SG4001 – Report on the franchise Subway

SG4001 – Report on the franchise Subway.

Submission January 16th 2018 2000 words
U1700939
Introduction
This report will provide brief understand about the franchise Subway. Subway is a sandwich industry and I will be discussing the innovation and the SWOT analysis within the organisation. The company has a huge advantage that considers its environment before beginning the market process. I will be discussing the PESTEL analysis which included environmental factors and technical factors. The subway franchising concept, the market situation, the customers and the competitive situation will be analyzed and evaluated. In order to understand the market in which the franchise would operate, the size of the market, trends and macro environmental factors will be analyzed. The analyses will show that the fast food market is mature, and it still holds some growth potential. The overall competitive situation within the fast food industry is accessed, so furthermore two main competitors were McDonalds, Burger King. There are any fast food restaurants and Subway is not well represented and is due to the expected slowdown in market growth, the competition can be expected to increase.

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PEST And SWOT ANALYSIS ON FRANCHISE SUBWAY
Subway is a fast food restaurant market where they serve quick. It is a franchise where they sell fresh products e.g. sandwiches, subs, salad and wraps. Today, the SUBWAY® brand is the world’s largest submarine sandwich chain with more than 44,000 locations around the world. We’ve become the leading choice for people seeking quick, nutritious meal options that the whole family can enjoy. From the beginning, Fred has had a clear vision for the future of the SUBWAY® brand. As we continue to grow, we are guided by his passion for delighting customers by serving fresh, delicious, sandwiches made-to-order right in front of you. Subway offers customers with a wide selection of sandwiches which are called “subs”, the sandwiches are always freshly bakes, and customers can choose if they want their sandwiches toasted or non-toasted. There are two different sizes of sandwiches, a six inch(15cm) or a foot long(30cm). Subway also serves soft drinks along with sandwiches. Cookies, packet of crisp, coffee and chocolate can be offered as accompaniments. These sandwiches became more famous after “a Subway guy” Jared S. Fogle lost weight of 240 pounds (109 kilos) due to the Subway diet . Customers can decided what they want their sandwiches to include, the filling can be ordered double or some things can be left out. The Subway chain also has a wide range of dressing that can be chosen from, customers can choose between take-awake or enjoy the meal at the restaurant. They even have different king of age segments, through their existing product lines and product developments, specially improving the kids meal, Subway has improved the nutritional content of kids meal by replacing the carbonated drink with the vitamin juices and changing from high calorie cookie to juice roll up and attracting them with the cartoons like Dory. Birthdays and other occasions can be celebrated in Subway restaurants. On the menu, customers can find a catering part, which contains sub platters, giant subs and cookie platters. Marketers do targeting for segmented target. After segmenting they see which market to target.

The main goal for Subway is to be ranked the number one restaurant by consumers and in every market that Subway serves. Furthermore, Subway restaurants are owned and operated by local business people, who choose the place for their Subway restaurant. Since Subway is a franchise company, its franchisees will work hard to improve their service and food so they can achieve the objective. Also, Subway as a whole organization will work hard to improve its menus or advertise their sandwiches in order to achieve the objective. A development team will work with the new entrepreneur to provide assistance in opening and running a Subway restaurant within a new market. Subway will continuously provide assistance to make sure that the franchise gets all the basic information.

All new Subway® franchisees are required to attend a two-week training course in Cambridge ahead of opening their own stores. This intensive training programme provides you with an overview of operating a Subway® store and running a business, including classroom and in-store sessions. On completion of the training, franchisees are well-equipped to take the next steps in opening their own store. Similar training programmes are available for Subway® store managers as well. During the two week training, Subway provides the new franchise with the required information with the Subways franchise fee it is very low for a chain of this size. Shared values are the fundamental ideas of Subway, these can be identified by the following. Subway has an easy to run operation and can systems and information resources to assist the franchises. Subway teaches methods to control the business and help run efficiently. Shared values of Subway chain provides the tools and knowledge to allow entrepreneurs to successfully compete in the quick service restaurant. Subway provided the franchise with marketing knowledge as well as the necessary tools to operate the business efficiently. One of the strengths of Subway is that it knows the market and offers more healthy options than any other fast food chains for example McDonalds or Burger King.

