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?
2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation?
3. What is your appraisal of Panera Bread’s financial performance based on the data in case
Exhibits 1, 2 and 8? How well is the company doing financially? Use the financial ratios in
Table 5.1 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.
CAGR 2006 2005 2004 2003 2002
Franchise royalties &
Fresh dough sales to
Earnings Per Share
Net cash provided by
CAGR – Compound Average Growth Rate
2006 2005 2004 2003 2002
General & Administrative expenses
as a % of total revenue
Operating profit as a % of total
revenues (operating profit margin)
Net income as a % of stockholders’
4. What strategic issues and problems does Panera Bread management need to address?
5. What actions would you recommend that Panera Bread management take to strengthen
the company’s competitive position and business prospects vis-à-vis other restaurant chain rivals?