McDonalds and Subway are two of the world's largest international fast food

restaurant chains. Each company possesses a strong brand and is an established name
in the casual eating restaurant industry. With 40,953 locations worldwide, Subway
beats out McDonald's as the largest global chain. McDonald's currently has 37,855
locations globally. So, what's behind this difference in global positioning? And, are
the differences meaningful beyond a number of restaurants? 

OWNERSHIP DETAILS
 
The most important general difference between the two companies is that McDonald's
is a public company while Subway is privately owned. The common stock of
McDonald's is listed on the New York Stock Exchange and it has been included in
the Dow Jones Industrial Average (DJIA) since 1985 due to its market
capitalization and its position in the industry. In contrast, Subway is owned and
operated by the private company Doctors' Associates Incorporated. 
The McDonald's brand is much more valuable than that of Subway despite both
companies ranked among the world's most valuable brands, according to Forbes, up to
2018, when Subway was dropped from the list. Regular, open publication of the
company's financials improves its access to capital which, in turn, provides more
opportunities to strengthen the company's brand, a key factor behind its continued
strong financial results. So, it seems that brand value alone does not explain the
difference between the chain size of the two companies.
 
INVESTMENT AND CAPITAL RESOURCES 
 
For established companies such as McDonald's and Subway, franchising is one way to
expand rapidly with minimal risk to the parent company. Both companies use
franchising in their business models but to different extents. All Subway stores are
franchised. The company itself does not own any Subway restaurants. McDonald's
owns about 20% of its restaurants, with the remaining 80% owned and operated by
independent franchisees. 
Expertise gained from operating company-owned outlets enables parent companies to
improve the operating standards of the whole franchise chain. At the same time, the
existence of company-owned stores in McDonald's business structure places certain
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restrictions on its expansion capabilities. For example, a conventional franchise
agreement supposes that the parent company owns the land and the building or
secures long-term leases for its restaurants. This requires more capital, which can
limit the ability for expansion at the rate of other chains, like Subway.

FEE STRUCTURES
We have already discussed that the business models of both companies are focused on
franchising. A franchise license is an authorization granted by a company to an
individual that enables the franchisee to maintain control over purchasing,
employment, pricing, and marketing decisions. To secure a franchise license, the
franchisee pays a set of fees to the parent company. The franchise fees to open a new
McDonald's restaurant are much greater than that of a Subway restaurant.
The total investment needed to open a new McDonald's restaurant ranges from
$1,215,000 to $1,945,000 plus an initial fee of $45,000, while the opening costs of a
new Subway range from $116,000 to $263,000 with an initial fee of $15,000. Thus,
Subway is much more affordable for small entrepreneurs.

GEOGRAPHIC SEGMENTS
While the preceding factors speak to why the number of Subway locations exceeds
that of McDonald's, the data reveals that McDonald's, with stores in 113 countries,
has a broader geographic representation than Subway, which has stores in 107
countries. In addition, in some countries, the number of McDonald's restaurants
exceeds that of Subway, particularly in China and Japan as well as Europe and South
America. Subway, in turn, dominates in Australia, India, and the United Kingdom as
well as North and Central America. The United States is the single largest market
segment for both companies.

2
 
 

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MCDONALD’S

PRICES

The following is a shortlist of some of the most popular meals at McDonald’s and their
corresponding prices in California: Big Mac – $5.11, Quarter Pounder with Cheese – $3.69$, Filet-
O-Fish – $4.85, McChicken – $1.65, and 20 Pc. Chicken Nuggets – $6.40 (Fast Food Menu
Prices, McDonald’s par.1).

SERVICE

According to a recent study that evaluated the comparative performance of the most popular fast-
food restaurants in the United States, McDonald’s scored the highest on the overall service scale
(Min and Min 286). The results of the study revealed that customers perceived McDonald’s as a
leader in the following categories: location, amenity, operating hours, and service response time
(Min and Min 286).

The healthiness of Food Items

A study of the purchasing behavior of adolescents 12 to 21 years of age showed that the sandwich
purchased at McDonald’s contained 572 calories on average (Lesser et al. 443). Soft drinks in
McDonald’s averaged 151 calories (Lesser et al. 443). The participants obtained 36 grams of
sugar on average from the total meal in McDonald’s (Lesser et al. 443).

SUBWAY

PRICES

The following is a list of popular Subway menu items in California and their corresponding prices:
Subway Club – $9.92, Tuna Sub – $8.64, Black Forest Ham – $7.04, Veggie Delite Sub – $7.04,
and Pizza Sub with Cheese – $7.68 (Fast Food Menu Prices Subway par. 1). It is clear that
McDonald’s offers lower prices than Subway for comparable food items.

Service

Even though the study conducted by Min and Min revealed that McDonald’s ranked highest on the
overall service scale, Subway was the leader in the following categories: cleanliness, employee
courtesy, healthy food, a variety of food, safety, and reputation (286). However, the findings of the
research showed that Subway fell behind McDonald’s and was ranked third best fast food
restaurant chain with respect to overall quality of its services (Min and Min 286).

HEALTHINESS OF FOOD ITEMS

The results of the study conducted by Lesser et al. revealed that the sandwich at
Subway contained 784 calories on average while a similar menu item at McDonald’s
had only 572 calories (Lesser et al. 443). It means that the sandwich in Subway
contributed more calories thereby making it less healthy. However, soft drinks in
Subway averaged only 61 calories while McDonald’s offered drinks containing 151
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calories on average (Lesser et al. 443). Moreover, the adolescents participating in the
study obtained 36 grams of sugar from the total meal at Subway and almost 55 grams
of sugar at McDonald’s (Lesser et al. 443). Therefore, it is safe to conclude

CONCLUSION

The comparative analysis of the two fast food restaurant chains showed that both of
them have similar food items in terms of their healthiness. However, McDonald’s is
the price and service leader.

