Subway Restaurants: Business Analysis

Subway chain of restaurants is a fast-food enterprise from the US with 34166 restaurants in 96 different regions all over the world. The franchise chiefly focuses on selling and distributing sub sandwiches, personal pizzas, as well as salads with Doctor’s Associates as its franchisor (Subway, 2017). The overall value of the Subway brand was 7.1 US Billion dollars in May 2016. Yet, similar to other businesses in the franchise trade, Subway has its own issues researched in this paper alongside the company’s external and internal environments. Main General Environment Aspects Affecting the Subway Franchise. The financial sector has brought many changes into the Subway Franchise. The firm recorded an 8.76% rise in profits as of 16th January 2017 (Marketwatch, 2017). Subway offers qualified and potential investors; a right of operation and establishment, a business selling and preparing foot-long and specialty sandwiches, salads, and other food items at any location. Such financial funding immensely impacts on the company, especially, where there is an insufficient supply of cash to influence the activities of the business, proper assessing and supply approach to financial undertakings. The company offers potential Subway startups prerequisite to assess the marketplace they are planning to unveil their commerce (Marketwatch, 2017). This form of arrangement has helped the company build a reputation as a people_x0092_s business wherever the company is established, maintain its product, and connect with its customers.

The social segment that involves an alteration in demographics, cultural mix, and beliefs has influenced the high ranking of Subway (Marketwatch, 2017). Subway offers programs on tools for hire, finance, leased buildings and space accessible to every Subway franchisee in the US. The company can guarantee or loan cash to franchisees linked to any of its Subway store. The logic of how every person adds value to a greater whole as well as the numerous lives the company touches offers the company a general environment influence.

How Financing and the Social Segments Affect Subway and the Food Chain Industry

Subway is dedicated to constructing strong commercial relationships through its financing of people with great business ideas, serving customers and the neighborhoods (Subway, 2017). Much like what people do with their own families, financing of franchisees by Subway is an indication of the value the company invests in the richness of community cultures. This is in addition to the extent of such ideas arising from the diversity fostered in what the company is and what it does.

The company socially relies on the robust entrepreneurial passion and spirit existing all through the community and company to support, grow and shape the community and the business (Subway, 2017). Subway socially strives to generate opportunities for their franchisees, staff, and people in the societies the business operates. Subway continually challenges its staff and customers to prosper through collaboration, share benchmarks and goals besides being accountable for their actions (Subway, 2017). The company takes pronounced pride in their business on top of being committed to staying decent international citizens that encourage healthy, dynamic lifestyles as well transforming where they work and live around the globe.

The Forces of Competition that Affect Subway Franchise

Every chain of fast food, that is, McDonald’s, Wendy’s, Burger King, KFC, etc. are competitors of Subway_x0092_s chains (Subway, 2017). If compared to such contenders whose branches and franchise are extended widely, the subway has slight pushback that might as well be a huge drawback to the company_x0092_s business. But Subway_x0092_s negotiating Suppliers power has been significant to the enterprise. If providers rely on large volumes, these suppliers possess less power of bargaining, since a producer may threaten to amend amounts or even hurt profits of the vendors. Such will have a significant and positive impact on Subway, which the company analyst must put additional weight on to it.

The consumers_x0092_ power of bargaining is significant. Subway offers clients special customizations of the food varieties they want thus are less likely for their clients to adjust to other food producers with difficulty meeting demands. Consumer customization in a positive way affects the Subway Company. Such a qualitative feature leads to a reduction in expenditures.

What the Company Might Do to Improve Its Ability to Address Competition Forces Shortly

A suitable strategy for pricing is an added advantage to the business if it can realize repeated and loyal customers in all the outlets. Subway_x0092_s Franchisee fees are less compared to these competitors. The cost of starting a Subway is less (15000US dollars) in comparison to competitors (McDonald 750,000 US dollars) (Subway, 2017). Improving the organizational approach will help the Subway Franchise to implement fast and new technologies.