The STP of Subway are Segment, Target group and Positioning. The segment of the franchise Subway is that people are willing to have a hygienic and delicious non conventional meal at the restaurant. The targeted group for Subway are children and youth from middle and upper class. The positioning is that it is a healthier, fresher alternative to conventional fast food. I will be discussing the SWOT analysis of the franchise Subway. The strengths within the organisation Subway is that it has a worldwide brand recognition and high brand loyalty. Subway has the colours white, green and yellow in their brand. They have arrows on the letter “S” and “Y”. The colour green refers to it that it is healthy. The colour yellow is referred to as neutral. They have a slogan as “eat fresh”, as they always have fresh ingredients to make their “subs”. It means they are committed to selling their healthy and nutritious products to all genders, dietary needs, all abilities to all ages. They are passionate about their products and stores, they also want to increase the number of stores they have by franchising so they can become more popular. A picture of Subways and slogan is below.

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Also the menu reflects demand for fresh, healthy and fast food. It Offers healthy subs sandwiches that are preferred and much better as compared to food items offered by other fast food restaurants. Subway offers fresh and healthy food in different types of subs, even some doctor advice to eat its nutrition food. Subway is very popular for lunch users customers. Subway is popular to serve its customers at very fast pace with friendly staff. A customised sub takes only one minute to make. Fast service helps to attract more customers in a business. Although Subway is a fast growing franchise chain in food business, but employees turnover is very high rate in the company. Subway is offering eat-in service to its customers, ignoring delivery segment. Subway is also offering only subs in market, other business are getting profits from different kind of food varieties. New entrance of sandwich making business is the biggest threat to Subway. It creates high level of competition in the market. Subway company’s price strategy is helping to maintain all prices according to competition. Competitive price also attract more customers in market and also contribution to create more profitability to business. The price of a Subway sub seems to art by location, and also by the type of sub you buy. With 6″ subs starting at £2.99 and good long subs as high as £6.69 in the UK, which are very affordable. Subway also offers salads from £3.99 to £5.49. The weaknesses are that it is not diverse and franchise management on a global level is a challenge, which means the service delivery is inconsistent from store to store, Subway has no influence on the service each restaurant offers the customer if the market is satisfied there is still a possibility that people want to open a restaurant. Some of their valuable costs would include the cost of meat and produce, as they would need more at certain times of the year and during certain promotions. Utilities can vary during different months of the year, as well as price fluctuations for oil, etc.This would be a variable cost. Labour is also a variable cost as employees come and go, more staff is needed for busy times of the year (Summer, holidays etc. ), increases in minimum wage and raises can all affect the cost. New promotions often affect supply and demand. For example , when the £5 foot long promotion began, it “was so popular, so fast that it caused inventory shortages throughout the company”. Even though they were making less money per sandwiches, the volume customers demanded of the items increased.
The UK and USA are currently undergoing political changes due to the recent elections in both countries and the Brexit process in the UK. This has led to some uncertainty about trade agreements and access to markets and it is likely that some changes will occur in these areas, but that this will take some time to take place. There have also been concerns regarding the exchange rate which has made the pound weaker, but this may provide an advantage to Subway. Planning regulations in the UK may also restrict where Subway can locate its franchises and in the USA, Subway can be found in traditional locations such as shopping centres, but are also in churches and schools. Political changes occur gradually through the process. The demographic segmentation is something related to the age group, gender, life cycle and income. And according to subway it majority of customer are concentrated on the age group in between 18 to 39 years mostly the people are either studying or working. We can observe the change in the products which are consumed by different age groups. So it is a strategy that involves the promotion of the item which meets the requirements of different age groups. Food safety and food quality are of paramount importance to us. Our suppliers must adhere to our Gold or Regional Standard Food Safety and Quality Policies, to ensure only the best products available make their way to SUBWAY® restaurants. People who practice healthy life style, love to have healthy food for instance , sandwiches in their daily life style so what can be better than a healthy Sub.
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Wherever SUBWAY restaurants are located, the core menu stays relatively the same with the exception of some culture. With more than 2400 location outside US and Canada, the Subway is fast leading international fast food restaurant. Subway offer mostly halal menu in  middle east countries, mostly vegetable without beef in India and more sauces in America. Organisations must be able to offer products and services that aim to complement and benefit people’s lifestyle and behaviour. If organisations do not respond to changes in society, they will lose market share and demand for their product or service.