WORKS CITED

Fast Food Menu Prices. McDonald’s Prices. 2016.

— (n.d.). Subway Prices. 2016.

Lesser, Leonard, Karen Kayekjian, Paz Velasquez, Chi-Hong Tseng and Deborah
Cohen. “Adolescent Purchasing Behavior at McDonald’s and Subway.” Journal of
Adolescent Health 53.4 (2013): 441-445. Print.

Min, Hokey and Hyesung Min. “Benchmarking the Service Quality of Fast‐Food
Restaurant Franchises in the USA.” Benchmarking: An International Journal, 18.2
(2011): 282-300. Print.

that McDonald’s offers slightly less healthy food in terms of sugar and calories than
Subway.

SUBWAY STATISTICS

Subway is now officially the largest restaurant chain in the world. The company passed
McDonald's in the United States in 2002 but it has now passed it worldwide.
Subway had 33,749 restaurants worldwide at the end of last year, according to company
reports, and McDonald's Corp. had 32,737. McDonald's still leads in revenue, $24 billion last
year to Subway's $15.2 billion.
But the sub sandwich chain keeps adding more locations. One of Subway's advantages is that
it can go almost anywhere, said spokesman Les Winograd.
"We don't have any real requirements as far as space, it's minimal as far as equipment," he
said. "We're in convenience stores, movie theaters, car dealerships."
Among the 295 stores in the district that stretches from St. Augustine into Middle Georgia are
two stores in ShandsHealthcare in Gainesville, one at the in the Trane air-conditioning plant
in Vidalia, Ga., and a seasonal restaurant at the Splash Water Park in Nocatee. Subway has a
franchise fee of $15,000, and Winograd said the total startup costs for a new
restaurant range from $84,000 to about $280,000, depending on size and location.

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By contrast, the McDonald's website says that company's new restaurants charge a
franchise fee of $1,012,200 to $1,840,000 with owners required to pay 40 percent of
the cost in cash and able to finance the rest.
Rich Dillon, director of operations for Subway Management Group, which owns 12
Subways in Jacksonville, said his company spends about $180,000 to open a new
location.
The company is in the process of building a new one at Dunn Avenue and New Kings
Road that will open in about six weeks.
His company's stores average eight to 12 employees, take in $8,000 to $12,000 in
gross per week and take about three years to turn a profit.
Dillon said stores in his company are seeing a 17-18 percent increase in revenue over
the same time last year, in part due to the addition of breakfast.
Winograd said the simple equipment keeps cost and space down.
There's no fryer, with its expensive exhaust system, and the meat arrives already
sliced. Subway's home state of Connecticut requires that anyone operating an electric
slicer be at least 21 years old.
"Slicers are a huge safety issue," Winograd said. "That allows us to hire high school
kids."
Even adding breakfast didn't require additional equipment. Eggs come precooked and
frozen and are heated in the oven.
A report last year by CNNMoney.com analyzing loan data from the Small Business
Administration found that 7 percent of the 2,300 loans made to Subway franchisees
between 2000 and 2009 defaulted.
Competing sub chain Quiznos had a failure rate of 25 percent.
Chris Gentry, director of operations for Southeast Subway Development, which
oversees but doesn't own the 295 Subways in North Florida and South Georgia, said
that none have failed in recent years.
About 15 new stores opened in the region last year, he said, "But it's getting harder
and harder to find new locations."

McDonald’s is a quick service restaurant (QSR) chain based in the United States. It
was founded in California in 1940 by brothers Richard and Maurice McDonald.
Eventually, it was transformed by a production line system that rolled out burgers in a
quick service style. This was the start of the company’s “McDonaldization”, a phrase
coined by sociologist George Ritzer, meaning that the company prioritized efficiency,
calculability, predictability, standardization, and control. Today, this type of system is
not only used in many QSRs but also for a variety of other institutions and
organizations. Ultimately, this method of operating has allowed McDonald's golden
arches to become a familiar spectacle in towns and cities all over the world. In 2020,
there were a total of 39.1 thousand McDonald’s restaurants globally a figure that has
grown year-over-year for the past decade.

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McDonald's was their first barbecue restaurant and situated at San Bernardino,
California, in the United States on May 15, 1940.

McDonald brothers rebranded the restaurant and also introduced the "Speedee

Service System" in 1948.

Also, in 1948, McDonald's started selling cheeseburgers and hamburgers to its

Customers.

The McDonald brothers purchased appliances from Ray Kroc to fast track the
activities of their hamburger restaurant. This ended the services of waiters and
waitresses in the McDonald's restaurant.

Ray Kroc, a franchise businessman, became a partner to the McDonald brothers in

their fast-food chain company on April 15, 1955. Ray Kroc paid for equity to join the
company. The equity purchases by Kroc covers the global branding of the company.
Both McDonald brothers and Ray Kroc later had a dispute about the control of their
business activities.

On May 4, 1961, the fast-food company applied to get a U.S trademark with its
name "McDonald's" and "m" as the new trademark logo. Also, in 1961, the
McDonald brothers were bought out by the McDonald's corporation.

In 1962, the tall golden yellow arches became the global mascot for the fast-food
company.