If exit barriers are little, weak companies are extra likely to vacate the market. Such will increase company profits for remaining companies like Subway. Small exit hurdles are therefore positive for the Subway Company. Though this deducts business value, such statements have a temporary negative bearing on group entity,

The External Threats Affecting Subway Franchise and the Available Opportunities

Threats

The fact that the firm is a chain business, any negative news on the Subway can have an undeviating impact on a franchisee as the trademark/brand will be affected in such a process (Hitt et al., 2012). When the brand value decreases, there is a loss of competitiveness on the franchisees_x0092_ part. Another threat is that franchisees are highly reliant on a franchisor since every franchisee is dependent on Subway_x0092_s processes systems besides relying on the company to care for promotion. There is excessive control in Subway_x0092_s hands that in such rough relations, in that, franchisees only have limited power to matters of strategy.

The other critical threat Subway faces are the leading competitors since they increase the company_x0092_s tussles to preserve their consumers. These competitors have equally initiated campaigns to entice more customers, thus, intimidating Subway’s marketplace portion. The world recession has threatened the Subway, steadily reducing customers_x0092_ purchasing power (Hitt et al., 2012).

The substitute (produce) offered is inferior. Inferior merchandise means a consumer is less probable to change from Subway to such other service or product. This replacement merchandise will impact a lasting negative bearing on Subway_x0092_s entity, which deducts from the value of the object.

Opportunities Available

The company can spend extra capital to expand its industry further into other global regions. Also by civilizing, the customer service satisfaction can increase as well as retaining loyal customers than before.

The company can utilize the opportunity on customer satisfaction by concentrating on building and maintaining customer_x0092_s loyalty. Possible strategies include establishing communications channels or rewarding loyalty such as discounts. By refurbishing its supply stations and beautifying them with railway and subway line diagrams of countries where the company operates, the company gives the consumers a better sense of membership and connection(than displaying US_x0092_ subway maps).

Subway has the central portion of consumers un-tapped. A prominent figure of the Muslims residing in the US is incapable of consuming Subway’s toasties since such products are not Halal. The company can start opening up chains of Halal to appeal to Muslim customers.

Significant Weaknesses and Strengths of Subway Franchise

i. Strengths

The Subway franchise has shaped itself into famous brand (Subway, 2017). . This reputation has assisted the business to thrive in competitive diet franchise markets. The company still has a strong customer base and market trustworthy despite older and stronger food franchise such as McDonald’s, KFC, and the Wendy_x0092_s. Subway_x0092_s large industries_x0092_ size allows the company to prosper short of stealing market-share from any other. Large business extent is helpful for Subway. Subway_x0092_s large Business size is an effortlessly secure qualitative aspect offering a difficult time to institutions competing to overcome. However, Subway_x0092_s large commerce size has a strong negative influence on the company, subtracted from the value of the product. Such statements have a temporary negative impression on a company, which deducts from business value.

The promotional and marketing strategies Subway franchise adopted have assisted in appealing for consumers_x0092_ trust (Subway, 2017). . For instance, more combo repasts must be presented at discount pricings during the non-peak hours to entice customers. The increase in Demand can be through emphasizing extra on issues of health and supporting foundations like the campaigns on obesity. Advertisement movements must be consistent as conceivable, changing solely to meet differences in culture of the diverse countries. This initiative helps the company to preserve a consistent image worldwide. The company should depend on subliminal marketing and also start online advertising.

Subway has consistently tried to exploit value addition and so customers have benefited from purchasing a sandwich from the company (Subway, 2017). The company has enduring offered made-to-order, fresh toasties prepared in the client’s presence as the consumer gives orders on what they want in their sandwich besides what to exclude regarding their preferences, health, and tastes. Such service model has afforded other franchise-value to Subway as consumers get a personalization sense in their snacks and thereby promoting repeated consumption. Subway offers the customers a selection of newly scorched bread and baked toasted bread that the consumers can select from for sandwiches they want. Subway has own manufacturing divisions and therefore able to give a diversity of foods.

ii. Weaknesses

The freedom the company has availed the franchisees in ascertaining their advertising campaigns are the main weaknesses of the Subway franchise. I consider it a weakness since such ends up in inconsistency and variation among the Subway franchises thus ending up in customer confusion. Because franchisees possess a convinced level on freedom of selection, taste and quality disparity vary from franchise to another ending up in consumer discontentment.

