Food & Beverage Management: Subway's UK Business Strategy

This report provides a comprehensive analysis of Subway's business plan for entering the food and beverage industry in the United Kingdom. It begins with an executive summary and table of contents, followed by an introduction emphasizing the importance of innovation for sustained business growth. The report details the business plan, including clear aims such as acquiring market share and achieving profitability, along with a vision statement focused on customer relationships. It evaluates the competitive landscape, highlighting the impact of Brexit and the advantages of Subway's franchise model. The report also covers product concept, development, and marketing strategies, considering consumer trends like demand for natural ingredients and timely service. It addresses branding and theming, recommending a health-oriented marketing approach. The report also delves into the design of a new food and beverage management system, encompassing food production methods, service quality, menu costing, and pricing techniques, as well as sales promotion strategies. Planning and operational management issues, including service sequence, training, and customer service, are discussed. Finally, the report considers current legislation awareness and concludes with a summary of findings and recommendations. References are included to support the analysis.

Running head: FOOD AND BEVERAGE MANAGEMENT
Food and Beverage Management
[Subway, United Kingdom]
Name of the student:
Name of the university:
Author note:

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Executive summary
The paper covers a very basic and essential guide to incept a new business concept in already
existing brand. The assignment covers the essential element that all are needed to incept a
new business concept. The study has shown that Subway is a very innovative company that
has a very unlike business strategies. It believes in working through the different franchise.
Such an innovative approach has helped the company in minting such a huge task. Moreover,
the paper has shown that the introduction of food & beverage products in the different stores
of Subway might be a success if it uses the fundamentals of strategic management.

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Table of Contents
1. Introduction................................................................................................................................. 3
2. Business plan with the chosen organisation................................................................................. 4
2.1 Clear aims.............................................................................................................................. 4
Vision statement.......................................................................................................................... 4
2.2 Clear evaluation of competition............................................................................................. 4
2.3 Product concept, development and marketing.......................................................................6
2.4 Consumer trends.................................................................................................................... 7
2.5 Branding & theming of proposed food & beverage services & products..............................7
3. Design of the new food & beverage management system incorporating.....................................9
3.1 Food production methods...................................................................................................... 9
3.2 Service & quality................................................................................................................... 9
3.3 Menu costing & budgeting.................................................................................................... 9
3.4 Pricing techniques................................................................................................................. 9
3.5 Sales promotion................................................................................................................... 10
4. Planning and operational management issues............................................................................10
4.1 Service sequence................................................................................................................. 10
4.2 Training............................................................................................................................... 10
4.3 Customer service................................................................................................................. 10
5. Current legislation awareness.................................................................................................... 11
6. Conclusion................................................................................................................................. 11
References..................................................................................................................................... 12

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1. Introduction
Innovation in business is very necessary to maintain a progressive revenue graph and
to have multi sectors to have a larger customer base. A larger customer base with the help of
different business sectors would therefore mean a widened area to experiment with different
products and services. It not only give chances for minting success in some other than the
existing sectors but also provides an elevated revenue graph for the firms (Ngo and O'cass
2013). Subway is one of such names that need a continuous innovation to script more success
story into its credit and to have a sustained business in future. This is rightly so because the
company has already proved its worth ever since its inception in the year 1965 in the United
States of America. The company has minted success with its traditional offerings in more
than 100 countries and with more than 44 thousand restaurant stores. They have been
excellent in advertising stunts as well as in following the regional beliefs in food related
things such as in meat (Lichtenberg 2012). Despite those facts, a progressive business trend is
mandatory for adding more feathers into the success story. Nevertheless, that can only be
possible if the company considers innovative thoughts in its business or else it might face
some unexpected fate, which may not be favourable for a sustained business.
The assignment would thus focus on the food and beverage industry as an innovative
step for Subway in the United Kingdom. This is because the chosen industry has had
experienced a comparatively more success than any other industries in the United Kingdom
ever since 2008 (Cushmanwakefield.co.uk 2017). Number of restaurants has already entered
into the industry to get the available benefits. However, this might also be risky as well
because of the political and the economic uncertainty in UK post Brexit (Dhingra et al. 2016).