Conclusion
Subway is the leader in selling sandwiches in the market, offering fresh and healthy food. The biggest advantages are the trademark strength connected to the global marketing and their sophisticated franchise system. The cost in terms of initial start up fee and ongoing costs, as well as the risk transfer can be seen as advantages of this system. Subway is competing in high competitive market with its strategic plans, As a result Subway is becoming famous for its healthy food as Subway Diet, they are making new strategies to expand its business and focus more on product strategy to create market competition. Subways fresh bread (product) is making itself strong position in global competition. Subway as a company does quite well. SUBWAY is over ruling the market with its strong marketing strategy and being the best example for segmentation, targeting and positioning and even making the life more simply by making people  eat fresh.

Reference
MBA Skool-Study.Learn.Share. (2017). Subway SWOT Analysis | USP & Competitors | BrandGuide | MBA Skool-Study.Learn.Share.. online Available at: https://www.mbaskool.com/brandguide/food-and-beverages/588-subway.html Accessed 10 Dec. 2017.

Anon, (2017). online Available at: http://www.subway.com/en-us/aboutus/history Accessed 10 Dec. 2017.

o how’s SUBWAY is segmenting, targeting and positioning its brand to become people first choice? (2017). Available at: https://mpk732t22016clusterb.wordpress.com/2016/08/08/so-hows-subway-is-segmenting-targeting-and-positioning-its-brand-to-become-people-first-choice/ (Accessed: 10 December 2017)
The Story Subway Doesn’t Want You to Know (2017). Available at: http://brandlauncher.com/Business-GPS/Article/story-subway-doesnt-want-you-know (Accessed: 15 December 2017).

Anon, (2017). online Available at: http://www.subway.com/en-gb/menunutrition/menu Accessed 10 Dec. 2017.

Subwaybusiness.blogspot.co.uk. (2017). Subway’s Objectives. online Available at: http://subwaybusiness.blogspot.co.uk/2013/09/subways-objectives.html Accessed 10 Dec. 2017.

Subwayfranchising.com. (2017). See our franchisee support network here at Subway Franchising UK. online Available at: https://subwayfranchising.com/en-gb/franchise/support-network Accessed 10 Dec. 2017.

Google.co.uk. (2017). subway – Google Search. online Available at: https://www.google.co.uk/search?q=subway&rlz=1C1CHBD_en-GBGB760GB760&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiMh9Gy0P_XAhXP3KQKHSdwCEAQ_AUICygC&biw=1366&bih=662#imgrc=nVN2dcZ4eQZVWM: Accessed 10 Dec. 2017.

Ltd, A. (2017) Subway PESTEL Analysis | Business Teacher, Businessteacher.org.uk. Available at: https://businessteacher.org.uk/pestel/subway.php (Accessed: 10 December 2017).

Marketing-Team-Project – Subway Report (2017). Available at: https://marketing-team-project.wikispaces.com/Subway+Report (Accessed: 10 December 2017).

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Appendix
REFLECTIVE ACCOUNT
SG4001 – Reflective essay about the guest speaker (Maintaining a business in a changing environment) Speech by Dr Stephanie Sandland
Submission January 16th 2018 1000 words
U1700939
I have been given the opportunity to attend one of the guest speaker lecture event. Attending this event allowed me to contribute towards writing my reflective essay. The guest speaker event I attended was a woman named by Dr Stephanie Sandland, who introduced her business on celebration cakes, wedding dresses and more general dressmaking. She also defined the vision and market sector, identified the changes that occurred in a 10 year period, considered how she needed to respond to the changed and also in order for her to retain in the market.

Dr Stephanie Sandland changed my future perspectives in a lot of ways, she gave me a wider knowledge and ideas for the future. She spoke about comparing with the competition, she explained how she had to change her techniques to challenge competitors and her blending techniques. ” Niche was to give her clients exactly what they want when there’s conflict within the wedding party”, her vision was to provide the perfect, elegant cakes. You would expect that from any client/customer wanting everything to go perfect and how they planned for their big day/occasions.

