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Three of the threats to profitability?the threat of substitutes, the threat of new entrants, and rivalry among existing firms?are high. Despite these threats to industry profitability, one restaurant chain is moving forward in a very positive direction. St. Louis?based Panera Bread Company, a chain of specialty bakery-cafes, has grown from 602 company owned and franchised units in 2003 to over 877 today. In 2005 alone, its sales increased by 33.6% and its net income increased by 35.2%. So what's Panera's secret? How is it that this company flourishes while its industry as a whole is experiencing difficulty? As we'll see, Panera Bread's success can be explained in two words: positioning and execution...
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