Management - International Business and Accounting

Running Head: MANAGEMENT 0
INTERNATIONAL
BUSINESS AND
ACCOUNTING

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Table of Contents
Introduction................................................................................................................................2
Background of Panera Bread.................................................................................................2
Purpose of Study....................................................................................................................3
Outline....................................................................................................................................3
Historical Context......................................................................................................................3
Environmental Assessment........................................................................................................4
5 Forces Analysis...................................................................................................................5
Pestle Analysis.......................................................................................................................6
Mode of Entry............................................................................................................................8
Uppsala Model.......................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
The internal firms are accountable for one-third of global trade and with economic
globalisation, there is a increasing interdependence of locations and economic factors across
country areas. Collinson, Narula and Rugman (2017) define Multinational Enterprises (MNE)
a firm that coordinates and control in at least two nations while engaging in value added in
global corporate activities that has links in more than one nation and whose activities and
operations in various places are dynamically synchronised by one or more headquartered
businesses.
Background of Panera Bread
Panera was incorporated in 1980 as a single cookie store in Boston, Massachusetts and is now
developing as a prominent eatery brand. Presently, the brand has 2, 300 bakery cafes in
Canada and the US with near employees around 140, 000 (panerabread.com, 2019). The
restaurant is known to serve fresh-baked products, sandwiches, dishes, salad, soups and also
provides catering services. To expand its footprints across the country, the restaurant used
operated and franchise its restaurants. The 2018 U.S. Sales of the company stood at $5,760
(restaurantbusinessonline.com, 2019). This company is selected for the research as it is
having its presence in only two countries make it a multi-national enterprise and it was the
first national restaurant to disclose a comprehensive food policy.

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Purpose of Study
The purpose of this study is to enlighten author and users to gain significant knowledge about
emerging economy and trade barriers in era of globalisation and how various management
frameworks (such as PESTLE and 5 forces) can help business in reducing the environmental
threats and uncertainty by analysing the impact. Furthermore, it also presents information
about different modes of entry that Panera Bread can adopt for entry into other markets in
accordance with its resources and capabilities.
Outline
The next section of the report states about historical context that has changed with the
emerging economy, trade barriers, political impact and currency influence on a particular
country or firm. Furthermore, environment assessment is also been made in response to
significant management framework including PESTLE and 5 Forces. Ultimately, appropriate
mode of entry is recommended for Panera Bread in reference with Uppsala Model.
Historical Context
The economy growth of UK slowed at the end of 2018, however, it was projected to recover
at the start of 2019 but remained sluggish throughout the year. OBR 2020 GDP forecast at
1.4% and arrangements in the currency markets are an indicator of various stakeholders’
outlooks about a country economic opportunities (ig.ft.com, 2019). In consideration with UK
economy, the service industry can be said to the real powerhouse contributing nearly 80 % of
GDP. With the progression of globalisation and increasing global trade, it is inevitable and
challenging for a firm to do business in the international markets. Expansion planning needs
an in-depth knowledge of various factors including existing market channels, consumer
preference and buying behaviour, political and economic influence, cultural factors and
differences in cultures.
The economy is emerging with the consumer desire for convenience as well as vegan
products and restaurants on its platform. It is reported by Deliveroo that there is a 168%
upsurge in the number of vegan outlets and this growth is continuing to boost and supply in
beginning to match the enlarged demand from vegans and veggies (Booth, 2019). In addition,
British Customers are also predicted to spend 22 per cent more on takeaway deliveries by the

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close of 2020 (verdictfoodservice.com, 2019). In relation with trade barrier, the UK has no
substantial investment or trade barriers and no limitations on the transfer of capital. However,
following the UK decision to leave the EU, it will require to define a sovereign trade policy,
which will include the British Government to make decisions on overall levels of protection
and assistance for particular industries of the UK economy.
Political affairs in UK are attracting more than ordinary attention in the United States. With
voting of UK to leave the European Union in 2016, the regime has been regularly negotiating
the terms of the nation Exit with the UK economy decelerated in 2018 and more slowing is
anticipated in 2020 as of continuing Brexit-related ambiguity (santandertrade.com, 2019).
Meanwhile 2018, there is a decline in business investment whereas intake has been reserved
by sluggish real income growth and public debt also continued at a high level. In addition,
UK comparatively solid macroeconomic outcomes hide flaws and situation of disparity.
However, the large presence of American chain restaurants in the nation sourcing native food
products, as of demand for international cuisines, has led to the greater growth of market.
Ultimately, there is a scope of Panera Bread to expand into the market of UK as a consumer
foodservice and chained consumer foodservice.
Environmental Assessment
Panera Bread is a casual fast food chain and people in UK are now becoming more aware
than ever about their health various environmental areas becoming more veganism with rise
in flexitarians and individuals are becoming more concerned about the origin and treatment
of their food. The competition is also intense in the marketplace, including big companies
such as Subway, KFC, Dominos, Five Guys and so forth. To understand the impact of UK
environmental factors on Panera Brand, two management framework have been used i.e. 5
Forces Framework and PESTLE Analysis.