Dr Stephanie Sandland mentioned how the changing economic climate. From a business perspective, sweatshops are overwhelmingly lucrative since they capitalize on low-wage labor in developing countries and significantly reduce production costs. Many major clothing and footwear companies, for example, have been linked to sweatshops. Clothing cost less than the retail price of fabric as Stephanie said, overall mood of the global economy or of a regional economy, which captures the status of the stock market, the perception of the economy by consumers, and the availability of jobs and credit. Business decisions such as hiring, borrowing, lending, and investment in new initiatives are often strongly influenced by the overall economic climate.

The economic climate for her company was sweatshops because they have been a factor in the production of goods around the world for centuries but the globalisation of business has led increasing numbers of major corporations to take advantage of low cost sweatshops labour in developing countries. Recent examples of sweatshop conditions in the garment industry have caused a an international outcry by Labour leaders and government officials. This whole situation made the clothing cost less than retail price of fabric. Also it all depends on the target market on who it is targeting at and in her company she had a lot of people that were size 14 plus. The recessions in the 1990s Were she wasn’t making enough money and it made it difficult for her to hold on to the business, the disposable income reduced as well as the wedding cakes were considered elastic products which meant the sellers and buyers adjust their demand for the good product when the price changes.

Dr Stephanie Sandland spoke about the disadvantages that effected her business was the changes in law. 1990 Health and hygiene regulation, food safety which include the requirement on food businesses to place safe food on the market, for traceability of food, for presentation of food, for the withdrawal or recall of unsafe food placed on the market. Surfaces had to be impervious and required retiling with waterproof grout. It was important to have the food training as that is required no matter what, and no pets allowed. This was a big impact on her business because of the change in fashions and finding ways to keep up to date in maintaining a high quality brand. The implications of the change was very important when having your own business you are responsible to require and follow the rules and regulations to keep your company going.

She spoke how attending wedding fairs and events gave her a chance to promote her business by giving out sample and her business cards. This is a good market strategy as this shows you are interacting with customers that may be interested in the future. Dr Stephanie Sandland mentioned how she had wedding cake competitions which she enjoyed although you are competing with others it gave her a chance to learn and improve to become better. Most cake business owners are afraid of competition because, truth be told, most people have a selfish and greedy outlook in business. However, there are many ways that a competitor can help grow your business. It all boils down to your attitutude to competition. Having a pricing strategy was also important as she had to deliver the quality and keep costs down, also to develop strategy to minimise payment defaults. She monitored the prices of the competitions by interacting with customers. Technology has changed ways in marketing because of the internet, you have several different social medias like Instagram, Facebook etc. This allows you to put your business in the public more by creating your own business page for customers that can easily contact you via message. Dr Stephanie Sandland said how her business was profitable, she explained that the wedding dresses made more profit as there are more wedding seasons mostly every month and the love of weddings where every woman wants to look the best in the perfect wedding dress.

Overall the summary of the change, there was only an economic change because of the sweatshops and recession. Also the Technological change of techniques, Health and hygiene regulations. Other than that there wasn’t much of a change in her business.

Dr Stephanie Sandland has taught me a lot just by attending her event. I have learned many things towards the end of the speech, she has motivated me with many different ideas and thoughts from her business. This will be very useful for myself in the future when I plan my own business. One of the most important thing I have learned was to keep up to date with the rules and regulations and to always do your own research, this is because if you are up to date you will be more knowledgeable and everything will be carried out smoothly with no conflicts. I intend to implement the ideas I have learned to boost my future career by attending more guest speaker events and be involved in workshops.

References
Globalethicsnetwork.org. (2017). Two Faces of Economic Development: The Ethical Controversy Surrounding U.S.-Related Sweatshops in Developing Asian Countries. online Available at: http://www.globalethicsnetwork.org/profiles/blogs/two-faces-of-economic-development-the-ethical-controversy Accessed 10 Dec. 2017.

Food.gov.uk. (2017). General food law | Food Standards Agency. online Available at: https://www.food.gov.uk/enforcement/regulation/foodlaw Accessed 10 Dec. 2017.

Sweet Cake TV School. (2017). Competition Is Good. online Available at: https://www.sweetcaketvschool.com/blog/competition-is-good Accessed 10 Dec. 2017.

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