Strategic Management: Reasons for Success and Crisis in Subway

This project analyzes the reasons for the success and crisis faced by Subway Restaurant Company and demonstrates various strategies that Subway should follow to regain market share.

Strategic
Management

Table of Contents
MAIN BODY.............................................................................................................................3
1. Analyse the reasons for success of Subway.......................................................................3
2. Identify the main causes for facing crisis over years in case study....................................4
3. Demonstrate various strategies that Subway should follow to regain market share..........6
CONCLUSION..........................................................................................................................7
RECOMMENDATIONS...........................................................................................................7
REFERENCES...........................................................................................................................8

INTRODUCTION
Management is the set of activities performed in an organisation with co-ordination of
workers by building employee relation to achieve success. The strategic management
involves formulation and implementation of planning, monitoring, analysis and assessment
within business to meet goals and desired objectives (Chang and Shim, 2015). It is essential
for an organisation to change their strategies in accordance with the intrinsic and extrinsic
factors of business environment for developing growth and stability in global market. This
project is based upon the case study of Subway Restaurant Company as being an American
privately held restaurant franchise that primary sells submarine sandwiches and salads. This
project analyse the various reasons for its success and crisis which are described in case
study. Additionally, it demonstrates the various strategies of Subway that are to be followed
by business to regain market share.
MAIN BODY
1. Analyse the reasons for success of Subway
Strategic Management:- This is defined as the process through which a company
plan its strategic marketing plan and various other strategies to compete with its rivalries in
order to sustain in global market. Managers of Subway mainly focus on developing their
competitive strategies through developing intrinsic strength for controlling weakness and
extrinsic opportunities to overcome threats (Georgiev, 2017).
Subway Restaurant Company:-
Features Explanation
Vision The vision of Subway is to become Quick Service Restaurant
(QSR) franchise in the world, for delivering fresh, delicious
sandwiches and an exceptional experience.
Mission The mission of Subway is to provide a wide range of great
tasting, healthier food choices while reducing environmental
footprint and creating a positive influence in communities to
serve around the world.
Objectives The main purpose of Subway is to offer a wide range of tasty,
quick and healthy meals. Its aim is to supply healthier food
choices for fit and healthy lifestyle.
Background The Subway is an American privately held restaurant
franchise that primarily sells submarine sandwiches and
salads which is one of the fastest-growing franchises. It was
established in 28th August, 1965 at Milford, United States.
Key People The Chief Executive Officer of Subway is Trevor Haynes on
30th June, 2018.
Potential customers The potential customers for managers of Subway are
segregated on the basis of three types which are as follows:-
 Market Segmentation:- Managers of Subway
segments their whole target market into small group

by discriminating them in accordance with specific
demand.
 Target Market:- The managers of Subway targets
their customers by producing their dishes at least-
cost which attracts large number of people to
consume for enjoying its taste and preference.
 Market Positioning:- Managers of Subway promotes
and position their product or meal by supplying it
through direct and indirect channel of distribution.
Rivalries There are various rivalries of Subway Restaurant Company
which are Yum! Brand, McDonald, Starbucks, Panera Bread
Company, Jimmy John, etc. Some of these are explained as
under:-
 McDonald’s:- This organisation is an American fast
food company which was founded in 1940 and was
operated by Richard and Maurice McDonald in
California with the revenue of US $ 22.8 billion in
2017.
 Yum! Brands:- It is formerly Tricon Global
Restaurant as being an American fast food
corporation which is listed in Fortune 500. The Chief
Executive Officer is Greg Creed from 1st January,
2015 with the revenue of US $ 5.8 billion in 2017.
The various reasons for success of Subway are mentioned below as:-
 Supply health and nutritious food:- Managers of Subway are highly conscious in
supplying nutritious meal to their customers as they are health conscious. It is
essential to supply fit and healthy food in order to meet the demand of buyers by
providing them high level of satisfaction.
 Least-cost effective price:- The managers of Subway focus on producing their
products with least-cost as the motive to increase the sale by enlarging customers
which result in high profit-margin (Haines, 2016).
 High brand value:- Managers of Subway have the high brand value for being
capable to sell their food as Quick Service Restaurant (QSR) by offering nutritive
products.
 Foot-long sandwich:- The managers of Subway focus on selling the innovative dish
with 12 by 6 inches of bread sandwich in order to attract large number of customers
for increasing their sale. It creates opportunity for company to compete with its
rivalries through their competitive strategies.
2. Identify the main causes for facing crisis over years in case study
The various theories and models implemented by managers of Subway Restaurant
Company are explained as follows:-
SWOT Analysis:- This framework is a strategic planning technique implemented by
an organisation to analyse the strength, weakness, opportunities and threats from the various