By 1965, a mascot clown called Ronal McDonald was unleashed to advertise their

fastfood services to the target audience like children.

In 1966, McDonald's has introduced milkshakes and fries to their menu list. It also
introduced the Filet-O-Fish sandwich as the first item included in its national menu.

By 1968, hot apple pie and The Bic Mac was introduced by McDonald's.

In 1970, McDonald's included Shamrock Shakes as part of their offers on St. Patrick's

Day.

In 1973, the fast-food company included Quarter-Pounded to its national menu list.

Also, McDonald added Egg McMuffin to their menu list in 1975. Herb Peterson
created the Egg McMuffin.

In 1979, McDonald's introduced Happy Meals, while Chicken McNuggets was added

to its menu list in 1983.

In 1988, McDonald's has recorded an estimated 10,000 restaurants globally.

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INTRODUCTION

CHAPTER 1
INTRODUCTION

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  INTRODUCTION OF PROJECT –

Subway is an American privately-held restaurant franchise that primarily

sells submarine sandwiches (subs) and salads. It is one of the fastest-growing
franchises in the world and, as of October 2019, had 41,512 locations in more than
100 countries. More than half its locations (23,928 or 57.6%) are in the United
States. It also is the largest single-brand restaurant chain, and the largest restaurant
operator, in the world.

Why is it called Subway? Originally named for Dr. Peter Buck, Pete's Super

Submarines became “Pete's Subway” in 1966 and two years later was known simply
as “Subway.”

As of 2017, the Subway Group of companies was organized as follows:

 Subway IP Inc. is the owner of the intellectual property for the restaurant system.
 Franchise World Headquarters, LLC leads franchising operations. FWH
Technologies, LLC owns and licenses Subway's point of sale software.
 Franchisors include Doctor's Associates Inc. in the U.S.; Subway International
B.V.; Subway Franchise Systems of Canada, Ltd.; etc.
 Advertising affiliates include Subway Franchisee Advertising Fund Trust, Ltd.;
Subway Franchisee Advertising Fund Trust, B.V.; Subway Franchisee Canadian
Advertising Trust; etc.

Subway's international headquarters are in Milford, Connecticut, with five regional

center’s supporting the company's international operations. The regional offices for
European franchises are located in Amsterdam (Netherlands); the Australian and New
Zealand locations are supported from Brisbane (Australia); the Asian locations are
supported from offices in Beirut (Lebanon) and Singapore; and the Latin American
support center is in Miami

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OBJECTIVE OF THE STUDY –

1. Importance of objectives -
The objective of Subway, to bring customers into the stores and keep them coming
back, is quite straight-forward. However, by setting this objective, many aspects of
the organizations are affected. In order to bring customers into the stores, the shop
should be clean and well advertised. To have them coming back, the store's food and
service should be of good quality. 
Since Subway is a franchise company, its franchisees will work hard to improve their
service and food so they can achieve the objective. Also, Subway as a whole
organization will work hard to improve its menus or advertise their sandwiches in
order to achieve the objective. 
Since the objective directly relates to the profit of the organization, it is very
important.

2. Role of the Mission Statement -

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(Delight every customer so they want to tell their friends - with great value through
fresh, delicious, made-to-order sandwiches, and an exceptional experience.)
Subway's mission statement is very simple and straight-forward as well. However, it
contains all the necessary elements that Subway desires to acquire. By looking at the
mission statement, one can know what to provide the customers with. "Delighting"
every customer would directly come from good service, and when the service is very
good, "[customers] will want to tell their friends". The "fresh, delicious, made-to-
order" part explains how the sandwiches should be. This provides Subway's
franchisees of a rough guideline of making the sandwiches. The part about an
"exceptional experience" is interesting, because it does not state what kind of an

experience it is talking about. This could be interpreted differently for different

people. Some can think the experience is the taste, and some might think it is the
service. This is a great strategy, because each franchisees will have a slightly different
interpretation of the mission statement, eventually having them provide slightly
different services. 
The mission statement also is deeply related to the objective, as achieving the mission
statement will mean achieving the objective.  

3. Relationship between aims, strategic objectives and operational objectives -

Aims are the finalized and abstract goals of a company. Strategic objectives are
shorter term goals that are more specific than aims, but still longer term and abstract
than operational objectives. 
In Subway's case, their aim is to be the number 1 Quick Service Restaurant franchise
in the world. Their strategic objectives are to build good company reputations and
have a wider customer range, while their operational objectives are to make their food
healthier, or to construct a wider range of menu.
Operational objectives support strategic objectives, while strategic objectives support
aims. These goals should not go against each other, and should benefit each other.

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  SIGNIFICANCE OF THE STUDY–

Subway's core product is the submarine sandwich (or "sub"). In addition to these, the

chain also sells wraps, salad, paninis, and baked goods (including cookies, doughnuts,
and muffins).

Subway's best-selling sandwich,[28] the B.M.T. (short for "Biggest, Meatiest,

Tastiest"), contains pepperoni, salami, and ham. The name originally stood
for Brooklyn Manhattan Transit.

Subway also sells breakfast sandwiches, English muffins, and flatbread. In 2006,

"personal pizzas" debuted in some US markets. These are made to order (like the
subs) and heated for 85 seconds. Breakfast and pizza items are only available in some
stores. In November 2009, Subway signed a deal to serve exclusively Seattle's Best
Coffee coffee as part of its breakfast menu in the US.

A 2009 Zagat survey named Subway the best provider of "Healthy Options" (in the
"Mega Chain" category). Subway was also first in "Top Service" and "Most Popular"
rankings. It placed second in "Top Overall", behind Wendy's.

