The Subway Story

Topics: Marketing, Fast food, Brand Pages: 16 (5528 words) Published: March 19, 2013
The subway story
Introduction of Subway restaurant
The Subway story started when Fred DeLuca, its cofounder and his family friend Dr. Peter Buck, worked on a business plan for a submarine sandwich shop. Dr. Buck gave a loan of $1000 for implementation of this plan. The first restaurant was opened in Bridgeport, Connecticut, in 1965. It did well in its first summer with the help of advertising slogans like "put a foot in your mouth.'' Emphasizing the foot-long sandwich, and "when you're hungry, make tracks for Subway." Buck suggested opening a second restaurant. "That way people will see us expanding and think that we're successful." DeLuca has changed the company's system of franchise development several times over the years and has kept the concept simple and relatively inexpensive for franchise buyers (Walker, J.R. 2007, p.27). Subway restaurants' is a registered trademark of Doctor's Associates Inc. (DAI). DAI owns the operational business concept and trademark of SUBWAY Restaurants. It is the franchisor and seeks to find entrepreneurs, or franchisees to partner with. The franchisee buys the right to operate the SUBWAY® franchise according to DAI's contract. DAI is a privately owned company, located in Milford, Connecticut. Here, at corporate headquarters, approximately 600 people work to keep SUBWAY® Restaurants the number one sandwich franchise in the world (http://www.subway.com/StudentGuide/, 2006). Strategic marketing environmental analysis with a special focus on competitive analysis. (Use at least two analytical tools) INTRODUCTION

According to Ennew, C. and Waite, N. (2007, p.69-72), one of the first stages in a marketing process is to understand the environment in which an organization operates. Marketing forces organizations to look outside and to develop an awareness and understanding of the environment in which they operate. There are several components in the overall marketing environment such as internal and external environment. Internal environment is the conditions with in the organization. External environment is the conditions outside the organization. Strengths and weaknesses are internal factors specific to the organization and opportunities and threat are factors which are present in the external environment and are independent of the organization. PEST analysis is concerned with political system, economy, society and technology. SWOT ANALYSIS

According to Catherine Kaputa (2006, p.21-22), SWOT Analysis is strengths, weaknesses, opportunities and threat. This analysis is an intensive look at the strengths and weakness in a real - world framework. According to McCarty, M. (2006) SWOT analysis of Subway is as following: Strengths

Size and number of subway stores.
Opening of new subway restaurants on unusual and non- traditional sites. Structured, brief and organized training is provided to the franchisee to assure rapid start -up and success. Partnership with American Heart Association.

Menu reflects the demand for fresh, healthy, tasty and fast food. Internationally recognized brand.
Customizable menu offerings.
Low cost of start up cost for franchisee.
Weaknesses
Some franchises are not happy.
No control over franchise saturation in given market areas.
Opportunities
Continue to grow Global business.
Improve franchisee relations.
Continue to revise and refresh menu offerings.
Threats
Disputes with franchise
Legal issues
Food contamination (spinach)
Interest costs
Recession
Competition with other food ventures
PEST ANALYSIS
PEST (political, economical, socio-cultural, technological) analysis (Curtis, G. and Cobham, D. 2005, p.54) is concerned with- Political/ legal: monopolies legislation, tax policy, employment law, environmental protection laws, regulations over international trade. Health and safety guidelines, labeling of GM foods, animal rights campaigns can affect business of Subway. Economical: inflation, money supply, economic growth trends, the business cycle-...

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