Presented By:Group No. 9ArjunAmrish Hiteshwar ChauhanKhemchand

Introduction• Type Public (NASDAQ: PNRA) • Industry Restaurants • Founded Kirkwood, Missouri (1981)• Headquarters Richmond Heights, Missouri, U.S.• Key people Ken Rosenthal, founder

Ronald M. Shaich, founder, chairman, and CEOLouis Kane, founder

• Products Quick casual/Bakery-café, including several varieties of bread, such as bagels and muffins, cold sandwiches, hot panini, salads, and soups

• Revenue US$1.30 Billion (▲ FY 2008)• Operating income US$113 Million (▲ FY 2008) • Net income US$67.4 Million (▲ FY 2008) • Total assets US$674 Million (▼ FY 2008)• Total equity US$495 Million (▲ FY 2008)• Employees 4,746 full time (December 2005)• Website www.panerabread.com

Q1. How has Panera Bread established a unique position in the restaurant industry? How has this unique position contributed to its success?

How Panera Bread established a unique position

• Mix specialty food• Offers

– A variety of artisan– Specialty breads, along with bagels, pastries and

baked goods• Provide an inviting neighborly atmosphere• Chill-Out Time

How has this unique position contributed to its success

• Grow from 369 company owned and franchised units to over 1362 today

• Known as the Nation’s bread expert • In 2005, Panera ranked 37th on Business Week's list of

"Hot Growth Companies", earning $38.6 million with a 42.9% increase in profits.

• In 2009, the restaurant review service Zagat named Panera one of the most popular restaurants for eating on the go. Panera was also rated #1 for Best Healthy Option, Best Salad, and Best Facilities, among restaurants with fewer than 5,000 locations

Q2. Analyze the restaurant industry using Porter’s five forces model. In what ways has Panera Bread successfully positioned itself against the forces that are suppressing the profitability of the restaurant industry as a whole?

7

Industry Analysis: Porter’s Model

Positioning Strategy of Restaurants

Casual DiningApplebee’s

Chili’s Red Lobster

Olive Garden

Fast CasualPanera BreadAtlanta Bread

Bruegger’s Cosi

Unfavorable Position for Everyone

Fast FoodMcDonald’sBurger King

Kentucky Fried ChickenTeco BellLow

High

Slow High

Food

Qua

lity

Speed of Service

First mover advantage of the changes in Restaurant Industry

1. People were increasingly looking for products that were “Special”

2. They didn’t want to give up the convenience of quick service

Q3. What barriers to entry has Panera Bread created for potential competitors? How significant are these barriers?

Barriers to entry for potential competitors

Barriers to entry:• Economies of Scale• Product Differentiation• Capital Requirements• Cost advantages independent of size• Access to Distribution Channels• Government Policy

Q4. What are Panera Bread’s primary sources of competitive advantage? In your judgment, are these sources of advantage sustainable? Why or why not?

Primary Sources of Competitive Advantage

• Industry Analysis • “Fast-Casual”• Positioning • Execution• Brand Equity