The liking strength of the consumers is similar across the different Subway cafeterias. Therefore, there is unreliable service and no profits_x0092_ assurance from the company_x0092_s branches in the various nations. The rest of the food stores offer good employment terms to their employees while Subway Company offers no inducements for its employees. Such actions have seen lawsuits and employment complaints rise and reducing of consumer satisfaction. A single store ruins the Subway company reputation and brand. Franchisors_x0092_ introducing dubious terms in the enterprise franchise agreement stores can help tackle customer service challenge and handling of employees.

The Strategy Subway Should Select to Maximum Its Strengths, and Fix Weakness

The company should maximize on use of technology. Because Subway is an international franchise, it has to maintain continuous contact with the company franchisees through an electronic transmission system for its sales updates from franchises to headquarters and the internet. Subway similarly owns high-tech cooking ovens / ranges used in production of its various food assortments, bread and supplementary ingredients. Online business is the trend in the present world where people are ordering food from their work places or homes. The company should venture into home delivering to maximize profits.

Subway should invest in Research and Development to find out its weak points. It should control the possessions they can control in such an optimistic way because it is the simple solutions that help the company endure in the industry. Research will help the company discover customer preferences, potential global markets and any other issues that may affect the company in the future.

Justification

Systems and real estate are changing. Therefore, Subway cannot fail with an appropriate checklist, that is, Research and Development. This is because the company and communities where it operates are subject to transformation and so company needs to constantly be updated, just like on present day social marketing means and avenues. Not being prepared for revolution cannot be a reason for the poor processes. Even those things totally out of control must certainly not possess an effect on such competence of the business.

Franchise_x0092_s Resources, Capabilities and Core Competencies

The company competencies and capabilities include the continued employee_x0092_ training that offers excellent consumer service. The diverse traditional store places illustrate company_x0092_s core proficiencies. Subway has gained customers_x0092_ trust by focusing on people eating fresh, that is, excellence and quality foods.

The subway marketing promotions have continuously succeeded in endorsing the brand as an excellent sandwich health producing business (Hitt et al., 2012). The most central feature of any brand is the logo that assists the company communicates to customers on what this brand is all about. The subway logo has helped the company deliver business objective of permitting the customers to know everything on healthy snacks. The green shade in its logo represents the environment, health, and nature-friendliness than its contenders. The logo_x0092_s white color represents cleanliness conveying that company_x0092_s sandwiches are free of impurities thus healthy to consumers. The Subway’s health campaign through doctors and promotion of Start! Hearts Walk, an American Heart Association has maintained a corporate social responsibility outlook for the company. Such indicates mission of Subway of availing its customers with healthy and fresh foods.

Conclusion

Subway is a recognized destination in the fast food eatery industry. The brand has grown a good label and is innovative to advance its products and services. However, the business needs to pay attention to quality and create foods that are healthy to individuals. Weak distribution systems mean their food is expensive to transport around thus not reaching the end consumer. Such financial expenditure in constructing a robust distribution system affects the company. If the present competitors possess better geographic sites, new competitors will possess a competition drawback.

_x000c_References

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases: competitiveness and globalization. Cengage Learning. Retrieved 28 January 2017 https://books.google.com/books?hl=en&lr=&id=qaIKAAAAQBAJ&oi=fnd&pg=PR2&dq=Hitt,+A.M.,+Ireland,+D.,+and+Hoskisoon,+R.+E.,+(2012).+Strategic+management:+Competitiveness+and+Globalization.&ots=Elvhxg-LAt&sig=Kix1tNYCpw2J9Dc6b43qv6uWgSU

Marketwatch,. (2017). Subway Finance & Investment Co. Ltd.. Marketwatch.com. Retrieved 28 January 2017, from http://www.marketwatch.com/investing/stock/511024

Subway,. (2017). Subway Company: About Us. Subway, Retrieved 28 January 2017, from http://www.subway.com/en-us/aboutus