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1. What are the chief elements of Panera Bread's strategy? 2. Perform a SWOT analysis for Panera Bread. Does the company has any core competencies


Case 5 Panera Bread Company in 2015-What to Do to Rejuvenate the EXHIBIT 1 d Consolidated Financial Data for Panera Bread, for per-share amounts) Iscome Statement Data 2009-2014 (in thousands. Bakery-café sales Franchise royalities and fees Fresh dough and other product sales to 2013 $2,108908 $1879.280 $1,592.951 $1,153.255 franchisees Total revenues 123,686 112.641 102.076 92.793 Bakery-café expenses: ,523 165163453 148,701 13628 121372 385,002 2.130,057 1,822.032 1,353,494 Food and paper products 470,38337599 95,996 1,830,109 1,695,4341 959.585 669,860 625,622 552,580 685,576 625,457 559,446 159,794 148816 130,793 other operating expenses Total bakery-café expenses 559,446484,014 Fesh dough and other product cost of sales to .595,434 , 256,029 115,290 3205% 498,848 1,285939 152,267 142,160 131006 116,267 79,899 nepreciation and amortization 100,229 67.162 83,169 General and administrative expenses 24,109 106,523 90.939 138.00 123335 117932 113.083 Total costs and expenses Operating profit Interest expense Other (income) expense, net Income taxes Less net income (loss) attributable to 52522.075246 1847,187 1501773 1212591 275,943 309,756 282,870 220,259 822 1208) 83951 1,824 1,053 3,175) 4,017) (1.208) 98,001 116,551 109.548 700 273 53,073 1,082 466 noncontrolling interest Net income to shareholders Earnings per share $179,293 $196,169 $173,448 $135,952 $86,050 $667 $6.85 $5.94 Basic 6.64 6.81 Weighted average shares outstanding 26,881 28,629 29,217 29,601 30,667 26,999 28,794 29,455 29,903 30,979 Diluted Balance Sheet Data Cash and cash equivalents Current assets Total assets Current ifabilities 196,493 $125,245 $297,141 $222,640 $246,400 406,384 302,716 478,842 353,119 322.084 1390,902 1,180,862 1,268,163 1,027,322 837.165 352,712 303,325277,540 238,334142,259 654,718177,645168,704372,246240,129 736,184 699,892 821,919655,076597,036 apilities Stock.nolders equity Cash Flow Data Net cash provided by operating activities Net cash used in investing activities Net cash (used in) provided by financing activities(52,514) (332006) Net (decrease) increase in cash and cash 335,079 $348,417 $289,456 $236,889 $214,904 211,317) (188,307) (195,741)(152,194)(49.219) 600 (19214) (91,354) 71,248 (171,896 74,501 6,659) 171,690 ce 2014 10 Kpotpp41-432013 10-Kreport pp. 41-43 20110 KRepor,pp.41-43: and 2010 10-x Rapot, po, 23-30-4

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in 2015-What to 5 o to Rejuvenate the Companys Gro ARTHUR A. THOMPSON The University of labama Panera Bread Company i E connect 2014 fell far short of the robust 19.9 In spring 2015, Panera Bread was widely regarded as the clear leader of the fast-casual segment e growth achieved during 2009 sales at bakery-cafés open at restaurant industry. Fast-casual restaurants Moreover newed as being a cut above traditional quick- year rose only I.I percent in 2014, compared restaurants such as McDonalds because percent in 2013 and 6.5 percent in 2012. The o 23 better food quality, limited table service, and, slow-down, coupled with higher operating es zed Panera Bread restaurants each week. million in 2014 and a drop in earnin enterprise in North America. earnings decline since 2007 bakery-cafés in operation in 45 states, the Dis- it was expecting 2015 sales gains of between 2.0 and ntaes, often wider and more upscale squeezed Paneras profitability, resulting e menu selection n average. 7.8 million custom-in net income from $196.2 million in 2013 to s from $6.85 in 2013 to $6.67 in 2014hare such specialty breads daily than There were 1,880 company-owned and franchised and Panera baked more other bakery-café Top management in February 2015 indicated the in oeration Canada trict of Columbia, and Ontario, Canada, under the 3.5 percent at Panera bakery-cafés open at least on Panera Bread, Saint Louis Bread Co., and Paradise year. But despite the addition of more store Bakery & Café names. In 2014, the company had agements profit forecast for 2015 was unin revenues of $4.5 billion, and average sales of almost be anywhere from flat to down mid- to high- The number of Panera Bread locations was up EPS growth rate of 15 to 20 percent annually diluted earnings per share in 2015 were projected digits, far below the companys targeted long corporate revenues of $2.5 billion, systemwide store $2.5 million per store location. from 1,027 units in 36 states at the end of 2006 but well short of the ambitious target the company set in 2006 to have 2,000 outlets in operation by the end of 2010. While the Great Recession of 2008-2009 Company Background In 1981, Louis Kane and Ron Shaich founded a had forced management to scale back Paneras bakery-café enterprise named Au Bon Pain C expansion plans, the company decided to reinstitute Units were opened in malls, shopping centers its rapid growth strategy by opening a net of 76 new airports along the east coast of the United company operated and franchised units in 2010, 88 new units in 2011, 111 new units in 2012, 125 the company prospered and became the do units in 2013, and 114 units in 2014. Plans called operator within the bakery-café category, in for opening 105 to 115 new company-operated and Au Bon Pain Co. purchased Saint Louis Bread and internationally throughout the 1980s and I franchised units in 2015 But despite the recent acceleration of store open- ings, the companys 6.0 percent revenue growth in pany, a chain of 20 bakery-cafés located in th Louis area. Ron Shaich and a team of Au Bon Copyright C 2015 by Arthur A . Thompson All rights reserved