factors of business activities. Managers of Subway apply the SWOT analysis as to examine
their competitive strategies which are capable in minimising their controllable and non-
controllable risk of company.
Strength (S) Weakness (W)
 It is the largest fast food restaurant
chain in whole world with high
number of outlets.
 The managers of Subway Restaurant
mostly adopt high marketing and
promoting strategies to sustain in
perfect competition market.
 The Subway Restaurant Company
consists of large number of employee
which is difficult to manage and build
relations among each other.
 It further lacks in providing services
to various stores and branches which
also lacks in building customer
relationship management (Kenny,
2017).
Opportunities (O) Threats (T)
 Nowadays, customers are more health
conscious which emphasize them to
purchase nutritious products at which
they are ready to pay high prices.
 The managers of Subway focus on
supplying their products or meals
through direct or indirect channel of
distribution with the help of
delivering intermediaries.
 The managers of Subway Restaurant
Company are adversely affected by
the change in taste and preference of
their customers as they are highly
concentrated towards healthy food.
 It has expanded business to various
locations and is not capable to supply
their meal everywhere.
The main causes for facing crisis over years are explained as:-
 Aggressive expansion:- The managers of Subway are adversely affected as they have
to face these consequences of expanding their business at large number of locations
which leads to increase their expense on high investment.
 Cannibalised sales:- Managers of Subway are unfavourably affected as they have to
face restriction in their sale for increasing the price of their product even though
similar substitutes are available in global market which tends to reduce sale.
 Branch disorganised:- The managers of Subway have aggressively expanded
business which creates problem of not able to organise it effectively in order to meet
the requirements of customers. This also lacks in developing customer relationship
management with producers and buyers.
 Disgruntled Franchisees:- Managers of Subway face the negative impact for high
conflicting interest between headquarters and franchisees. This also adversely impact
in breaking the license of franchise as well as managers lacks in supplying food to
them (Lange and Bundy, 2018).
 Consumer awareness:- The managers of Subway are highly affected by customers as
the change in taste and preference of buyers for purchasing the product. Nowadays,
end-users are health conscious which bounds them to consume fit and healthy
products.

