Subway Operating Environment - Essay Example

 Subway Operating Environment 1.0 Introduction Subway chain remains the third biggest fast food series in the globe after McDonald’s and KFC. The initial Subway remained established in 1965. The establisher of the Subway food series, Fred De Luca, commenced operating his restaurant enterprise when he was merely 17 years of age. The initial Subway restaurant remained launched nine years following its establishment in Connecticut where the capital remains currently located. Currently there are excess of 30,000 Subway restaurants in 88 nations globally and it remains the globe’s quickest developing franchise series. Latest Subway restaurants remain coming into existence throughout. The franchise series has recruited excess of 150,000 individuals. The restaurant provides its consumers with several various types of fresh submarines sandwiches in addition known as “subs”. Consumers all the moment make choices on the way they need their sandwiches to remain served (Griffin, 2012). Subway’s promotion remains founded on freshness. Slogan “Eat Fresh” informs that Subway series makes use of simply fresh scorched bread and fish constituents. Subway faces very stiff competition from other businesses in the same field like McDonald’s, Burger King and Sunset Boulevard. There existed more than 20 Subways in the late 1990s in Denmark; however, ten years back they vacated the Danish market. During 2009, Subway made efforts to struggle for the Danish market once more. At the start of February, they re-launched Subway in two towns, in Sonderborg and Aalborg. The Subway series faces stiff competition in Danish market from key competitors such as the Danish series and Sunset Boulevard. During the time the Subway was removing their restaurants from the Danish Sunset Boulevard purchased three of their divisions (Griffin, 2012). 2.0 Environmental analysis 2.2. Economic factors- They have an influence on all enterprises, countrywide and internationally. Economic elements influence the buying capacity of the consumers and the organization’s cost of capital. It constitutes regions such as the exchange rates, economic development and inflation frequency (Dubofsky, 1968). In subway, the factors are key help the management to understand the economic growth of the restaurant. 2.3. Social factors- These factors constitute population reforms. There are several elements that influence people’s lifestyle because people stay in a community. A few key factors include household, religion, learning system and positionality (Boyer & Verma, 2010). Demographic development rate, age spread and jobs motives remain all incorporated in social factors. Within the restaurant, these factors are critical as they help in planning for the meals based on the population, gender and age discrimination. This ultimately helps in planning for the meals. 2.4. Technological factors- Technology has remained the key stimulator of development in every field of late, the restaurant industry not left behind still. Technology is the main driving impulse and minimizes time to market. A few technological elements include research and growth exercises, use of machines and stakeholder anticipation (Hayes & Ninemeier, 2009). To realize and be at par with the recent technology, Subway must put in place every recent technology that is related to restaurants to ensure that all the data is kept and updated with ease. In addition, this will help raise reputation and make work faster and information more save. 2.5. Environmental factors- these remain essential factors for the success of any business operating in a certain area at whatever cost. Therefore, environment within which the restaurant is situated determines the success and growth of the organization realizes. Just like any other sound business, the environment for the Subway Company promotes its growth and success. These factors include the climatic change, topography of the area among other factors (Griffin, 2012). 3. Competition There are forces in a market that influence the operation of a business and that which influence the success of a business. The forces which remained devised by Michael Porter are known as Porter’s five forces model. Porter had the idea of clarifying that a business remains affected by five varying strengths. These forces include rivalry, threat of entering the market, vendor strength, buyer force, and the threat of substitute products. This model aids organizations know the power of operating competitive state and in addition, the power of a rank the institution intends to shift into. 3.1. Rivalry among competitors- It is vital for an institution to understand the number of competitors there are in the market. If merely a few rivalries exist, then an individual knows that there is possibility of possession of great power to operate unlike when the competition is high. The more the number of competitors there are in a market, the less the strength one has. It in addition depends on what competitors remain providing to their consumers. Consumers will shy away from those people who do not want to contract with them and get resourceful and promising deals from them. 3.2. Buyers- The total numbers of vendors’ posses a great influence in the market including the way strong a buyer is. In a market dominated by many buyers, they set the price for the market and thus end up getting fair prices for them. 3.3. Threat of new entrants- New organizations remain joining the market each moment. Each organization must have the capacity to join and establish itself in the market whenever they wish like. In actual, there exists a few elements which may make the joining very difficult, for example, the expense of joining differ from business to business, the rivalry in the market and the state which forms shortcomings. 3.4. Suppliers- Suppliers play a huge part in the market as well. Manufacturing institutions require raw materials and they can only receive the materials from suppliers. This entails an association between the purchaser and the supplier. If there exists merely a small number of suppliers in a market, dealers can vend their materials at an increased price and purchasers have nothing to do other than just buying the items at such a price (Interborough Rapid Transit Company, 2007). 