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The main purpose of this assignment is to analyse it critically the fate of new business plan
for Subway in the food and beverage industry in the United Kingdom.
2. Business plan with the chosen organisation
2.1 Clear aims
With this new business plan, the Subway Company has the following aims:
 Availing the benefits present in the food and beverage industry in UK through the
exploration of innovative business strategies and marketing stunts
 Acquiring 3-5% of market shares by the end of 2020
 Making a profit of around 5% by the end of 2020
Vision statement
 To be the number#1 Quick Service Restaurant (QSR) franchise at the global level
without spoiling the delivery of fresh, delicious and exceptional experiences
(subway.com 2017)
 To build the business relationship with the customers and the communities to form a
family (subway.com 2017)
2.2 Clear evaluation of competition
The competition was very high in the food and beverage industry in the United
Kingdom; however, it has now become fiercer because of the Brexit effect. The Brexit effect
has weakened the UK pound, which is why many international markets are now getting
attracted towards British products. On the other hand, the price of food is continually
witnessing a rise due to the costlier imported raw materials. Furthermore, consumers are
likely to witness the rise effect in the coming time (Bdo.co.uk 2017). In such scenario, the

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Subway Company would have the following types of competition in the food and beverage
industry:
 To offer the cheaper prices to the buyers in the international market
 To be among the few leading companies that offers the cheapest prices for food
related products despite the costlier imported raw materials
Time would only tell the fate for the company in the food and beverage industry; however,
the innovation that has benefitted it in the past might also work here again. One of such
innovation is working with the franchise. It is a surprising fact that it has more than 44
thousand stores across many international markets; however, it does not own a single
restaurant store (Lichtenberg 2012). Working through franchise supplies solutions to many
operational related issues such as staffing issues, capital worries, lack of innovation and many
others like such. This has probably helped Subway in minting the success it had until the date
(Gillis and Castrogiovanni 2012).
Franchise those who buy the business, they invest a significant amount in the process.
This is for such reason they put extra cares on the business in order to be competitive in their
respective local market. In course of doing so, those franchises give their utmost effort in
recruiting skilled professionals, so that, they could help franchises achieve their target.
Another benefit of operating through franchises is the use of innovation, which the
franchises would use to attract their specific local market. They understand their local market,
which also helps them in picking up the best innovative strategy to be competitive. The
adjustment with the different regional beliefs attached to the food products such as with
meats is the one such example of innovation (Lee et al. 2015).
Working with the help of different franchise would definitely help Subway in their
new venture in the food and beverage industry. This would help the company in getting much

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deeper with the local preferences related with the choice of products and the buying
capabilities. Nevertheless, this is comparatively challenging while being the owner of the
different stores in the different parts of world. One of such challenge would be to plan it
strategically the entire business from making investments to recruiting the professionals.
2.3 Product concept, development and marketing
Product concept is a strategy to penetrate the market and to continue the penetration
with the upgraded version of the existing product (Nikander, Liikkanen and Laakso 2013).
Different companies have struggled to align their innovative thoughts in their production line
because of a rapidly changing demand of customers. Subway on the other hand has the edge
because it operates through franchises, which are comparatively more efficient in aligning
innovations with the products. Price competition has also been enlarged ever since the Brexit,
which has put ample of pressure on the different companies. However, Subway here again
would have the edge because it saves much on various operational related costs such as
recruiting the professionals. The different franchises of the company do recruit the
professionals according to their needs. They are also able to save on their expenditures on the
recruitment process, as they understand the local talents more.
Product development is a complete process that includes every essential strategy
such as product concept, its production, product’s marketing & branding, customer service
etc (Ernst, Hoyer and Rübsaamen 2013). This is a very vital sector especially when Subway
is switching over to a potential yet a new concept. The concept is challenging in UK because
of the after effect of Brexit in the country. The political and economic impact of Brexit is
uncertain which is why it is very challenging to maintain a profitable business venture in such
circumstances. Some of the imported raw materials are costlier, which might affect the final
costing of the products (Busch and Matthes 2016). It is highly advisable in such situations
that Subway use the utmost innovation to be both cost effective and quality oriented as well.

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2.4 Consumer trends
There are following few trends that are popular with the customers in the food and beverage
industry:
 Demand for natural essence is the one requirement, which is picking in demand in
nowadays. People now prefer drinks and foods made of natural resources. They are
now more educated in this regards mainly because of government circulars on
sustainability issues, available contents on the internet and few others (Diepeveen et
al. 2013).
 Delivering foods and drinks on time is another trend, which customers need today.
Those firms get a larger recognition that is capable in delivering foods and drinks on
time (Tsekouropoulos et al. 2012).
 Enjoying at night before going to the bed is the other trend, which is increasingly
becoming popular with the passage of time. People look for having drinks and foods
in restaurants at night, so that, they could have a relaxed night sleep (Ehsan 2012). In
such situations, firms with significant number of skilled employees working in the
night shift would justify their viability in the changing trend.
 Healthy foods and drinks have also become a much talked topic amongst the common
customers. People nowadays are comparatively more educated in health related
aspects. The different government circulars and the available online contents have
both educated a mass people on health related aspects (Marteau, Hollands and
Fletcher 2012).
2.5 Branding & theming of proposed food & beverage services & products
Branding of a new business concept is a challenging task. Subway being an
innovative Company might also face the challenge. However, a smart marketing strategy
might work well for the company. Numerous fast food companies have targeted more to the