On April 18, 2017, Subway announced the addition of paninis to its menu. Chipotle
Steak & Cheese, Triple Cheese, Chicken Cordon Bleu, and Italian B.M.T. Melt were
the four variations announced.

On September 21, 2018, Subway debuted the Chipotle Cheesesteak sandwich for a
limited-time. Regional testing of a crispy chicken sandwich also began taking place in
Arkansas.

Regional variations

Subway's menu varies between countries, most significantly where there are religious
requirements relating to the meats served.In 2006, the first kosher Subway restaurant
in the United States opened, in a suburb of Cleveland, Ohio in the Mandel JCC of
Cleveland. Former Subway spokesman Jared Fogleattended the opening. A press
release stated, "With slight modifications, such as no pork-based products, and the use
of soy-based cheese product, the menu is virtually identical to that of any other
Subway restaurant." Other openings soon followed, briefly making Subway one of the
largest U.S. kosher restaurant chains. At their peak, twelve kosher Subway locations

12
were open in the U.S, including Kansas City and 5 in New York. As of 2011, only
five remained: in Cleveland, Miami, Los Angeles, and two stores
in Maryland. Franchisees who failed noted a lack of support from the parent location
in advertising, higher costs of kosher food and supervision, the inability to remain
open on Saturdays, and that customers who do not keep kosher prefer the original
menu and prices.

Subway opened its first restaurant in India in 2001 in New Delhi. In deference
to Hindu and Muslim beliefs, Subway restaurants in India do not
serve beef or pork products; on the other hand, the country's large number of
vegetarians has induced Subway's Indian outlets to offer a much extended range of
vegetarian options. As of January 2017 there were 591 Subway restaurants in 68
Indian cities. On September 4, 2012, Subway opened its first all-vegetarian outlet on
the campus of Lovely Professional University (LPU) in Jalandhar, Punjab. On March
6, 2013, Subway opened its second all-vegetarian outlet also offering Jain food
in Paldi, Ahmedabad.

Nutritional content

In 2011, Subway introduced gluten-free bread and brownies to some locations in

Texas. It also cut the salt content of its sandwiches by 15 percent in 2011. In the
United Kingdom and Ireland, Subway has reduced salt content across its entire range
by 33% and has committed to further reductions, in line with government targets.
Subway's range of "Low Fat" subs is endorsed by the charity Heart Research UK.

13
 INDUSTRY PROFILE

Subway is owned and operated by Doctor's Associates. The company doesn't own a
single location, but collects 8% of revenue from each franchise. Fred DeLuca
borrowed $1,000 from family friend Peter Buck, to open his first sandwich shop in
Bridgeport, Conn. in 1965. Today there are more Subways than any other restaurant
brand with 43,600 stores in more than 100 countries. Foot traffic in restaurants has
declined in recent years resulting in more than 1,000 franchise closures over the past
12 months. DeLuca oversaw day-to-dayoperations of the company until he died in
2015. Buck and DeLuca's heirs each own 50% of the company. The brand controls
60% of the quick-service sandwich market in the U.S. Subway has a robust social
community with more than 25 million Facebook fans.

In 1965, Fred DeLuca borrowed $1,000 from friend Peter Buck to start "Pete's Super

Submarines" in Bridgeport, Connecticut, and in the following year, they formed
Doctor's Associates Inc. to oversee operations of the restaurants as the franchise
expanded.The holding company derives its name from DeLuca's goal to earn enough
from the business to pay tuition for medical school, as well as Buck's having a
doctorate in physics. Doctor's Associates is not affiliated with, nor endorsed by, any
medical organization. In 1968, the sandwich shop was renamed "Subway".

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The first Subway on the West Coast was opened in Fresno, California, in 1978. The
first Subway outside of North America opened in Bahrain in December 1984.The first
Subway in the United Kingdom was opened in Brighton in 1996.In 2004, Subway
began opening stores in Walmart supercenters and surpassed the number
of McDonald's locations inside U.S. Walmart stores in 2007.

Since 2007, Subway has consistently ranked in Entrepreneur magazine's Top 500

Franchises list. In 2015, it ranked #3 on the "Top Global Franchises" list and #1 as the
"Fastest Growing Franchise". At the end of 2010, Subway became the largest fast
food chain worldwide, with 33,749 restaurants – 1,012 more than McDonald's.

In January 2015, Suzanne Greco became president and CEO after her brother Fred
DeLuca, the company’s first CEO, died of leukemia in September 2015 after being ill
for two years.

In 2016, Subway closed hundreds of restaurants in the U.S., experiencing a net loss in
locations for the first time. However, with 26,744 locations, it remained the most
ubiquitous restaurant chain in the U.S. (with McDonald's in the #2 spot).

Also in 2016, Subway announced a new logo for the franchise, to be implemented in
2017.On July 17, 2017, Subway unveiled redesigned restaurants, dubbed "Fresh
Forward." Features include self-order kiosks; USB charging ports at tables; and new
menu items, including additional condiments, and bread made without gluten. The
company is piloting the changes at 12 locations across the United States, Canada, and
the United Kingdom, with many features expected to be implemented into stores
worldwide by the end of 2017.

15
16
 COMPANY PROFILE

 NAME,ADDRESS AND LOCATION OF THE COMPANY -

Trade name Subway

Formerly Pete's Super Submarines

(1965–1968)

Type Private

Industry Restaurants

Genre Fast food

Founded August 28, 1965; 54 years

ago, Bridgeport, Connecticut, U.S.

