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Subway is a privately owned American fast food restaurant franchise, which mainly sells sandwiches and salads. Subway is one of the world's fastest growing franchises and has around 45,000 stores in over 100 countries as of June 2017. There are more than half the stores in the United States. It is the biggest single brand chain of restaurants and the world's largest restaurant operator. The international headquarters of Subway are in Milford, Connecticut, with five regional centres that support international operations of the company.
The regional offices for European franchises are located in Amsterdam (Netherlands), the locations in Australia and New Zealand are supported by Brisbane (Australia), the offices in Beirut (Lebanon) and Singapore in Asia, and the Latin American support centre in Miami (Peterson,2016)
Subway was a long-standing food chain. With the wide range of sandwiches and the innovation that sandwiches bring to the world, Subway has made its market value worldwide. It has become an international business in the food chain.
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Subway maintain the quality of your food products by adjusting the right policies at the right time. They are popular among people who are very well aware of health, because Subway offers them a wide range of fresh sandwiches, unlike other junk foods on the market.
Fred DeLuca and Dr. Dwindle Buck opened the first Subway eatery in the city of Bridgeport, Connecticut, USA, in the mid year of 1965. The organisation was later joined for the sake of Doctor's Associates Inc. The Subway establishment is the biggest eatery network in North America and is ready to end up the biggest eatery network on the planet.
The Subway establishment framework puts an emphasis on making extraordinary sandwiches. Truth be told, it is great to the point, that numerous Subway clients have moved toward becoming establishment proprietors basically in light of the fact that they have confidence in the item. This essay will examine the PESTEL analysis and the SWOT analysis for subway's organisation (Franchising, nd)
The UK and USA are at present experiencing political changes because of the ongoing decisions in the two nations and the Brexit procedure in the UK. This has prompted some vulnerability about exchange assertions and access to business sectors and all things considered, a few changes will happen in these zones, yet that this will set aside some opportunity to occur. There have additionally been concerns with respect to the conversion scale which has made the pound more fragile, yet this may give favourable position to Subway. Arranging directions in the UK may likewise limit where Subway can find its establishments and in the USA, Subway can be found in conventional areas, for example, strip malls, but on the other hand are in houses of worship and schools (subway,2017)
The main economic factor affecting almost all businesses is the GDP of the State in which the business units are located. For example, Europe with a high GDP has more subway food chains than any other third world country. These factors directly affected the success and formulation of Subway's business policies. These economic factors are also the driving force of the Subway resource management team.
In addition, support from major suppliers is also one of the key economic factors affecting Subway in many ways. The recession (started in 2007) in the United States has affected companies in the United Kingdom, the United States and many other countries and Subway has not been immune from it. Things have changed over the years, however. Subway saw an increase in revenue due to increases in disposable revenue in certain countries. There are other economic factors that affect the restaurant, for example. Unemployment, rates of tax and minimum wage (David, 2016)
Of many in this section, we will take into account two important social factors. First of all, let's look at the lifestyles of people in the United Kingdom, United State of America and the Europe in general. Many people work part-time or full-time and often do not cook at home. As a result, they rely on restaurant food. This way of life is great from the point of view of revenue generation for Subway. Secondly, in certain countries, Subway must abide by religious rules. For example, it must supply Halal meat in the majority of Muslim countries. Although no pressure exists for governments, Subway offers Halal food in many restaurants in the United Kingdom, United State of America and Europe (Subway, 2017)
Burger King introduces an application that enables customers to order menus in advance and later pick up food. This is a very powerful tool that increases customer convenience and reduces the time it takes to bring a burger when the customer orders in advance. The news provides a survey result that people responded that they were going to Burger King for the convenience of the application. This could be a threat to Subway for now, as Burger King could take some customers away. However, since the application of Burger King is not really at a very advanced stage, Subway can later try to produce a more efficient and attractive application in order to attract new and old customers (blogspot.com, nd)
The environmental factors include the changing environmental trend of global standards. The steps taken by the world to combat pollution and promote activities such as recycling have had a direct impact on Subway's business strategies (Haseeb, 2017) Other environmental factors include initiatives taken by food chains to promote awareness of health and other good standards for saving food.
