Rivals begin to imitate menu offerings/or dining ambience – easy to copy?
•Competition from other chains
•Saturate the market – will it become harder to find attractive locations for new
stores and slow company’s growth
Opportunities
•Open more outlets – untapped growth potential in a number of suburban markets
(see Exhibit 3)
•International expansion
3. What is your appraisal of Panera Bread’s financial performance based on the data in
