Subway Case Analysis
SUBWAY® is the market leader in sub and sandwich shops offering a healthier alternative to traditional fast foods. SUBWAY's® annual sales exceeded $6.3 billion dollars, while countless awards and accolades have been bestowed its chain over the past 40 years. SUBWAY® had 7,825 units worldwide with 7,750 units in North America whilst its rapid growth has attracted many investments and brought it many competitors such as KFC and Burger King. Recent initiatives to attract customers beyond SUBWAY's® traditionally health-conscious consumers should increase the company's share of the fast food market.
Strategic Marketing Issue
Being part of a highly competitive and dynamic market, SUBWAY® faces a strategic marketing challenge as to what specific marketing mix to use in order to sustain a differential advantage while maintaining sales growth and, above all, profitability.
Subway effectively competes with burger chains and others that are in the fast-casual segment of the market. Including healthier meals into its menu and giving much attention to obesity and diabetes have supported consumers' choice for Subway (Tarantino, 2005). However, Subway has not been satisfied thus far; instead, more intensified efforts have been made to improve business during the dinner hour. Additional menu options have also been added to answer competitors' trends and to place more focus on the children's segment.
Team B's SWOT analysis can be helpful to highlight Subway's 1) internal strengths and weaknesses along with 2) the external opportunities and threats.
In the past few years, the sandwich market has gained incredible popularity in the American culture. As the fast food landscape continues to evolve and change, one of the most dynamic segments within the quick serve restaurant market continues to be sandwiches, subs, and wraps. Driven by consumer interest, sandwich chains are expanding in locations as well as variety. The sandwich sub and wrap market has grown 70% since 1999, or from $9.9 billion to an estimated $16.8 billion in 1999-2004. Primarily Subway, Quiznos, and Panera Bread have fueled the growth and momentum in this market (Mintel Int'l Group, 2005).
Subway has grown into the largest sandwich chain with over 25,000 restaurants in 83 countries. The chain offers more operating units in the U.S. Canada and Australia than McDonald's (Subway, 2006). Even though competitors have entered the sandwich market, Subway continues to be the market leader in this segment. As the sandwich trend continues, competition continues to increase while competitors expand their menu selections to include lighter and healthier sandwich choices. As other restaurants continue to capitalize on this market, it is imperative for Subway to adjust market strategies in order to provide more choices for their customers.
Subway's traditional target market has been those consumers who want a fresh meal in a hurry but are eager...