 Fred DeLuca
Founders
 Peter Buck

Headquarters Milford, Connecticut

,
U.S.

Number of 41,512 restaurants in more than 100

locations countries[1]

Key people John Chidsey, CEO[2]

Products  Submarine sandwiches

 Pizzas (some locations)
 Salads

Owner DeLuca family

Website subway.com

 VISION AND MISSION –

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 1. Mission Statement –

Subway’s mission statement is “to be the world’s favorite destination for discovering
great value and unique selection.” The mission statement underlines the resolve of
Subway to go out of its way to create a reputation that keeps bringing its customers
back for more. The statement comprises the following main points:

1. Improving health

2. Reasonable prices

3. Unique selection

To satisfy the first point, Subway promotes a practice that prioritizes on nutritional
values and hygiene for its food items rather than quantity. The company considers this
a major business strategy that would, in turn, make Subway a favorite for all. It relates
to the second point where Subway offers all its salads and submarine sandwiches at
the best and attractive prices to ensure they are not only affordable but also creates a
sense of value to the customers considering the nutrition quality attached to them. The
best part of this mission statement is that there is a whole lot of different sandwich
styles and preferences for the customers to choose from.

2. Vision Statement –

Subway’s vision statement is “be the #1 Quick Service Restaurant (QSR) franchise in
the world, while delivering fresh, delicious sandwiches and an exceptional
experience.” The emphasis is on the legacy the company can create in the industry. It
has the following elements.

1. #1 QSR in the world

2. Fresh, delicious sandwiches and an exceptional experience

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Being at the top of the game is a normal practice at Subway as a requisite for being
the best not only locally in the U.S. but also at the global level. The company
complements this effort by ensuring that it only serves the best dishes. Additionally, it
takes its game a notch higher by accompanying its products with customer-specific
services for a distinctive experience.

 HISTORY OF THE COMPANY –

 This History of Subway and A Look at Their Logo Design -

Combining the appeal of fresh, healthy menu items with the speed and
convenience of fast food, the restaurant chain Subway has exploded into
international success, bringing in $11.3 billion in 2016 from US sales alone.
While much of Subway’s success is no doubt due to their menu and the near
limitless sandwich combinations it provides, there’s a lot to be said for the
sandwich chain’s marketing as well. In this article, we’ll take a look at how
Subway got to where it is today and the role that their recognizable logo has
played in their marketing success.

 Origins of Subway –

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1. The history of Subway started in 1965 when Fred DeLuca borrowed $1,000
from a friend named Peter Buck in order to fund the opening of a sandwich
shop in Bridgeport, Connecticut called Pete’s Super Submarines. A year later,
the two formed a holding company to oversee the expansion of their restaurant
named Doctor’s Associates – a name derived from DeLuca’s desire to make
enough off the restaurant to fund his medical school tuition. By 1968, the two
men changed the name of their restaurant chain to Subway.
2. It didn’t take long at all for Subway to begin seeing incredible success. The
first Subway on the West Coast was opening in Fresno, California in 1978,
and by 1984 the restaurant had gone international by opening a Subway in
Bahrain.
3. Fred DeLuca served as the company’s CEO until 2015. Having suffered from
leukemia for the past two years, DeLuca finally turned his position over to
Suzanne Greco before passing away a few months later.
4. In spite of the death of it’s founder and former CEO, Subway has continued to
see unparalleled success. In fact, the 26,744 Subway locations in the US
actually surpasses the number of McDonalds location in the country, making
Subway the most common restaurant in the United States. Since 2007,
Subway has continued to rank high in Entrepreneur’s Top 500 Franchises list.
5. Along the way, the chain has undergone a few changes to keep them growing
and appealing to their customers, including some notable changes to their store
design in 2016 which features USB charging ports at the tables, self-order
kiosks, new menu items, and bread made without gluten.ds of businesses

20
6. Subway’s marketing plan has also evolved along the way, with the restaurant
partnering heavy with sports figures in order to associate their products with
health and athleticism. This has allowed Subway to set themselves apart from
most fast food chains (you probably wouldn’t find and NFL star eating
McDonalds on a regular basis) and portray themselves as a healthier version of
fast food enjoyed even by athletes even at the highest level of success. Of
course, Subway’s marketing plan has also revolved heavily around their
recognizable logo – a logo that has remained mostly the same since it was very
first introduced by Subway founders Fred DeLuca and Peter Buck.

 History of the Subway Logo -

1. The history of the Subway logo dates all the way back to the very first
sandwich shop that DeLuca and Buck opened. After changing the name of
their restaurant to Subway, the two men developed a yellow logo with arrows
coming out of the “S” and “Y” in Subway. This logo remained in place with
only slight changes throughout the majority of Subway’s impressive growth
until it’s first major change in 2002. At this point, the company began using
thicker, italicized characters to spell Subway and changed the color scheme to
green, yellow, and white.

21
2. For a brief period of time from 2015 to 2016, Subway also used a single color
variation of their logo in solid green. Recently, though, the Subway logo has
undergone another significant change. In 2016, Subway unveiled their most
recent logo which featured somewhat of a return to the original logo, losing
the italics and dark green border while also adding more curves to the logo.
3. While the Subway logo has indeed undergone several different iterations, it’s
interesting to see a company that has kept the basic design of their logo ever
since they opened their very first location. The history of the Subway logo
may be short compared to the lengthy history of some companies, but,
nevertheless, it has certainly demonstrated plenty of staying power.

