Business Strategy for Subway: Analysis and Implementation

This article analyzes the business strategy of Subway, including its external analysis, internal analysis, SWOT analysis, and implementation. It also discusses the leadership style adopted by Subway.

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Introduction
Subway is an American fast food franchise that is owned by Doctor’s Associate, Inc. It operates
in the global market while it has expanded its business in more than 90 outlets. Subway was
founded by Peter Buck and Fred DeLuca with its first restaurant that is being set up in
Bridgeport, Connecticut US in the year 1965 (Makki, Ozturk and Singh, 2016). The statics
represent the chained foodservice market share of Subway in Singapore from the year 2012 to
2016. In the ear 2016, Subway in the country has a market share of almost 2.8 % that represent
slightly enhancement from 2.6 percent in 2012. The sales of the Subway fell 1.7% in the year
2016 from $11.5 billion in the year 2015 to $11.3 billion (Yan, Zhao and Guo, 2018).
(Source: Statista, 2019)
The mission of Subway is to offer value to the consumers by providing the quality and tasty food
that is good for them and made the way they like it. The vision of Subway is to become a Quick

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Service Restaurant (QSR) franchise in the international market while delivering healthy, fresh as
well as delicious sandwiches with a unique experience (Fettling, 2017).
External Analysis
The main purpose of analyzing the external environments is to support in developing a plan by
keeping the decision maker within a company. It helps Subway in making effective decision
according to the change in the external environment that will help in changing the threats into
opportunities for the company
PESTLE Analysis
Singapore is one of the developed countries in Asia with several policies and regulations that
attract the maximum number of consumers over the world. Singapore has also friendly as well as
open policies for foreign companies. The country is considered at the potential for the food
industry with about 5.1 million of the population in Singapore (Henderson, 2016). The increasing
number of the new establishment such as fast food franchise as well as a strong brand around the
country has represented a significant growth and development in such sector. It has been
analyzed that 90% of the population like fast food on a regular basis and 10% love fast food. It
increases competition in the industry of fast food at a greater level. Most of the small chain faces
challenges for surviving in such industry (Dunford et al., 2017).
The politics of Singapore is a combination of equality as well as bureaucracy. The government
has taken various steps to prevent unhealthy food in Singapore. . Sales of Food Act also mandate
that the products of food that contain sweetening agents shall carry advisory statement related to
the consumption by children below 9 years in the prescribe form. Diabetes Prevention and Care
Taskforce is conducting the studies on additional implementation measures to motivate reduction
of sugar consumption in Singapore. Such potentially include sugar tax, warning labels as well as
advertising restrictions on sugar-sweetened beverages (Stanford, 2016). Therefore, Subway also
served cold drinks that create challenge for them to target the people of Singapore
Moreover, in the recent scenario, the rate of inflation in Singapore is raising that affected overall
sales and revenue of the fast food companies at a greater level. The consumer price index of

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Singapore probably rose by 0.6 % in January that enhances the cost of food products (Kong,
2015). It created a great impact on the sales of Subway due to the reason the increase in inflation
rate enhances the price of Subway’s products that resist the consumer to buy such high priced
product. Therefore, the fluctuation in the economy of the country has a direct impact on the
performance of the company at a greater level.
Singapore is one of the eastern countries who still follow traditional families’ values. They
majorly prefer authentic food and nowadays the population of Singapore is conscious towards
healthy eating that affected the overall demand and sale of Subway (Fischer, 2019). Health
Promotion Board has also taken initiatives in spreading awareness for healthy food in Singapore.
They influences on the dietary choices of Singaporean, with the growing number of healthier
meals that is served by the food a well a beverages outlets by three fold over last three years. In
the recent 26 million of Singaporean are switched towards healthier meals (Health Promotion
Board, 2019).

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Strategic Grouping
While analyzing the strategic grouping of Subway, it found that Subway is not require to worry
about competing for the consumers with Ruth’s Chris Steaks due to the main reason of confront
mobility barriers for the company. The consumers of such restaurants are differing from Subway
that makes it competitive in the market. As Subway offer gourmet steak and experience offered
by fine dining outlets are different.
Applebee’s as well as Chili’s has adopted variety of promotions such as coupons as well as
meals combinations to fascinate consumers of budget cognizant Subway and Quiznos has
already offered low rated meals that enhance the level of competition among them at greater
level. There is no tilting that is predictable at the previous eateries, but there is at the latter.

