Describe Panera Bread Sources of Revenue and Sources of Profit at the Time of the Case?

1.Describe Panera Bread sources of revenue and sources of profit at the time of the case?

The sources of revenue are divided into three parts, franchise-operated revenue, company-operated revenue, fresh dough and other product operations at regional facilities. As we can see in the exhibit 7, company bakery-café operation covers the most revenue and profit. However, franchised cafes tended to be equal to or slightly more profitable than company-operated locations and produced a slightly higher return on equity investment than company-operated café.

2. Building upon the work the leadership executed prior to 2012, what are your key recommendations for growth in 2012 and for the next two years?  Describe the key aspects of your recommendations and include specific operating risks and mitigation plans.

According to the core strategy of Panera Bread, the recommendations for the growth of Panera Bread can be divided into two parts. Those two parts can be broken down into several sections.

The first one is to expand its market presence across North America. Panera Bread has its company-owned and franchised stores. The company should continue studying the surrounding trade and demographic information within the target area, giving franchise-operated store help about choosing location with its standard of location choosing. Opening new operations had been a key component of the company’s efforts to broaden its market penetration, so to enter the market in new areas, opening new company-owned cafes and selecting certificated franchise operation will still act a key role in expanding the market. However, it has risks that we couldn’t know. Panera Bread requires franchise to open more than 15 bakery-café in six years. We couldn’t know whether the franchise store will have a consistent good service. So, to prevent the service quality from dropping down, Panera should provide long-term training class for their staffs and sustain good service quality.

What’s more, to ensure the daily running new operations require a better supply-chain arrangement. For those product categories which originally have only one single supplier, Panera should find more suppliers for them to ensure the supply chain on those products won’t be in risk of interruption. Panera only spent 1 percent of system wide sales on direct media advertising. In 2012, they should increase overall advertising expenditures to launch new advertising campaign and increase audience exposure to ads it placed in various media. Their target market was urban workers and suburban dwellers. They should pay attention to their target customer and choose the right media.

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