 Design Elements of the Subway Logo -

1. The Subway logo makes use of dark, crisp greens in order to convey the idea
of freshness as well as bright yellows to convey positivity and flavor.
2. Concerning the two arrows in the Subway logo – which have stayed with the
logo no matter which version the company has come out with – Subway has
long promoted their products to a very active, athletic audience. The arrows in
the Subway logo serve to promote the idea of movement and motion. For
active individuals who choose Subway over other, less-healthy fast food
alternatives, this is a positive message. The arrows also convey the idea of
speed, promoting the message that, in spite of the fact that Subway is fresh and
healthy, it is also a very quick and convenient option.

 Popularity of the Subway Logo -

22
 1. Much of the popularity of the Subway logo can be summed up in the logo’s
staying power. Unlike many companies whose current logo looks drastically
different from the logo they started out with, Subway’s logo has remained
mostly the same from start to finish.Subway has also created a monogram out
of the iconic arrows in their logo and continue to use that monogram in much
of their marketing material. You can find this monogram everywhere from
Subway’s commercials to the paper that they wrap their sandwiches in.

2. All told, Subway has managed to create a widely recognizable logo that
conveys all of the messages they hope to get across to their customers.

 PRODUCT PROFILE OF THE COMPANY –

Subway's core product is the submarine sandwich (or "sub"). In addition to these, the

chain also sells wraps, salad, paninis, and baked goods (including cookies, doughnuts,
and muffins).

Subway's best-selling sandwich, the B.M.T. (short for "Biggest, Meatiest, Tastiest"),

contains pepperoni, salami, and ham. The name originally stood for Brooklyn
Manhattan Transit.

Subway also sells breakfast sandwiches, English muffins, and flatbread. In 2006,

"personal pizzas" debuted in some US markets. These are made to order (like the
subs) and heated for 85 seconds. Breakfast and pizza items are only available in some

23
stores. In November 2009, Subway signed a deal to serve exclusively Seattle's Best
Coffee coffee as part of its breakfast menu in the US.

A submarine sandwich is made by filling a split Italian roll with various sliced meats,
cheeses, vegetables, and condiments. The name derives from the shape of
the sandwich. This type of sandwich is also called a hoagie, a hero sandwich, a poor
boy (or po’ boy) sandwich, an Italian sandwich, or a grinder. Unlike much of the fast
food sold by restaurant chains, Subway products are typically not fried and are
liberally garnished with fresh vegetables. Subway therefore is able to position itself as
a purveyor of healthier fast food. The company made a minor celebrity of Jared Fogle,
who claimed to have lost more than 200 pounds (90 kg) on a diet of Subway
sandwiches.

A 2009 Zagat survey named Subway the best provider of "Healthy Options" (in the
"Mega Chain" category). Subway was also first in "Top Service" and "Most Popular"
rankings. It placed second in "Top Overall", behind Wendy's.

On April 18, 2017, Subway announced the addition of paninis to its menu. Chipotle
Steak & Cheese, Triple Cheese, Chicken Cordon Bleu, and Italian B.M.T. Melt were
the four variations announced.

On September 21, 2018, Subway debuted the Chipotle Cheesesteak sandwich for a
limited-time. Regional testing of a crispy chicken sandwich also began taking place in
Arkansas

Regional variations -

Subway's menu varies between countries, most significantly where there are religious
requirements relating to the meats served.

In 2006, the first kosher Subway restaurant in the United States opened, in a suburb

of Cleveland, Ohio in the Mandel JCC of Cleveland. Former Subway
spokesman Jared Fogle attended the opening. A press release stated, "With slight
modifications, such as no pork-based products, and the use of soy-based
cheese product, the menu is virtually identical to that of any other Subway
restaurant." Other openings soon followed, briefly making Subway one of the largest
U.S. kosher restaurant chains. At their peak, twelve kosher Subway locations were
open in the U.S, including Kansas City and 5 in New York. As of 2011, only five
remained: in Cleveland, Miami, Los Angeles, and two stores
24
in Maryland. Franchisees who failed noted a lack of support from the parent location
in advertising, higher costs of kosher food and supervision, the inability to remain
open on Saturdays, and that customers who do not keep kosher prefer the original
menu and prices.

Subway opened its first restaurant in India in 2001 in New Delhi. In deference
to Hindu and Muslim beliefs, Subway restaurants in India do not
serve beef or pork products; on the other hand, the country's large number of
vegetarians has induced Subway's Indian outlets to offer a much extended range of
vegetarian options. As of January 2017 there were 591 Subway restaurants in 68
Indian cities.

On September 4, 2012, Subway opened its first all-vegetarian outlet on the campus
of Lovely Professional University (LPU) in Jalandhar, Punjab. On March 6, 2013,
Subway opened its second all-vegetarian outlet also offering Jain food
in Paldi, Ahmedabad.

Nutritional content -

In 2011, Subway introduced gluten-free bread and brownies to some locations in

Texas. It also cut the salt content of its sandwiches by 15% in 2011.

In the United Kingdom and Ireland, Subway has reduced salt content across its entire
range by 33% and has committed to further reductions, in line with government
targets. Subway's range of "Low Fat" subs is endorsed by the charity Heart Research
UK.