In a nutshell, Subway expands its business worldwide. In the third world countries as well as in the developed countries, the number of units set up by Subway has increased. In order to maintain the quality standards and compete with the market, Subway must develop certain practical strategies bearing in mind the analysis carried out by the above factors. These above factors must be seen as the basic factors in order to bring innovation into line with the changing global trends in the food chain business (Haseeb, 2017)
The metro must comply with the rules of the country wherever it operates. The main areas affected by law are packaging, food hygiene, food quality and nutritional values. Different legal systems, however, place different emphasis on these issues. For example, the rules on food hygiene in Europe and the USA are very strict (David, 2017)
There are a few company that are similar to subway so that increase the competition level as there are more and more new developed company that's coming in the industry. Many compare subway to Burger King due to their similar menu such as bread, lettuce, meats (chicken/beef). Burger King is not the only competitors in the industry, many "sub" company has come out that make subway's rivalry is high (Joyce, 2012)
The threat of substitutions refers to the existence of alternative products and their accessibility to clients. The treatment of substitution is high for Subway. Many subways treat the area of substitution because customers satisfy the same need with various alternatives such as McDonald's, Burger King, Popeyes and others (Riina, 2010)
The threats of new entrants are high because the entrants barriers are very low. Subs making are not a hard task to do which make the companies easy to build. Most of the costs are around the same number so there are not switching costs between consumer and the companies (blogspot.com, n.d)
The bargaining power of suppliers is low. The bargaining power of the suppliers is the definition of influencing the suppliers over the company (blogspot.com, n.d) Most of subway's customers would not want to lose subway because of the well known fresh ingredients. Example, their tomato, bread, onions, lettuce.
Some of the customers may cause pressure on subway. Other companies have more type of subs on their menu. Yet, subway's prices are lower than others (arguable). Subway also offer the customers to make their own subs. Their customer base is large which make the customer bargaining leverage is low. (Riina,2010)
Subway made a great accomplishment with $5 foot-longs sandwiches, or what many consider 11-inches sandwiches. In junk food, the $5 value point is brilliant, and it's hard to contend when such huge numbers of $4 and $5 esteem dinners keep on fulfilling esteem looking for buyers.
Subway's menu offerings are very limited. Other than offering the customer to make their own subs they also can put more variation in their menu so it's easier for customer to make their choice. Many customers took more time in choosing what kind of subs they want to get. In making more offerings in the menu customer can take less time in choosing what they want to eat so the process can be more effective.
Subway are known as yellow and green subs fast food restaurant that allow their customer to make their own subs for so long. Once in awhile a company sometimes are necessary to upgrade their brand to keep it up to date. As nowadays most company follow every trends or occasion and put their menu related to it. With this strategy, their brand will be more eye-catching and will interest more customer to buy their stuff.
For example, McDonalds are having Chinese food related in Chinese New Year, Christmas related food, etc. Subway may have some of their limited edition menu but, its not eye catching enough to the customers. Most of the time customer prefer McDonalds the subway due to their more interesting menu choices.
Subway's job scope may be easy but sometimes the employee can mess it up causing dissatisfaction in customers experience. Some customer gives complain to the company because of the employee accidentally gives the customer the wrong dish or put some wrong ingredients in customers food. Improving the employee's system can be very effective it can improve their service as-well. This will cause less complain and better feedback and can improve the brand image also.
In a nutshell, Subway is a private American fast food franchise that sells mainly sandwiches and salads. As of June 2017, Subway is one of the fastest growing franchises in the world and has about 45,000 stores in more than 100 countries. After examining the PESTEL and 5 porters analysis can say that subway has grown so much from when it started until this day. Subway are known for their product freshness makes it one of the reasons why their customers are loyal. Other than its freshness Subway also offer their customers to make their of subs.
In the 5 porters analysis it shows that subway's rivalry, threats of new entrants, threats of substitutes are high but their bargaining power of supplier is low and their bargaining power of customer is medium. In the SWOT analysis Subway has more strengths than weakness and more threats than opportunities. As subway is a strong company that has many loyal customer but still they have many things to improve and many company to compete. Till this day subway is still one of the strongest fast food company.
Exploring Subway: A Leading Global Fast Food Franchise. (2019, Nov 24). Retrieved from https://studymoose.com/subway-analysis-essay
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