Basic Growth Strategies Implemented by Subway to Grow - Essay Example

?Running Head: Subway Subway [Institute’s Table of Contents Introduction 3 Basic growth strategies implemented by Subway to grow 4 Strategic capability of Subway and its competitive advantage 6 Strategic capability that contributed to Subway's competitive advantage 9 Conclusion 10 References 12 Introduction Globalization provides immense opportunities to the corporations to start-up new business and gets renowned worldwide. Fast food is one element of food that not only saves the time of an individual but also hoards money, as everyone is in a rush in today’s fast-paced life and strives for saving money. Subway is one of the well-known fast food restaurants that has gained a differential advantage in the food industry and is distinguished and prominent with its customers for its unique and healthy set of food choices that was a low-fat and healthy alternative of burgers and French fries (Czinkota & Ronkainen, pp. 334, 2007). The fact of the case depict the concept that initiated as a sandwich store; come into sight by Fred DeLuca when he did not had any other option left to pay his fees for his education. This was a suggestion by a family friend after observing the trend of growing demand of sandwiches in the local area as this was something that provided people with healthy food instead of oil based rich food (Adamson & Segan, pp. 261-262, 2008). Subway grew as one of the widespread and leading fast food franchises that have its chain of restaurants across the globe, where they sell sandwiches, salads, and pizzas (Czinkota & Ronkainen, pp. 334, 2007). Subway gets a competitive advantage over others, as it is the foremost one to bring a diverse healthy menu that no one has offered yet for its customers, as health concern has become one of the most important aspects for the entire human kind. Due to its specialized product range, market provides subway with benefit that consents them to have a premium over price (Czinkota & Ronkainen, pp. 334, 2007). According to personal point of view and perspective, Subway has gone far ahead since the time it materialized as a business from a very small platform, which was a small sandwich store that only had a limited variety of food offerings. With the development and expansion, Subway evolved as one of the most extensive, persuasive, and popular chain of restaurants with a wide range of fresh and low-fat foods. Basic growth strategies implemented by Subway to grow “Subway is a fast food restaurant that emerged in 1965 by a person named Fred DeLuca” (Adamson & Segan, pp. 261-262, 2008), in order to make some money for his studies, with a friend’s suggestion to start up a sandwich store as its trend proved that it was relatively eminent in the locality. At the initial stages, Fred used to clinch the deal with manifold choices of freshly cut long sandwiches with a variety of fillings that was on the customer’s preferences and gave the name of Pete’s Super Submarines. Later, he changed the name into Subway after success of his business and he modified and enhanced the marketing strategies, approach to the product range and its in-store production (Adamson & Segan, pp. 263-300, 2008). Their distinctive attributes and features became the basis for their business strategies development that made them different and unique in the market place. As any strategic planning come under performance to augment the company’s sales and performance when compared with the competitors present in the market as it consists of strategies, approach and guidelines that has the foundation on the company’s goals and targets. Therefore, Subway developed the strategy to maintain their capital costs to be comparatively lower than that of their competitors present in the market like McDonalds, and Burger King Restaurants so that they can capture the consumer market on a rapid pace and become the market leader as the case study provide the proof. This policy and technique facilitated them to take hold of more customers. They followed their goals that were to become the best in ‘Quick service Restaurant’ and to be on top of their competitors on a global basis. They developed a trademark of their company that was to provide their customers with fresh food of flavorsome and delicious taste (n.d., pp. 100-105, 2003). In addition to it, they hired fewer staff members on their store outlets so that the owners can save more money such that, it could come under utilization for their other operational functions and advertisements. As according to one of their goals and missions, they wanted their employees to work in an environment that is challenging, fruitful and beneficial and endow them with favorable circumstances to enhance their skills and abilities in a productive manner personally as well as professionally. Furthermore, to the strategies that supported them in their growth as evident in the case study, was the innovative change in their logo name and design, which was strong, simple, influential, trenchant, and persuasive. With the clean, elegant, and simple presentation of the products, it made a difference in their food items and presented a clear image of hygienic and fresh food. According to fact that the case study provides, with an uncomplicated food presentation, Subway build an advantage for themselves in order to expand and make them grow (n.d., pp. 100-105, 2003). The diagram