 AWARDS & ACHIEVEMENTS –

25
 SUBWAY® Restaurants Recognizes Achievements OfOutstanding
Franchisees –

1. The SUBWAY® chain, which has more than 20,000 outstanding franchisees

worldwide committed to providing a great product and exceptional service,
recently recognized six franchisees as recipients of its 2014 Franchisee of the
Year.
"These six franchisees exemplify everything that makes Subway such a great
brand," said company Co-founder and President Fred DeLuca, who, at 17-
years-old, opened the first SUBWAY® restaurant in Bridgeport, Connecticut,
in 1965. "They each have also found new and creative ways to work with their
employees to make them the absolute best in the industry and to reach out to
customers in meaningful ways. Overall, they are always looking for ways to
improve their operations as well as the brand and it is an honor for us to
recognize these terrific franchisees."
2. Competing among 48 finalists from 22 regions around the globe, SUBWAY®
Franchisee of the Year awards are presented to the overall winners of the
chain's multi-unit and single unit owner categories from the brand's North
American, and international emerging markets and international developed
markets.
3. The six winners are:
Multi-Unit Owner Dakshesh Patel, of Suwanee, Georgia, USA, started a
program with local elementary schools called Sprite Night where students and
their parents can come into his Subway restaurant for dinner one evening a
month and 15 percent of their sale will go back to their school. He also
supports high school and middle school athletic teams. 
Dakshesh, who owns 9 restaurants and has been with the brand for 11 years,
has a computer science degree and worked as a system's analyst for more than
a decade before joining the SUBWAY® team.
4. Multi-Unit Owner Ricardo de Oliveira Alves, of Rio de Janeiro, Brazil, has
a goal in his 11 restaurants to offer a great product and excellent customer
experience every time to every customer.  To achieve that goal, he puts a
strong focus on training, which touches on friendly service and product
knowledge as well as business best practices. As a result, Sandwich Artists™

26
 attend to customers with confidence and enthusiasm and his stores see many
customers.
Ricardo, who joined the SUBWAY® family five years ago after a career in
hotel management, enjoys working in the restaurants with his staff.  
5. Multi-Unit Owner SupotGulati, of Bangkok, Thailand, was a 17-year
veteran in the banking industry before deciding to change careers and join the
SUBWAY® team as a franchisee in 2003 because he saw an opportunity to
work for a brand that served nutritious choices to health conscious customers.
Supot, who owns 12 stores now but plans to have 20 stores opened and
operating by the year 2020, said the key to success is to have a well-trained
staff that makes customer service a top priority.
6. Single-Unit Owner Julian Shelton, of Ashland, Virginia, USA, has been a
SUBWAY® franchisee for 10 years. A former Mechanical Engineer and a
Sales Executive, Julian said creating a positive experience for everyone who
walks into his restaurant is a key to success.
In fact, some customers have become part of the SUBWAY® family at
Julian's restaurant, especially the couple that regularly brings in their 6-year-
old grandson who now greets fellow-customers with an enthusiastic
"Welcome to Subway" as they enter.
"I always wanted to own my own business and it had to involve working with
people," Julian said. "We provide a great product and we are always trying to
improve ourselves as well as the customer experience. "
7. Single-Unit Owners Iris Liang and Xiuyun Mo, of Guangzhou Champion
Beverage & Food Management Co, Ltd. in Guangzhou China, joined the
SUBWAY® brand about four years ago.
A human resource manager with a construction company prior to becoming a
SUBWAY® franchisee, Iris said, "I feel subway is like a big family; it's
composed of many different people with the same goal: to do everything we
can to always make Subway better."
The staff at their restaurant learns their customer's names as well as their
order.
"Customers feel comfortable in my restaurant," Iris said. "It is just like they
are home; the food is ready and we are their friends."

27
 8. Single-Unit Owner Dianora Falcon, of AlimentosEmmdifal CA
of Venezuela, has been a franchisee for seven years and said the key to
success is to make sure that all customers who leave the restaurant she owns
with Augustin Delgado are happy when they leave.
All of this is achieved with an excellent team who we train and encourage and
always recognize their hard work. Additionally, Dianora said her team always
creates a welcoming atmosphere for customers and their families can go to
relax and get a great meal.

 Subway won 1 award in 2019. In 2019, Subway won for Best Company
Work-Life Balance. Based on 10,850 ratings and 614 participants, employees
at Subway are less satisfied with their work experience. The overall culture
score, 63/100 or C, incorporates employee ratings based on their feedback on
the Environment, Manager, Diversity and more.

RESEARCH METHODOLOGY

 RESEARCH CONCEPTS -
Researchcomprises “creative work undertaken on a systematic basis in order to
increase the stock of knowledge, including knowledge of individuals, culture and
society and the use of the stock of the knowledge to devise new application.” It is
used to establish or confirm facts, solve new or existing problems, support theorems,
or develop new theories. A research project may also be an expansion on past work in
the field. Research project can be used to develop further knowledge on a topic.

28
The primary purpose of basic research (As opposed to applied research) is
documentation, discovery, interpretation, or the research and development (R&D) of
methods and systems for the advancement of human knowledge.

 SOURCES OF DATA COLLECTION -

In the preparation of this project it is necessary to collect the primary data and
secondary data.

a) PRIMARY DATA -
When someone refers to the “primary data”, they are referring to data collected by the
researcher himself/ herself. This is the data that has never been gathered before,
whether in particular way, or at a certain period of time, Researcher tend to gather this
type of data when what they want cannot be find from outside sources. Issues of
consent are confidentially are of extreme importance. Primary data actually follows
behind secondary data because you should use current information and data before
collected more, so you can be informed about what has already been discovered on a
particular research topic.

b) SECONDARY DATA -

This type of data typically comes from other studies done by other institutions or
organisations. There is no less validity with secondary data, but it should be well
informed about how it was collected. There are a number of free services online as
well as many other made available through our contacts with many technical
professionals.

