The International Business Environments of Franchising - Term Paper Example

CompetitorsAmong the main competitors of Subway as mentioned above is Yum! Brands. Yum which was started by Pepsico Inc. is a major franchise with such names as Pizza Hut, Taco Bell, Kentucky Fried Chicken, Dong Fang Ji Bai, and A & W restaurant. Its main operation strategy has been to establish a franchise (Cyrek, 2009). Franchising is using another firm’s successful business strategy to develop one’s business. The brand of one company is therefore used to sell by another according to a business agreement between the two (Anttonen, 2005).

Just like Yum, Subway is a franchise. The main difference is that whereas Yum offers a variety of services, Subway specializes in fast foods, with sandwiches as their main product. This specialization has given Subway an edge since it is easily identified with the sandwich which is its main widely recognized product. In a way, it is the swift expansion program that worked to Yum’s advantage, yet presently they don’t seem to have anywhere else to expand to since their company has saturated its the primary US, European and Asian market (Subway, 2008).

Subway still enjoys a lot of room for expansion, especially to the newly emergent Chinese market. Marketing the sandwich is, therefore, a process that will keep expanding for the subway in the near future. But the biggest key advantage Subway has is in its name, they mainly market their products in subways with passengers who just find the product very convenient to grab on the way to their destinations (Subway, 2008).Economic Trends in Key MarketsProducts such as sandwiches do well in markets where people have a relatively high disposable income.

A busy environment in which people have tight work schedules that do not give them the extra time to cook for themselves also suffices. Subways which serve customers on transit are quite strategic for selling sandwiches too just as explained above. The main trends that affect the business are economic recession such as the one which started in 2007. Sandwiches may be delicious, but they are classified as luxuries and are thus among the first casualties when families opt to tighten their belts (Cyrek, 2009).

ConclusionThere are two major current political changes that have worked in favor of the fast-food business. The first is an economic recovery that is currently taking place in the US after the recession. This has worked in favor of sandwiches among other things whose sales have gone up. Secondly, there is the emergent market in China where folks now have an ever-increasing disposable income. This will work well to support the growth of Subway (Cyrek, 2009).