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5 Forces Analysis
Threat of New Entrants
Barrier to Market Entry Magnitude of Barrier
BREXIT HIGH
(Negotiation outcomes remain uncertain)
Who What How Likely
McDonald Offering diverse varieties of food and with a
survey in 2015, 57 percent of respondents said
that they wish to go for McDonald.
It will impact Panera
Bread
competiveness as
unlike McDonald,
the company do not
have kid’s meals in
their menu list.
KFC Opposite to Panera Bread, known for its delicious
Non-Veg food menu list.
It will divide the
customers of Panera
Bread into two
segments and
indirectly will
impact its revenue.
Supplier Power
Who What How Likely
Suppliers like
Americana, Glendale
Foods and BidFood.
Suppliers the premium quality wholesale fast
food bread in UK. Panera Bread is a big company
in the US and it can have a lot of bargaining
power over their suppliers in UK as they could
make up a very large proportion their revenue.
Low Influence of
Suppliers on Panera
Bread.
Forward Integration
No, there is not threat of forwarding integration of suppliers as Panera Bread supply chain is
largely responsible for its amazing success. Following the same pattern will help the
company to expand effectively in the UK marketplace.
Buyer Power
Who What How Likely
Age 8-45
Income level – low
and middle
Professionals,
students, children and
Bargaining power of all these consumers is high
while falling under different segmentation
criteria. As of presence of larger numbers of fast
food outlets in the UK, Panera Break must require
to pursue differentiation strategy.
High Influence

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employees
Backward Integration
There is no significant threat to the buyers to integrate backwards as of busy lifestyle and
timeline.
Substitute Products
Who What How Likely
Artisanal food
producers and
Local Bakeries
As there will be low switching cost available to
the buyers as well as availability of high
substitute in UK, Panera Bread requires to be
competitive in quality and customer satisfaction.
Medium influence
of substitute
products.
Market Rivalry
Who What How Likely
McDonald Diverse menu items and for all segments and
people. Requires Panera Bready to include more
varieties in their product line.
High
KFC Speciality in Non-Veg products. Requires Panera
Bready to bring customization in non-veg food
menu item.
Medium
Five Guys Customisable Hamburgers and Sandwiches High
Pestle Analysis
Element Factor Business Impact
Political
The element that has been identified
 Pressure of government to
encourage to eat healthier
as of increased in death
relating to obesity (64% of
UK adults are overweight or
obese in 2017). (Wolffowitz,
2019)
What is the business impact of this
factor
 It requires Panera Bread to
expand in the UK with
promotion if its vegan menu
items such as vegetable soup,
Fuji Apple Salad and Steel cut
Oatmeal.
Economic
 Less disposable income to
consumers with the present
economic climate (Real net
 People may be less likely to
spend money on fast food chains
and this may create risk for

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national disposable income
(NNDI per head reduced by
0.3% between Quarter 1
2017 and Quarter 1 2018 in
relation with the 0.5 percent
increase in GDP per head
over the same period
(gov.uk, 2018))
 Profitability may be
impacted due to exchange
rates.
Panera Bread.
 Panera Bread requires source
their materials from UK itself
rather than considering US or
Canada.
Sociological
 There is a social trend in UK
of consuming healthy and
having a positive lifestyle
and it pushing consumer
away from eating at fast
food chain.
 As per the research, 72% of
buyers in the UK are
purchasing healthy products
having fewer calories, salt,
sugar and fat (Wells, 2017).
 The fast paced lifestyle of
customers implies that the
service of casual fast food chain
must also watch that and be
quick too.
 It will force Panera Bread to
include more healthy options
making available to encourage a
more balanced diet.
Technological
 With increase in competition
and globalisation, fast food
chain can reach out to their
customers in more efficient
way with using of internet
and technology.
 Same like in UK, Panera Bread
required to setup its application
i.e. Panera Bread App for
Android or iPhone so as to fast
and easy ordering with just a few
taps.
Legal