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Applebee’s as well as Chili’s try to enlarge its appeals to consumer of budget conscious s by
trialing with the functional layouts.
Ruth’s Chris Steaks offer high-quality food as well as its managers could deliberate poignant the
company towards proposing a varied menu as well that can enhanced significant risk for Subway
at greater level. Moreover, McDonalds, Burger King, Pizza Hut, Kentucky Chicken majorly have
low menu list as well as with low quality that does not give level of competition to the Subway
(Guan et al., 2016).
Internal Analysis
Resource Based View
Physical Resources: There are certain physical resources that are occupied by Subway which
mainly include equipment as well as other tools that are used when dispensation as well as
preparing the sandwiches.
 Every member manages such paraphernalia by frequently scrubbing the equipment. The
company has occupied land in which flour is grown up to make breads.
 Moreover, as a capital, the company has purchased trucks that are used to transport goods
to restaurants.
 The company has more than 40000 restaurants in the overall international market that
made competitive in the market.
 It serves 5300 sandwiches at every minute that represent 7.6 million subs every day.
 It uses 16 acres of lettuce every day (Entrepreneur, 2019).
Human Resources: Subway is highly depends on its human resources to retain the corporate
lucrative.
 The company provides training to its employees as well as regular appraisals is done to
motivate the employees towards the targeted goal of the company in more efficient
manner.
 The company employed and manages more than 410,000 individuals to run the business
efficiently (Entrepreneur, 2019).

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Technological Resources: There are not numerous of such in Subway however they require to
be maintaining to keep running the business more efficiently.
 The technology includes air ploy and television. The air ploy makes the staffs of Subway
more contented as well as relaxed that help in enhancing the morale as well as
motivation of employees.
 The cashier is also a technological resources as well as it’s require training to be able to
run in more efficient manner.
Financial Resources: while analyzing the financial resources of the company, Subway has owed
huge amount from the market on its great reputation.
 The total debt of the company increases by $ 4.12 million.
 The company has annual sales of $20 billion. Therefore, the company has managed its
financial resources in more efficient manner.
 The total assets of the company are around $20.89 billion (MorningStar, 2019).
Reputation: the company has earned great goodwill in the market. The consumers of the
company are highly satisfies that made them competitive in the market.
 For reputations of subway amongst employees there are two strong indicators such as
company pride and referrals.
 It has been analyzed that 68% of subway employee’s expresses that are proud to be part
of the company as well as 30% would be willing to recommend working at Subway to
their friends as well (Moreno and de Miguel, 2018).
 The goodwill of the company valued as $718 million that represent that the company has
great value in the market (MorningStar, 2019).
SWOT Analysis
Strengths Weaknesses

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 The main strength of the company is
the company has expanded its business
in the world by the number of outlets.
 The company has selected the choice of
healthier meals that attracted the
maximum number of consumers
 The interior design of the outlets looks
not attractive.
 The employee turnover ratio in the
company is high
Opportunities Threats
 In Singapore, there is an increase in
demand for healthier food
 the online platform provides a new
market to the Subway to target its
consumers
 The increase in the competition
provides a great risk to the fast food
chain Subway
 One some portion of the Subway set
menu offers food related to healthier
choice though the remaining part of
menu is rich in salt, and also comprises
numerous calories and it is also
escorted by a soft drink (Cui, Allan and
Lin, 2019).

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Strategic Growth
Business Level Strategy
(Source: Strategic Management, 2019)
Business level strategies make the company unique from its competitors that help them in
surviving and competing for the market. The business level strategies are divided into three
component cost leadership, differentiation and focused. Subway has adopted a differentiation
method in its business that makes them competitive in the market. Subway is quite different from
other companies in term of quality as well as making the process. The slogan of it is “Think
Fresh and Eat Fresh”. It gives an option to the consumers to see the making process and select
vegetables they like and the sauces they wanted. Such a method makes them different from other
fast food companies in an efficient manner. Moreover, Subway serves healthy fast food to the
consumers that make them unique from its competitors such as McDonald's, Burger King and so
on. Thus, the differentiation method of Subway make them competitive in the market and can
able to compete is competitors in a more efficient and effective manner (Zhang et al., 2017).
International Strategy
International strategy plays a vital role in the growth and success of business. The fast food
industry is at matured stage. The competition is rife in Food and Beverages industry of
Singapore. However, such industry has full potential as well as opportunities for innovative as
well as nimble players. It is at the peak point where the industry has earned maximum profits.