3. Demonstrate various strategies that Subway should follow to regain market share
The various strategies that are must be adopted by Subway to reduce their problems
by implementing some solutions through these strategies in order to regain market share are:-
Market Strategy:- The market strategy refers as long-term approach for achieving
fundamental goal to increase competitive advantage of a company by understanding the
needs and wants of customers. Managers of Subway Restaurant Company focus on this as to
develop their goods and services with the motive of best profit making potential.
 Increase revenue by 10% in 2021:- The managers of Subway focus on increasing
their sale by developing good relations among headquarters and franchisees by
providing them rights to deal their activities with efficiency. It is the ability which
leads to build customer relationship management through supplying qualitative
products food for enhancing good health of customers. This increase in sale with their
support and loyalty to sustain in global market (Peleckis, 2015).
 Maximise profits by 15% in 2022:- The main purpose for managers of Subway is to
maximise profits by promoting and positioning their products to customers which
increase brand awareness in the mind of buyers. It is the ability of workers to develop
the finished goods through total quality management in order to fulfil the needs,
desire and wants of customers. This result in maximising revenue and profitability
ratios that leads to increase competitive strategies for competing with rivalries.
Market Tactics:- This is described as the strategic actions which direct in promotion
of product or services for influencing specific market goals. Managers of Subway have high-
level-ideas to develop their falls into tactics by solving those problems through restricting
errors with corrective measures. Some of these tactics are mentioned below:-
 Cognitive skills:- The managers of Subway have the high thinking skills which helps
to develop innovative idea through strategic decision making procedure for increasing
their competitive strategies. This leads to reduce the problem of improper
management of branch.
 Able to utilise scarce resource:- Managers of Subway focus on this solution as to
fully utilise their scarce resources in order to increase their intrinsic strength for
controlling weakness and extrinsic opportunities to overcome threats. This solution is
useful in solving the crisis of disgruntled franchises by building good relations
(Pisano, 2017).
Market Share:- This is the percentage of market accounted by a specific entity which
described the capability of an organisation to capture the market. Managers of Subway aim to
maximise their market share by emphasizing on some major concepts to compete with its
competitors.
The ability to improve market share:-
 Brand awareness:- The managers of Subway performs their actions with increasing
the brand awareness among their potential customers through encouraging them to

purchase their products. It is the solution for customer awareness by promoting and
positioning the brand in mind of buyers.
 Pricing strategy:- Managers of Subway focus on managing least-cost effective
products by attracting large number of customers to purchase the finished goods. This
is essential for managers to control the problem of cannibalised sales by supplying
goods with market penetration strategy (Roberts and Stockport, 2014).
 Develop nutritious food:- The managers of Subway focus on developing their
product with highly nutritious in order to increase their sale by recognising the health
consciousness of their customers. It is most important for managers to improve
product development in order to meet the needs, desire and wants of buyers.
CONCLUSION
From the above discussion it have been concluded that strategic marketing is very
essential for on organisation to develop its competitive strategies through modifying their
strategies to meet the demand of potential customers. This project describes the various
reasons of success and crisis faced by the industry of case study with the application of
SWOT Analysis. Apartly, it reveals various strategies of Subway that are to be followed by
business to regain market share through implementing various marketing strategy and tactics.
RECOMMENDATIONS
From the above mentioned project it is recommended that Subway Restaurant
Company must have ability to analyse their competitors in perfect competition. Its rivalries
are Yum! Brand, McDonald, Starbucks, Panera Bread Company, Jimmy John, etc. The
company must recognise the various strategies adopted by its rivalries to increase threats
which might affect stability or instability of organisation. It is essential for the business to
properly organise their expanded branches in order to sustain in global market by facilitating
equal rights and building good relations to among entrepreneurs and franchisees.

REFERENCES
Books and journal
Chang, S. J. and Shim, J., 2015. When does transitioning from family to professional
management improve firm performance?. Strategic Management Journal. 36(9).
pp.1297-1316.
Georgiev, M., 2017. The Role of the Balanced Scorecard as a tool of strategic management
and control. Journal of Innovations and Sustainability. 3(2). pp.31-63.
Haines, S., 2016. The systems thinking approach to strategic planning and management.
CRC Press.
Kenny, J., 2017. Excellence Theory and its Critics: A literature review critiquing Grunig’s
strategic management of public relations paradigm. Asia Pacific Public Relations
Journal. 17(2). pp.78-91.
Lange, D. and Bundy, J., 2018. The Association between Ethics and Stakeholder Theory',
Sustainability, Stakeholder Governance, and Corporate Social Responsibility
(Advances in Strategic Management, Volume 38). (pp. 365-387). Emerald
Publishing Limited.
Peleckis, K., 2015. Strategic management schools and business negotiation strategy of
company operations. Ekonomia Zarządzanie. 7(2).
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strategic choice, learning, and competition. Industrial and Corporate Change. 26(5).
pp. 747-762.
Roberts, N. and Stockport, G. J., 2014. Defining strategic flexibility. In The flexible
enterprise. (pp. 37-45). Springer, New Delhi.