  
 
 

 


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1. What are the chief elements of Panera Bread's strategy?

2. Perform a SWOT analysis for Panera Bread. Does the company has any core competencies or distinctive competencies?

3. Perform financial/performance analysis of the company based on the data in the case for 2009-2014 period.

4. What strategic issues or problems does Panera Bread management need to address? ? What are your recommendations to address those issues/problems to top management?
 

    


 

Case 5 Paners Bread Company in 2015-wu to Do to Rejuvenate the Company's Growth? EXHIBIT 1 Selected Consolidated Financial Data for Panera Bread, 2009-2014 (in thousands. except for per-share amounts) Income Statement Data Revenues Bakery-caf sales Franchise royalties and fees Fresh dough and other product sales to franchisees Total revenues Bakery-caf expenses: Food and paper products Labor Occupancy Other operating expenses Total bakery-caf expenses Fresh dough and other product cost of sales to franchisees Depreciation and amortization General and administrative expenses Pre-opening expenses Total costs and expenses Operating profit Interest expense Other (income) expense, net Income taxes Less net income (loss) attributable to noncontrolling interest Net income to shareholders Earnings per share Basic Diluted Weighted average shares outstanding Basic Diluted Balance Sheet Data Cash and cash equivalents Current assets Total assets Current abilities Total nilities Stockholders' equity Cash Flow Data Net cash provided by operating activities Net cash used in investing activities Net cash (used in) provided by financing activities Net (decrease) increase in cash and cash equivalents 2014 $2.230.370 123,686 175.339 2,529,195 609,060 685,575 159,794 314879 1.830,109 152.267 124,109 138,060 8,707 2.253.252 275,943 1,824 (3,175) 98,001 $179,293 $6.67 6.64 26,881 26,999 2013 $2,108,908 112641 163,453 2.385,002 625,622 625,457 148.816 295.539 1,695,434 2012 2011 $1.879.280 $1.592.951 102,076 92,793 142,160 106,523 123.335 7,794 2,075 246 309,756 1,053 (4,017) 116,551 148.201 2.130.057 28.629 28,794 552,500 550,446 130.793 256,029 216.237 1.498,848 1.285.939 177,645 736,184 699,892 131,006 90,939 117,932 8.462 1.847.187 282,870 1,082 (1,208) 109.548 136,288 1,822.032 $335,079 $348,417 (211,317) (188,307) (52,514) (332.006) 71,248 (171,896) $5.94 5.89 470,398 484,014 115,290 29,217 29,455 $196,493 $125,245 $297,141 406,384 478,842 302.716 1,180,862 1,268,163 1,390,902 352,712 303,325 277,540 654,718 168,704 821,919 $196,169 $173,448 $135,952 $6.85 6.81 116,267 79,899 113.083 6.585 1.601.773 220.259 $289,456 (195,741) (19,214) 2009 $1,153,255 78.367 74,501 822 (466) 83,951 121,872 1,353,494 $4.59 4.55 303 337,500 370,595 95.996 155.396 959.586 29,601 29,903 $222.640 353,119 1,027,322 238,334 372.246 655,076 100,229 67,162 83.169 2451 1.212.597 140,897 $236,889 (152.194) (91,354) (6,659) Source 2014 10 Kreport, pp. 41-43, 2013 10-K report, pp. 41-43: 2011 10-K Report, pp. 43-43 and 2010 10-k Report pp 29-30 46-48 700 273 53,073 801 $86,050 $2.81 2.78 30,667 30,979 $246,400 322.084 837,165 142.259 240,129 597,036 $214,904 (49,219) 6.005 171,690

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