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The growth of earning as well as sales grows slower in the mature industry while comparing to
the emerging industries. Such stage is faced by the Subway is due to the reason that supplies of
products is high as well as the consumer also tend to become smarter as they ate more
familiarized that enhance the level of competition in the industry.
(Source: Marketing Insider, 2019)
Strategies adopted by Subway
Therefore, Subway works in the matured stage of industry that has passed both the emerging as
well as the growth phase of the industry growth. In order to enhance the life of its products,
Subway has used certain strategies. As their main product line, sandwich are well known as well
as familiar enough to the public, the company has adopted the strategy of price reduction for a
limited time period that benefited to them. For the relatively unknown products such a Flatizza
line, the company has adopted more promotion method specific to the products as well as the
variety of the menus that helped them (Harrington, Ottenbacher, and Fauser, 2017).

Business Strategy 10
Implementation
Leadership Style
Leadership is one of the effective tools that are used to grow in the market. It is the process of
influencing the individual, by personal characteristics or behavior to achieve and attain the
desired goal of the company. Moreover, leadership is the individual who stimulates inspiration in
other individuals to attain a targeted goal as well as emphases on the individual in its place of a
chore; it helps in inspiring long-lasting motivation that will eventually drive changes in an
organization (Antonakis and Day, 2017). Therefore, the main leader of the subway is Frederick
A. Deluca who is the co-founder of Subway. Moreover, Subway has adopted Autocratic style in
its business. It is one of the leadership styles in which leader take a decision on their own without
consulting with its staff. The frontrunners have to take speedy decision deprived of stand anxiety
for the furtherance of the business therefore; the Subway has adopted such a method. At the
situation of complaining by the consumers regarding the service or food, or any other
communication then it moves to the supervisor. The leader has the control to alter the trials
instantly for better outcomes as well as the smooth running of the business in an efficient
manner. Such autocratic style gives freedom to the manager to take a decision on their own
without consulting with its subordinates (Nging and Yazdanifard, 2015).
The leadership style of the Subway is beneficial for them to a certain extent. It helps in taking
quick decision by the manager without discussing with its subordinates. It provides the feature f
quick decision making in the organization that satisfy the consumers more efficiently and
effectively. Therefore, such method suits the culture of the Subway efficiently. However, such a
method also increases pressure for higher authority in making the decision every point and also
enhances the level of demotivation among the employees. The employees are not authorized to
deal with the issues that make them invaluable in the business. They only work for earning they
have no more work that helps in enhancing the leadership skills among them. Such demotivation
enhanced by the employee turnover ratio in Subway that is one of the main challenges that
Subway is facing with such leadership style.

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Conclusion
From the above analysis, it can be concluded that one of the leading fast food chain Subway has
also expanded its business in Singapore to earn maximum profit from such a market. However,
due to high competition in the market, the company was not able to grow in such a market more
efficiently than it was expected. The major competitors of Subway are McDonald's. It has a
cover a wide range of consumers towards its product that made them competitive in the market.
Still, Subway can able to survive in the market by adopting the differentiation method in its
business. They cater healthy food and provide the facility to the consumers to select its own
vegetable that made them unique from the service of its competitors. Subway has also adopted
the franchise method to enlarge its trade in the global market. It helps them to cover maximum
cities without investing a huge amount in such activities. Therefore, such strategies made
Subway competitive in the market. Furthermore, Subway has adopted Autocratic leadership style
in its business that makes them benefited to be certain extent. They can able to take quick
decision however, the employees feel demotivated from such leadership style. Hence, it can be
concluded that Subway has grown in Singapore market in an efficient manner; they have certain
challenges that are required for them to focus on such an issue to grow further.

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