clearly illustrates the corporate strategic management and plans that came under execution. As Subway commenced its operations as a smaller scale business procedure, therefore, they continued with the same practice even after reaching the sky level. Franchising was one of the aspects that made Subway grew to skyrocket, as they launched the outlets in various regions and locations that were small-scale outlets such as schools and factories rather than a neighborhood with high customer communication such as shopping malls. The situational analysis that is the SWOT analysis done by Subway was one of its marketing strategies that helped them in rising. As the case study shows the piece of information that, they focused on their strengths as the unique product line and saw opportunities in the small-scale regions where none of their competitors reached (Hsu & Powers, pp. 123-168, 2002). Since humans have always been particular about their health concerns, Subway took benefit of health concern, and widened and enhanced its promotional activities that focused on range of several low-fat sandwiches with a selection of delicious toppings and fillings of customer’s choice. They practiced according to their missions, which was to offer fresh, healthy, and low-fat food in a hygienic and dirt-free environment to their customers. This radically heightened up their sales level and it became the first low fat and hygienic food producers with a wide variety of food options until the late 1990s. Even after the success, the company desired to catch the attention of those customers whose meal is incomplete without a fat rich food. As a result, they launched a wide variety of big eater sandwiches like steak and cheese. This strategy augmented their sales to an unprecedented level (Pride & Ferrell, pp. 2-50, 2006). Strategic capability of Subway and its competitive advantage With covering most of the world with its chain of restaurants, Subway has emerged itself into the prevalent amongst its competitors. The slogan of Subway “Eat Fresh” noticeably and undoubtedly states its motives that they provide sandwiches and all the other food items with the purely fresh ingredients in it and is prepared in the presence of the customers to satisfy the hygiene. Subway has positioned its outlets with the purpose of influencing their strengths, deals with sustainable threats, overcome weaknesses, and grabs the opportunities. Subway has designed its structure in a way that it possesses much strength that makes them competent in the market (Jones et al., pp. 250-265, 2000). Their healthy menu with customized offerings, fresh ingredients and fast preparation makes them demanding for their customers, which is one of the prime strength of them. Due to their low start-up cost involved for a franchise, it saves their cost that can come under utilization for different activities. Training structure is one of their strengths that is given to the employees is epigrammatic and planned in a way that ensures success rates. They have an edge over other competitors in the market as they being a newer franchise comparatively have established large number of stores in many regions of the world and have gained significant recognition amongst the masses. Subway has paid attention towards partnership and sponsorship with a number of associations that promote health issues (Jones et al., pp. 250-280, 2000). Along with all the strengths that they have, employee turnover is the biggest weaknesses of Subway as a lot of capital comes under investment on the employees’ training and learning that comparatively Subway earns less profit. Subway focused on the food quality such as hygiene, and freshness but ignored the fact that interior of the restaurants is equally important to attract the customers. Its old-fashioned furnishings created a boring and uninteresting impact on its customers. Since the franchise does not come under central administration and do not have a head office to look after happenings in each outlet, therefore, the quality and services of the food differs from franchise to franchise (Berman et al., pp. 90-105, 2005). The capacity of growth in the global market is the major opportunity to them. In addition, the continuous revision and expansion in their menu such as addition of desserts and beverages, brings out another opportunity for them to escalate. As unattractive and boring decor is a major weakness of Subway, they worked on improving its decor and converted this weakness into a favorable opportunity. Due to busy schedules, people normally prefer to eat while driving, therefore, they the concept of drive-through is becoming popular these days. As this facility was not available in Subway franchises, they tried it to check if it works to boost their sales. Since Subway is not the only fast-food restaurant reachable prospect in the market, therefore, its competitors are significant threat to them (Doole & Lowe, pp. 280- 300, 2005). The economic decline has diminished the buying power of the customers and people are not even able to pay for the necessities, therefore, customers are decreasing on everyday basis, affecting the revenues of Subway. This is a leading threat to Subway in today’s time. Food contamination is another threat to Subway because if the food does not come under proper protection from microorganisms such as bacteria and fungus, they can invade and spoils the food. Subway or any other