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kids and the teenagers. This is because they are the groups that have high addiction to view
the advertisements on the different media channels. Subway should also target the kids and
the teenagers in their start up part of business. Kids and teenagers are potential customers of
foods and beverages (Boyland et al. 2012). However, they should also be cautious with the
contents they use in their products. This would be necessary for Subway that it shows heath
concerns in its products. This will actually protect the company from criticising activities,
which is very necessary at the start of the business. Branding can also be done with the help
of customer service. Subway needs to train its employees on the highest standard of customer
service. Nevertheless, the trained professionals need to be monitored on a regular basis in
order to evaluate the success of training program. This can be done in numerous ways such as
by asking for feedbacks from the customers.
The theme for the marketing of the products should be health oriented. In this regard,
the following theme would be really helpful:
“Eat & Drink Fresh, Live Healthy”
This would communicate the sustainability related concerns of the company, which is very
important at present times. Nevertheless, Subway has efficiently managed the same trend in
past as well but with the different product line. Maintaining the same with a wider range of
food and drink products would be a real challenge. The Brexit effect will also test the fate as
it has already indicated a surge in product pricing, which further means offering a healthy yet
attractive products at the cheapest pricing would be a real challenge (Minford 2016).

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3. Design of the new food & beverage management system incorporating
3.1 Food production methods
There are various methods of food production; however, the Brexit effect has caused
enormous pressure on the political and economic fate. In such situation, it is highly advisable
to go with the locally available ingredients. This further means the company should focus on
producing the foods locally, which comprises of all the processes such as production,
processing, distribution and consumption (FoodInsight.org 2017).
3.2 Service & quality
Quality of the food can be maintained by making relations with the localised
suppliers. Management can also work with the local suppliers on a rating based strategy,
which would give ratings to the different suppliers based on the quality of materials they
supply. This will ensure a quality product from the local suppliers. As far as service is
concerned, customers will be entertained with skilled attendees at its different stores.
Additionally, they will also be given opportunity to rate the products offered to them.
Nevertheless, their feedbacks will be implemented to the maximum level of feasibility (Wu,
Huang and Chou 2014).
3.3 Menu costing & budgeting
3.4 Pricing techniques
Pricing techniques will be as per the industry rules; however, the price will be high at
the time when the demands are high. On a same note, the price will be low when the demand
is low.

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3.5 Sales promotion
There are various modes of promotion that are popular nowadays; however, it is better
to stick with the advertisement. Advertisement can be in the popular newspapers or it can also
be on TV during popular daily TV soaps (Belch et al. 2014).
4. Planning and operational management issues
4.1 Service sequence
Service sequence for the foods & beverage products will be as follows:
1. Displaying the products in an organised way
2. Attending the customers with the help of floor sales officers
3. Educating the customers on their queries
4. Guiding them to the ways involved in making the final payment
5. Greeting the customers with thank you notes
4.2 Training
This is very important as a new service will require an utmost customer service from
Subway. Training will be required to educate the marketing personnel on advertising the
concept appropriately in the market. Training will also be required to the floor sales officers
those who all will be deployed for caring the customer queuing in its different stores for the
food & beverage products (Elnaga and Imran 2013).
4.3 Customer service
Customer service without any doubt is immensely required while interacting with the
customers in the different stores. An improved customer service will drag the customers into
their comfort zone, which is required to make the sale to happen. Customer service will also
help in score over the competitors (Jahanshani et al. 2014).

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5. Current legislation awareness
The different legislative guidance is immensely required in the food and beverage
industry at each of the different stage. From manufacturing to distributing and to presenting it
to the customers, it is important to care the necessary legislative guidelines in order to avoid
any serious consequences or any legal proceedings. Food safety related legislations are
important to follow. Moreover, the food & beverage industry needs to be in accordance to the
state government policies, so that; it does not affect the health of common people (Hawkes,
Jewell and Allen 2013).
6. Conclusion
The food and beverage business will be a good opportunity for Subway because of
many reasons such as the rising success of the industry in UK. The trend is suitable and so
the companies operational capabilities. It is an innovative company, which has already helped
the company gain gigantic success. The newly adopted concept can be a success to the
company if it stays competitive with necessary strategic management. Nevertheless, the
newly selected industry should be a worth option for the company.