SUBWAY SANDWICH SHOP CASE

Alika KoshyRibhu Vashishtha

What is the case about ?

• Subway Sandwich Shops around the world.• The Sandwich Restaurant Industry• Subway History• Subway’s Customer Analysis• Subway’s Promotion Strategy

What is the case 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?

FIVE FORCES MODEL

Rivalry Between Competitors-HIGH

Bargaining Power of Suppliers

• LOW

• Volume is critical to suppliers

• Low cost of switching suppliers

Bargaining Power of Buyers

• LOW

• Buyers require special customization

Threat of New Entrants-HIGH

Threat of Substitutes

1. Convenience shops

2. Mid range restaurants

3. Pre cooked food

4. Health food shops

-HIGH

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.

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.

Actions to be taken

• 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.

Actions to be taken

• 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.

Subway’s Brand Positioning

• Offers “fresh, healthy and affordable fast food”

Who is the average Subway customer?

MALE

Young Single

Busy Professional Resident of north-east

What does he want?

• Quality• Great taste• Value for money• Healthy food• Sufficient quantity

Submarine Sandwich Joint

Eat freshCustomized Product

Loyalty Engagement Attachment

FitGreat tasteFillingCompletely satisfying

Health consciousYoungSingleBusy Professionals

Value for money

4. Relationship

What about you & me?

3. Response

What about you?

2. Meaning

What are you?

1. IdentityWho are you?

Salience

ImageryPerformance

Judgment Feelings

Resonance

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

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.

Promotional Activities

• According to the new “Talking About” option, Subway outranks every brand on Facebook, including Facebook itself.

Promotional Activities

• Focus on:– Food Quality & Food Safety– Sustainable Sourcing Practices– Local Sourcing– Animal Welfare– Forced Labour & Human Trafficking– Streamlining Supply Chain

Thank You.