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Introduction
The strategic analysis can help the company to advance its strategic position by studying the product, market, or the organization itself. The choice of these tools depends mainly on the organization’s needs and goals, as well as on the issues experienced by the company. Given the goals and concerns existing with the Panera Bread Company, there are three main strategic tools that would be useful to the organization.
Five Forces Analysis
Porter’s Five Forces analysis offers an overview of the external factors affecting the company’s performance. Porter’s model states that the key external factors affecting the company’s position in the market are the threat of entry of new competitors, the threat of substitutes, the bargaining power of buyers, bargaining power of suppliers, and the overall industry rivalry (Dobbs, 2014). The analysis would be useful for Panera Bread, as it is a company operating in a highly competitive fast-food market; therefore, having a solid knowledge of the external threats and factors affecting success would be useful to inform the organization’s strategic planning.
7S Analysis
The 7S Analysis is used to analyze the organization itself by researching how the separate elements of the company’s structure align with its goals (Ravanfar, 2015). The 7S analysis emphasizes the importance of human resources as the key factor affecting organizational performance (Ravanfar, 2015). The particular factors influencing the work of human resources are the ‘Soft S’ factors, including shared values, style, skills, and staff. ‘Hard S’ values, on the other hand, are the structure, systems, and strategy. Therefore, the model would be beneficial to Panera Bread as it allows studying the internal factors affecting organizational performance. The 7S analysis would complement the results of the Five Forces analysis, producing a well-rounded overview of the company and its strategic position.
Financial Performance Analysis
Like any other business, Panera Bread seeks to grow and develop its profits. Thus, financial performance analysis is crucial to keep track of the company’s success and identify any weaknesses in the current strategic approach. One of the key tools for financial performance analysis for Panera Bread should be the net profit margin, which is the main ratio describing the profitability of the company (Dyer, Godfrey, Jensen, & Bryce, 2016). In particular, it would be useful to perform a comparative analysis, judging the company’s financial performance against its competitors’ figures (Dyer et al., 2016).
Irrelevant Tools
There are also a few tools that would not be useful in analyzing Panera Bread Company and its strategic position in the market. For instance, among the financial analysis tools, Times Interest Earned would not be relevant, as the company does not have debt payments that pose a significant concern. The TIE tool is more appropriate for SMEs looking to enhance their creditworthiness and ensure the ability to pay out existing debts.
A PEST analysis, which is a popular strategic analysis tool, would not be used when studying Panera Bread Company’s current position. A PEST analysis seeks to examine political, economic, social, and technological factors affecting the company’s operations. However, being an established business with a large network of franchises, Panera Bread already functions in accordance with the political and socioeconomic factors affecting the industry.
On the other hand, if the company was considering introducing a new line of business, a PEST analysis would be required to ensure that it has the capacity to do so. Thus, although this tool would not be relevant in the current situation, it might be useful for future development.
References
Dobbs, M. E. (2014). Guidelines for applying Porter’s five forces framework: A set of industry analysis templates. Competitiveness Review, 24(1), 32-45.
Dyer, J., Godfrey, P., Jensen, R., & Bryce, D. (2016). Strategic management: Concepts and tools for creating real world strategy. Hoboken, NJ: John Wiley & Sons.
Ravanfar , M. M. (2015). Analyzing organizational structure based on 7S model of Mckinsey. Global Journal of Management and Business Research, 15(10), 1-7.
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