A discussion of the strengths, weaknesses, opportunities and threats facing Subway, with its marketing strategies being examined as one of the chain’s primary strengths.
Introduction
What started as a single store in Connecticut in 1965 has grown into a multi-billion dollar organization with more than 17,000 locations in 72 countries around the world. Born out of a business partnership between 18-year-old Fred DeLuca and a family friend, Dr. Peter Buck, Subway began as an investment to help DeLuca earn enough money to attend college in hopes of fulfilling his dream to become a physician.
Strengths
Subway may not have been the first, but it is certainly the best-known subway sandwich chain in the United States. A key component to this success is undoubtedly the company’s name – one can’t help but associate Subway Sandwich Shop with a sub sandwich. But the company’s marketing strategies have propelled its growth to the number one market position in its segment. Subway currently has more stores in the United States than does McDonald’s, and that is a nearly unbelievable accomplishment.
The chain received more requests for franchises in 2001 than in any other year of its existence, beating out all other fast food franchise requests. In fact, Subway has been named the number one franchise opportunity by Entrepreneur magazine for the tenth consecutive year. Recent requests could be, in part, a response to 2000’s well-received “Eat Fresh” campaign, for which the company spent $75 million to associate fresh ingredients with Subway sandwiches in the minds of the public. The campaign involved a few changes in ingredient lists as well as sandwich production processes.
The Business plan on Subway Sandwich, Business Marketing
Subway targets consumers ranging from 18 – 45 Years old, where business workers are their main consumers. Subway has been targeting mostly foreigners when it was started in 2003. Where they targeted for 80% foreigners and 20% local consumers. This is because when it was first start, only foreigners know about the brand Subway. Subway aims to turn this around where they would like to target ...
Weaknesses
While Subway sandwiches are certainly popular, the company must be careful not to fall into the trap of believing that it must continually change its offerings in order to remain the market leader. Change is good in moderate amounts; smart executives, indeed, will carefully monitor consumer preferences in order to ensure company strategies are in line with them. However, too much change too soon can cause a company to lose favor with customers, as the reasons for a company’s popularity begin to be erased.
Subway has already exhibited signs of too much change, altering its menu multiple times in the last five years or so. Most recently, the company added a line of “Subway Selects,” sandwiches made with more premium ingredients, such as parmesan-oregano and honey wheat bread as well as new condiments including Southwest Spicy sauce and Asagio Caesar dressing.
Another downside to the addition of such elements is that doing so certainly increases overhead expenses, so Subway must be careful that the benefits of adding these new sandwiches outweighs the costs in terms of profit margin. If it costs too much to make the sandwich, it’s not worth selling. A side note is that if Subway continues to add ingredients, two things will happen – first, stores will need more storage space for those ingredients. Second, there will be increased risk of wasted ingredients due to spoilage.
Finally, Subway’s image as a sandwich shop where customers can have sandwiches made their way is threatened by concepts like “Subway Select.” Customers who want their sandwich ingredients and condiments chosen for them could just as easily dine at Arby’s or Wendy’s.
The Essay on Analysis of Subway Chains and their Creator Fred Deluca
Fred Deluca may not be known to the world, but his restaurant is. Today many people eat at the famous submarine sandwich shop called SUBWAY, now the second largest restaurant chain in the world. It offers a healthy alternative to fast-food. Today, there are more than 15,000 restaurants in 76 different countries. Fred Deluca made the very first SUBWAYÒ Restaurant sandwich in 1965, and, today, he ...
Opportunities
Subway is now capitalizing on the success of United Kingdom-based sandwich chain Pret A Manger and other similar restaurants by planning the opening of some 2,000 stores across Ireland and the U.K. by 2011. A natural next step, perhaps, would be expansion across Europe. Once the foundation is laid in the U.K. and Ireland, Subway will be able to build on its expected success there to launch its brand in new European markets – hopefully with the same success.
In recent years, Subway has successfully associated itself with a general movement toward healthier foods, taking advantage of consumers’ preference for low-fat meals and healthy ingredients by advocating its sandwiches as a means for weight loss and control.
At first glance, it may seem like a joke, but the “Subway diet” really does exist. Jared Fogle, a Subway sandwich fan (and a real person) lost 245 pounds on a diet of his own design – a 6-inch turkey sub for lunch and a 12-inch veggie sub for dinner, every day. The combination of utilizing Jared as a spokesperson and the “Eat Fresh” slogan positions Subway as an alternative to high-fat hamburgers that tastes good in addition to being good for you.
Threats
As with nearly any business organization, the greatest threat to Subway Sandwich Shop is its competitors. In this case, the biggest competitors are Blimpie’s, Quizno’s, and Jersey Mike’s. Jersey Mike’s could prove to be a menace for Subway in the near future, as the chain recently obtained $10 million in funding for a national expansion endeavor. The company also has plans in the works for expanding overseas. Jersey Mike distinguishes itself with a grueling eight-week training program for franchisees and corporate managers. Also, half the proceeds from the opening of each new store is donated to a local charity, a wise move that clearly positions Jersey Mike’s from day one as a committed member of the community.
Bibliography
Cavanaugh, Bonnie. “Jersey Mike’s Chases National Dream,” Nation’s Restaurant News. 14 February 2000.
Howard, Theresa. “Subway’s High Way,” Brand Week Online. 12 June 2000.
The Essay on The Constitution Virginia And New Jerseys Plans
In the late 1780s, prominent political leaders in the United States came to realize that the government created under the Articles of Confederation was ineffective and impractical and could not serve a nation in managing relationships among states nor handle foreign nations. The fear of creating a government that was too powerful was the basis for foundation of the Articles of Confederation. It ...
Subway Sandwich Shop website, available at www.subway.com.
Author Unavailable. “Subway to Success,” Agra Food News. 4 July 2002. Available online at www.findarticles.com.