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There are various Food Safety Act
(1990) and others Laws offers the
framework for all food legislations
UK.
 To thrive in the UK market,
Panera Bread required to abide
by these laws following fair
competition and food hygiene.
Environmenta
l
 UK fast food companies now
require to monitor the
amount of waste they
dispose where businesses in
fast food chain are now
turning to recyclable
packaging. (Example,
McDonald's pledged for
100% of its restaurants
around the world to recycle
packaging by 2025 (bbc.com,
2018))
 It will stimulate Panera Bread to
be competitive and sustainable
in the market with opting of
environmental favour practices
just like the fast food chain
established inthe UK.
Mode of Entry
According the Teece (2014), the term “market entry mode” states diverse arrangements
recognised by a certain organisation that allow the transfer of human resource, products,
management and technology and other resources into an international national. For Panera
Bread, the best mode of entry will be investing in Greenfield projects around the globe.
Benito, Petersen and Welch (2015) states Greenfield as a way where new facilities are setup
in order to enter into a foreign market while having better control over all aspects of the
business. After Brexit, the UK economy is being dispersed and at this time, this entry mode
will help Panera Bread to have better control over brand, staff and financing.
Merger and acquisition will not be beneficial for Panera Brand as most of the fast food chain
in UK are come from US already and have attained respective market share and standings.
Furthermore, acquisition cannot be possible for the brand as Panera Bread have not gained
huge capital or reserve while having market operations in US and Canada. Similar, due to

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Brexit, there are significant changes in laws and policies related to joint venture and this
would develop complexities for the Panera Bread to effectively expand in the market of UK.
As Panera Bread pursue to achieve economy of scale with its own business in the other
market, strategic alliance is no longer a valid option as there is no need to work upon mutual
beneficial project while creating a separate business entity.
Uppsala Model
Market Knowledge
Market Commitment
Market Knowledge
Market Commitment
And SO ON.
Leads to
Leads to
More
Leads to
More
It requires Panera Bread to
analyse culture and
characteristics of consumer
firm of UK.
Here, Panera Bread requires
to choose the size of
investment in marketing and
human resource. Though
before it, uncertainty effect
needs to be examined UK
Brexit impact, Food safety
laws and so on.

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Conclusion
In the lime light of above discussion, Panera Bread can expand in the UK market through
Greenfield market entry mode. There are various fluctuations encompassing UK industry
forces as well as macro-environmental factors. In order to gain competitive edge in the
marketplace, Panera Bread required to pursue differentiation strategy while offering varieties
of causal fast food products distinct from McDonald, KFC and other established chain in the
United Kingdom. There are also various economical and legal barriers while expanding into
the market, however, through proper assessment and evaluation, Panera Bread can effectively
be gain competitive edge in the industry.

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References
bbc.com. (2018) McDonald's aims for fully recycled packaging by 2025 [ONLINE] Available
from: https://www.bbc.com/news/business-42704291 [Accessed 08/01/2020].
Benito, G.R., Petersen, B. and Welch, L.S., 2015. Towards more realistic conceptualisations
of foreign operation modes. In International Business Strategy (pp. 246-265). UK:
Routledge.
Booth, R. (2019) Vegan food becomes UK’s fastest growing takeaway [ONLINE] Available
from: https://www.theguardian.com/food/2019/aug/28/vegan-food-becomes-uk-fastest-
growing-takeaway/ [Accessed 08/01/2020].
Collinson, S., Narula, R. and Rugman, A.M. (2017) International business. United Kingdom:
Pearson.
gov.uk. (2018) Economic well-being, UK: January to March 2018 [ONLINE] Available
from:
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/
incomeandwealth/bulletins/economicwellbeing/januarytomarch2018 [Accessed 08/01/2020].
ig.ft.com. (2019) The UK economy at a glance [ONLINE] Available from:
https://ig.ft.com/sites/numbers/economies/uk/ [Accessed 08/01/2020].
panerabread.com. (2019) Our History [ONLINE] Available from:
https://www.panerabread.com/en-us/company/about-panera/our-history.html [Accessed
08/01/2020].
restaurantbusinessonline.com. (2019) Panera Bread [ONLINE] Available from:
https://www.restaurantbusinessonline.com/top-500-chains-2019/panera-bread [Accessed
08/01/2020].
santandertrade.com. (2019) UNITED KINGDOM: ECONOMIC AND POLITICAL OUTLINE
[ONLINE] Available from: https://santandertrade.com/en/portal/analyse-markets/united-
kingdom/economic-political-outline [Accessed 08/01/2020].
Teece, D.J., 2014. A dynamic capabilities-based entrepreneurial theory of the multinational
enterprise. Journal of International Business Studies, 45(1), pp.8-37.

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verdictfoodservice.com. (2019) Order up: the technology trends powering takeaways in 2019
[ONLINE] Available from: https://www.verdictfoodservice.com/features/takeaway-trends-
2019/ [Accessed 08/01/2020].
Wells, L. (2017) UK shoppers increasingly buying healthy food, finds report [ONLINE]
Available from: https://www.talkingretail.com/news/industry-news/uk-shoppers-increasingly-
buying-healthy-food-finds-report-03-10-2017/ [Accessed 08/01/2020].
Wolffowitz, E. (2019) Health Statistics [ONLINE] Available from:
https://www.finder.com/uk/health-statistics [Accessed 08/01/2020].