3.5. Substitute products-In this framework, substitute items or services means items or services in different organizations. Organizations have to reason on the way to how simply their items or services may have substitution. Therefore in other words, organization owners have to devise means of determining moreover what their rivalries remain practicing and what different kinds of items or services would purchase from the competitors instead (Griffin, 2012). 4.0. Resource types and capabilities 4.1. Systems-The Company has a well developed system network which facilitates the transfer of the needed information from one destination to another within the organization and at the economical cost possible. 4.2. Staff- The organization provides a program and data resources to offer the understanding that the business oriented people require. The franchise purchases the rights to perform under the concept of Subway. 4.3. Quality of the product- The organization takes keen attention on the quality of the items offered and the quality of the service the staff offers to the customers. This remains ensured through fresh items and the scrutinies. 4.4. Location flexibility- The organization does not search for latest markets instead, the potential restaurant owners look for Subway to contract them. Therefore, the business has the potential to grow bigger and faster through the many potential businesses who approach it (Dubofsky, 1968). 4.5. Operational staff- The organization provides coaching courses and data resources to franchisees. The staff remains equipped with the necessary knowledge to facilitate operation of the business smoothly. 4.6. Skills- Subway offers the franchise with marketing skills together with the vital equipment for him to carry out the business effectively. These skills will aid in knowing how to counter the market threats and evaluate the opportunities available as well as the strengths of the business. 4.7. Style-Subway directs the franchisees in the correct direction with coaching modules and important data. It promotes its franchisees and aids to commence the business (Griffin, 2012). 5.0. SWOT Analysis STRENGTHS WEAKNESSES 1.Size and number of stores and channels 2.Menu shows demand for healthy quick foods and fresh 3.Huge market, moreover in modern markets, like airports, hospitals among others 4. Global brand identification: more than 30,000 situations in 90 nations 5.Minimum franchisee commencing expenses contrasted to the major competitors 6.Personalized menu provision: consumers may leave an item out or demand for something twice 7. Franchisee coaching, modules and data remains given for a fast commencement 8. Firm market rank: second biggest restaurant runner 9. Great quality commodities and services 1.Service conveyance remains not systematic from warehouse to warehouse, this translates to that Subway has no effect on the service every restaurant gives the consumer (Hayes & Ninemeier, 2009). 2. If the market remains contended there is moreover a probability that individuals need to launch a restaurant OPPORTUNITIES THREATS 1.Increase franchisee associations to offer better data sources 2. Enlarge packaged dessert provisions, so as to give consumers the selection between desserts 3. Get on revising and refreshing menu provisions, which helps to live up to date with behaviors inside the market and to function for the best probable commodities 4. Space for development in the sandwich market located in Denmark 5. Enlarge commodities or service chains locally and internationally 1. Financial disorder: because of the economic redundant growth, individuals have little money to spend in the market 2. stiff competition: Subway faces competition from other large operating companies in the same industry like McDonald’s, Burger King, and the Sunset Boulevard 3. New rivalries joining the market: this poses threat to the existing ones since they have to look for means to stand out from each other so that one remains competitive. The number of small restaurant such as kebab areas remain increasing 4. price rivalry among competitors remains another major threat in the market 6.0 Recommendation and conclusion As evident in the recent competition seen in the quick service market, there is need for restaurants to grow in a faster way and more in the optimal locations. As such, Subway is no exception. Therefore, through the management should utilize the demographic data appropriately, marked by extensive research on areas with weakness (Restaurateur, 2010). Another crucial area that need to be given emphasis is understanding of their clients. In this, the restaurant should note with concern the preferences of their clients as well as their purchasing behaviors. Importantly also, based on the SWOT analysis given above, the management must put in place growth strategies. However, these strategies should not strain the management and should be within the restaurants financial brackets. Lastly, the need to respond quickly and in a timely manner any changing demands that might arise from the growth plans especially on the resources and infrastructural facilities is critical (Enz, 2010). As such, realization of all long-term goals and the objectives will be realized as planned. References Boyer, K. K., & Verma, R. (2010). Operations & supply chain management for the 21st century. Mason, Ohio: South-Western/Cengage Learning. Dubofsky, M. (1968). When workers organize: New York City in the progressive era. Amherst, Mass: The University of Massachusetts Press. Enz, C. A. (2010). Hospitality strategic management: Concepts and cases. Hoboken, N.J: John Wiley & Sons. Griffin, R. W. (2012). Fundamentals of management. Mason, OH: South-Western Cengage Learning. Hayes, D. K., & Ninemeier, J. D. (2009). Human resources management in the hospitality industry. Hoboken, N.J: John Wiley & Sons. Interborough Rapid Transit Company. (2007). The New York subway: Its construction and equipment. S.l.: PeriscopeFilm.com. Restaurateur, R. L. (2010). Everything Guide To Starting And Running A Restaurant: Secrets to a Successful Business!. Cincinnati: F+W Media. Read More