Analysis of Subways internal and external environments

Topics: Fast food, Subway, Fast Food Nation Pages: 8 (2256 words) Published: October 25, 2013
Introduction
This essay will analyse the organisation Subway’s internal and external environments and their impacts on this organisation. This will include a swot analysis on resources and capabilities which are a part of the internal environment and on customers, suppliers, competitors, pressure groups, economic, political, technological, natural environment and emerging trends in the external environment. “A SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the Threats you face” MindTools.com (2013). Internal environment

Resources:
1. The Workforce
Strengths – Subway restaurants operate out of over 36,000 locations in 99 different countries. Subway is an equal opportunity employer, where every employee can be assured that they will be treated with respect and not be discriminated or harassed for any reason. They continuously provide employees with training and encouragement through teamwork, against shared goals and benchmarks and to be accountable for their actions. Weaknesses – Many subway employees are younger generations and are particularly inexperienced in the workplace. This can be a weakness for subway as this younger group of employees have other priorities such as school/university which can make it difficult when creating the roster for shifts and being unskilled can cause delays in service and not properly organised meals going to the customers. Opportunities – Subway has the opportunity to train their unskilled employees in a way that suits them and is in line with the organisation’s goals. Threats – Subway’s direct competition offer similar workplace conditions and environments which can be a threat to Subway by these companies attracting higher skilled workers in the industry away from Subway.

2. Capital Availability
Strengths – As Subway is operated as franchises, the overall company has a large amount of capital coming in from the franchises. Subway (2013) states “The SUBWAY® chain's start up costs are exceptionally low for a franchise of its size and stature. Total investment will depend on many factors, including location, rent, outlet size and equipment”. Weaknesses – There are many economic conditions, such as unemployment that contribute to weaknesses concerning Subway’s capital. Combine these economic issues with poor marketing strategies and it can affect the capital dramatically. For example the new “$5 Combo Deal” that they are offering, has resulted in a decrease in sales, as the average customer is now spending less money per purchase. Opportunities – Start-up costs of the franchises is low compared to similar organisations, it makes Subway more appealing to potential owners, there for encouraging more people to purchase a Subway franchise which will increase the capital of the overall company. Threats – Economic issues such as the Global Financial Crisis, unemployment and inflation can cause a threat to subway from opening more stores, which in turn affects their available capital.

Capabilities:
1. Marketing
Strengths – "Eat Fresh, Live Green" is Subway’s commitment to making a positive impact in all that they do. This is very appealing to consumers, as Subway’s beliefs and values are in line with theirs. Subway restaurants are also navigating the world of online social media to bring their message closer to consumers. Subway is experienced in international marketing. Weaknesses – Subway restaurants lack the interior design and quality that would welcome everyone to stay and feel more comfortable than in the competitor’s restaurants Opportunities – Subway employs superior marketing techniques and promotional strategies to attract and grow their customer base. The most successful Subway’s promotional offer was to offer footlongs for only $5. Threats – Subway runs the risk of decreasing their client base if they fail to meet consumers’ wants and needs if continuous innovation and new...

References: MindTools.com, (2013). SWOT Analysis. Retrieved on 11 September 2013 from
http://www.mindtools.com/pages/article/newTMC_05.htm#sthash.86tx07Tn.dpuf

SUBWAY (2013). Corporate Opportunities. Retrieved on 13 September 2013 from
http://www.subway.com.au/info/franchise_information/corporate_opportunities/
Unknown Publisher, (2012). Evaluating the External Environment. Retrieved on 13
September 2013 from http://2012books.lardbucket.org/books/strategic-management-evaluation-and-execution/s07-evaluating-the-external-enviro.html
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