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Subway sandwich shop case
This case discusses Subway Sandwich Shops and the sandwich restaurant industry. It analyzes Subway's history, customer base, promotion strategies, and competition using Porter's Five Forces model. The case examines issues like franchisee disputes and recommends actions like expanding offerings and locations to increase sales and market share as competition in the industry is high.
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Subway sandwich shop case
- 1. SUBWAY SANDWICH SHOPCASE Alika Koshy Ribhu Vashishtha
- 2. What is thecase about ? • Subway Sandwich Shops around the world. • The Sandwich Restaurant Industry • Subway History • Subway’s Customer Analysis • Subway’s Promotion Strategy
- 3. What is thecase about ? • Three big questions for deli firms:- – How to develop and keep a differential advantage in a highly competitive and dynamic market while maintaining: • Sales Growth • Profitability – What mix of the 4Ps to adopt and why? – How to deal with the growing competition?
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- 6. Bargaining Power ofSuppliers • LOW • Volume is critical to suppliers • Low cost of switching suppliers
- 7. Bargaining Power ofBuyers • LOW • Buyers require special customization
- 8. Threat of NewEntrants -HIGH
- 9. Threat of Substitutes 1. Convenience shops 2. Mid range restaurants 3. Pre cooked food 4. Health food shops -HIGH
- 10. Symptoms, Issues, Problems • Bad management • Poor location • Franchisees are battling franchisors for more control over their businesses. • Franchisors are fighting back to preserve their profits.
- 11. Actions taken •In addition to individual location efforts to increase sales, all Subway franchises contribute 2.5 percent (some markets elect to contribute more than this percentage) of weekly sales to the Subway Franchisee Advertising Fund Trust (SFAFT). • 99% of this advertising budget is allocated for TV advertising and the remaining 1% for print, radio, digital, outdoor advertising.
- 12. Actions to betaken • To increase per outlet sales, Subway should: – Promote their offerings for hours other than lunch and snacks as well, for e.g. breakfast, dinner, late night meals. • To expand outlets, Subway can: – Open outlets in supermarkets, malls, multiplexes, schools, colleges, amusement parks, hospitals, airports, bus stops, etc.
- 13. Actions to betaken • Increase the variety of their subs and sandwiches pertaining to various markets of the world. • Offer their food & beverages at various price points (low, medium and high) in major markets like India and China. • Introduce a combo of meals like kids meal, health meal, etc.
- 14. Subway’s Brand Positioning • Offers “fresh, healthy and affordable fast food”
- 15. Who is theaverage Subway customer? MALE
- 16. What does hewant? • Quality • Great taste • Value for money • Healthy food • Sufficient quantity
- 17. Loyalty Engagement Attachment Value for money Eat fresh Customized Product 4. Relationship What about you & me? Fit Great taste Filling Completely satisfying Health conscious Young Single Busy Professionals Submarine Sandwich Joint 3. Response What about you? 2. Meaning What are you? 1. Identity Who are you?
- 18. Customer Profiles 1.Subway: Prefer take away 2. Quizno’s: Prefer eat-in 3. McDonald’s: Prefer eating with family 4. Blimpie Drive-in: Young adults with children
- 19. Promotional Activities •Sponsoring of the New York marathon. • “Love your heart” campaign in Ireland. • Donations to Heart Research UK and the Subway Healthy Heart grant scheme, which supports communities to help them lead healthier lifestyles. • Endorsement by Michael Phelps and his portrayal as Subway’s “Famous Fan” • Formulation of the “Subway Diet” plan to help people lose weight.
- 20. Promotional Activities •According to the new “Talking About” option, Subway outranks every brand on Facebook, including Facebook itself.
- 21. Promotional Activities •Focus on: – Food Quality & Food Safety – Sustainable Sourcing Practices – Local Sourcing – Animal Welfare – Forced Labour & Human Trafficking – Streamlining Supply Chain
- 22.
Editor's Notes
- #3 A surprising 78.7 percent of all adults have patronized a fast-food or drive-in restaurant in the last 30 days (Table 1–1). And, some 31 percent of those same adults went 14 or more times to such a restaurant during that same time period (Table 1–1), making heavy users of the category. Demographically, heavy users are also more likely to be male, young, single, and live in the Northeast (Table 1–2).
- #7 When suppliers are reliant on high volumes, they have less bargaining power, because a producer can threaten to cut volumes and hurt the supplier’s profits. This can positively affect Subway. The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching costs positively affect Subway.
- #8 When customers require special customizations, they are less likely to switch to producers who have difficulty meeting their demands. Buyer customization positively affects Subway. When there are large numbers of customers, no one customer tends to have bargaining leverage. Limited bargaining leverage helps Subway.