food franchises needs to be careful while handling food items and the food quality needs to be up to the expectations of the food association. If this does not happen the way it should be, the companies are under a treat to have the law suits filed against them (Anderson & Vincze, pp. 200-220, 2000). In the growing environment of competition, no company can escape without competitive pressures and Subway is one amongst them. Many competitors present in comparison to Subway have captured their own market share who gives a big competition to it. In contrast, Subway still plays a dominant role; and has gained the competitive advantage over its competitors as the customer demand of burgers and fries have shifted to healthy food like sandwiches and salads (Hitt et al., pp. 250-255, 2009). Therefore, with the increased marketing and promotional programs, Subway addresses the customers’ expectations through a wide variety of techniques. Subway reached its customers through television advertisement where they can influence the customers to come to Subway with the emphasis on health aspects, billboards, and sponsorships in events that includes children’s sports team, and triathlons (Hitt et al., pp. 255-265, 2009). With the extensive marketing strategies and product enhancements in order to meet the customers demand, Subway was able to form obvious and apparent brand recognition and the brand-product association for its customers. The brand recognition tactically positioned Subway to achieve a large segment of the market share (Hitt et al., pp. 250-265, 2009). Strategic capability that contributed to Subway's competitive advantage Subway has dominantly captured a big market portion due to its strong and innovative strategic capabilities and has an edge over its competitors. The SWOT analysis for any corporation plays one of the key aspects in determining and designing the strategies that leads to the success of the company. To make a business continue to exist, flourish and sustain value in the future come under strategic capabilities of a franchise. Subway got the competitive advantage over its rivals mainly because of its product range that provided its customers to have the food of their choices with extensive options available to them. According to the goals and objectives of Subway of wide-reaching strategic plans (Hitt et al., pp. 250-265, 2009), they accomplished it by the end of first decade of the twenty first century by entering into every corner of the globe. The core competencies make the situation clear for Subway as their capabilities and resources provided them to strategic advantage over their contenders. In the today’s fast pace world, the most important factor for any individual is their health and a person will not hesitate to pay a high amount if the food that he is purchasing tends to be healthier. The success of Subway lies in the fact that, it is a producer of fresh and healthy food, which has gained a prominence not only amongst the young generation but also in people of every age, who wants healthy fast food. Subway has broadened itself in a way that now it even provides a complete detail of the nutrition and the level of calories present in the food range. Subway restaurants have not only gained recognition but have achieved many awards and appreciation because of its healthy food quality. Conclusion From the study of the report, it can clearly come under conclusion that emergent globalization trend has given rise to the demand and popularity of fast-food restaurants. With a number of fast-food restaurants present nowadays, no one has reached up to the mark as Subway. It is the leader in the low-fat variety of food, which has its outlets operating in every corner of the world as people have now changed their perspectives and eating habits as now they have become health conscious. With its unconventional techniques, it has made a big faction of the population its fans. Due to its low price, it has gained a competitive advantage over its competitors in the market. Through the mistakes and its weaknesses, Subway has learned a great deal and has translated its weaknesses into great opportunities to gain success. Subway with its strategic objectives and plans, it has been able to reach to the hearts of customers leaving an indelible imprint on them. References Adamson, Melitta Weiss, Segan, Francine. 2008. Entertaining from Ancient Rome to the Super Bowl: A-G. ABC-CLIO Anderson, Carol H., Vincze, Julian W. 2000. Strategic marketing management: meeting the global marketing challenge. Houghton Mifflin. Berman Barry, Evans Joel R., Mahaffey Tom. 2005. Retail Management: A Strategic Approach. Pearson Education Canada. Czinkota, Michael R., Ronkainen, Ilkka A. 2007. International marketing. Cengage Learning. Doole, Isobel, Lowe, Robin. 2005. Strategic marketing decisions in global markets. Cengage Learning EMEA. n.d. 2003. “Special Advertising Section.” Black enterprise. Volume 33, Issues 10-12E: pp. 100-105. Hitt, Michael A., Ireland, R. Duane, Hoskisson, Robert E. 2009. Strategic management: competitiveness and globalization: concepts & cases. Cengage Learning. Hsu, Cathy H. C., Powers Thomas F. 2002. Marketing hospitality. John Wiley & Sons. Jones, Gareth R., George, Jennifer M., Hill Charles W. L. 2000. Contemporary management. Irwin/McGraw-Hill. Pride, William M., Ferrell, O. C. 2006. Marketing: concepts and strategies. Cengage Learning. Read More