Subway prides itself in being a healthy fast food chain offering a variety of sandwiches and subs
Founded in 1965 by Fred DeLuca and Dr. Buck.
As a growth strategy, and in
an effort to increase profits,
they embarked on the idea
of franchising their business.
Subway locations grew exponentially.
Formulating a unique value proposition
Targeting an underserved customer segment
Structuring an aggressive franchising model
Slogan:- “Eat Fresh”
Higher perceived value against competition.
Custom sandwiches tailored to customer.
Appeal to young professionals.
Low start up costs
Less equipment is needed
Countertop, oven, refrigerator, and microwave
Small Area is needed
Real-estate costs are low
Lowered operating costs which therefore raise margins
$12,000 v/s $45,000 for McDonalds
Makes it appealing to investors
FRANCHISHING International Growth:
1 st entered into world market in 1984 in the
Middle East nation of Bahrain
International expansion approach at the
“ If you like Subway, you think it’s a good thing, and
you think it would work in your country, then we’ll teach you the concept and how it works and you go make it work in your country.”
Used development agents to recruit franchises and assist in growth
Core menu was left unchanged,
with exception of religious and
“ In summary, Subway’s success consisted of a strong brand based on a unique value proposition aimed at a dissatisfied target segment. The company’s low-cost franchising strategy has allowed Subway to flourish both domestically and overseas.”
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Company Profile :
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The Asia-Pacific fast food market has experienced 11.7 percent growth between 1999 and 2003.
The market was worth $77.9 billion in 2003, an increase of 55.8 percent since 1999.
This growth is considerably stronger than the overall global market and is driven by the large-scale expansion of the Chinese market 83 %
In terms of value, Asia-Pacific represented 28.3 % of the global market in revenues for fast food in 2003.
Reputation as a decent place to eat
Ethical consideration for local venues – fast food can put them out of business
Many fast food places seen as American or Western icons – Can be dangerous in Middle East where protests and demonstrations are carried out at places like McDonalds