 RESEARCH INSTRUMENT -

The research instruments used for collecting the primary data were the questionnaire.

29
  QUESTIONAIRE -
The questionnaire was carefully developed tested and debugged before they were
administered on a large scale. Each question contributed to the research objective here
questionnaire is structured types means there are concrete, definite and predetermined
questions.The questions are presented are exactly same wording and in the same an
order to all respondents. The questionnaire had a mix type of open ended, closed
ended and multiple choice questions. The questions were limited in numbers simple
direct and unbiased technology was adopted.

 SAMPLE DESCRIPTION -
 In this project I have planned to conduct a survey of approximately 65
respondents with random sampling method. For this I had taken help of
electronic survey method as a primary means. And I had designed a
QuestionnaireMARKETING STRATEGIES ADOPTED BY SUBWAY”e
on. And I have taken my survey through people who have industrial
background. While collecting data through the link.
 https://docs.google.com/forms/d/1c-
tRt1LfsGZxIrpUP6dvTy1BRCLWNKWRjoRKecLfYvg/edit#responses . I received 70
responses from this above Google form link.

 SAMPLE/RESEARCH DESIGN -
 Steps in the research plan -

30
F
y
C
w
v
L
p
t
f
h
r
a
e
S
lu
o
c
&
s
g
d
in
a) Search for the thrust area: - After searching various topics in the field, I
found that, for selecting any project work, we need to first opt a topic in which
we want to know the depth of it.
b) Selection of the topic: - The topic “MARKETING
ADOPTED BY SUBWAY” is an amazing topic in today’s world because
anyone has
STRATEGIES

the curiosity to know about the topic. While taking a

consideration about the topic, one need to discuss and self-impressed. I had
selected this topic is to satisfy my curiosity about my project and also enhance
our knowledge towards SUBWAY market. And I have discussed with my
faculty guide at the same time and he suggested me to go through it.
c) Literature review: - Once the topic has been selected, we must gain more
knowledge of the topic. For this purpose we must analyse the literature related
to the topic. Review the research work in the field. Refer books and websites
related to the field, refer blogs, news, reports,internet etc. all these can help us
to do the project in a right way.
d) Collection of data: - All project data mainly collected in two ways. That is
primary data and secondary data. Primary data can be collected through
experiments, survey method, observations, questionnaires and personal
interviews etc. Secondary data can be collected from the sources like books,
referrals, magazines, newspapers, annual reports and former research papers
from the universities & from internet etc. I have collected my data’s from

31
 primary as well as secondary sources. For primary data collection I have made
a questionnaire about the topic through personal interview with Subway staffs
and daily customers who arepreferring Subway in their daily/weekly/monthly
routine basis as well as youngsters and kids preferring Subway. And I
collected secondary data’s from internet, company websites and from ex-
colleagues.
e) Findings & Conclusion:- This is the last step of the project where we have to
highlight the findings and conclusion about the project.

 LIMITATIONS OF THE STUDY –

a) Time constraint -
32
 Theallottedtimetoconductthesurveywas15-20days.Thereforeit
becameabitdifficult to cover the entire SUBWAY branch in Pune. However,
the key areas were aptlycovered.
b) Availability of Data -
Mostoftherestaurantsandeatingjointswerenotinfavorofusconductingthesurvey
inside their premises as it would disturb their customers. ‘Non-willingness of
the respondents to answer the questionnaire was also ahurdle.
c) Reliability of data -
Reliability of data always remains a prime concern when humans are
surveyed. Mon-
interest,poorunderstanding,unclearquestions,inabilitytothinkinstantlyandcusto
mer biases creeps in apprehensiveness in the minds of the researcher while
tabulating and analyzing thedata.

THEORETICAL BACKGROUND & LITERATURE REVIEW

33
  THEORETICAL BACKGROUND –

The theoretical framework of this survey will give the reader a better image of
what models and different theories are used in this –

 PESTLE Analysis -

PESTLE Analysis of Subway analyses the brand on its business tactics. Subway
PESTLE Analysis examines the various external factors like political, economic,
social, technological (PEST) which impacts its business along with legal &
environmental factors. The PESTLE Analysis highlights the different extrinsic
scenarios which impact the business of the brand. PESTLE analysis is a framework
which is imperative for companies such as Subway, as it helps to understand market
dynamics & improve its business continuously. PESTLE analysis is also referred to as
PESTEL analysis. Let us start the Subway PESTLE Analysis:

a) Political Factors:

The political factors in the Subway PESTLE Analysis can be explained as follows:

Subway operates across more than 100 countries and keeping up with the various
regulations spanning across these countries is a major task that the franchisee leader
needs to take care of. These are the changes that directly affect their daily operations.
One such factor is the health, safety, and food sanitation guidelines that differ from
country to country. A major example is that affected the operations of Subway was
Brexit. It led to uncertainty about the future of various restaurants and food chains as
the changes that would occur if the division went through were uncertain. In certain
countries, there are strict rules related to sourcing of meat products which affects
business of Subway. This must be kept in mind that all the rules and regulations are
followed. These regulations also affect the ease of doing business. If the rules in
context to fast food joints are complex and or if the region is disputed or disturbed,
people opting to take up franchise will be less.

b) Economic Factors:

Below are the economic factors in the PESTLE Analysis of Subway:

34
With increasing prices of raw material, and the need to keep its sandwiches
affordable, Subway needs to develop efficient strategies to maximize its profits. With
decrease in disposable incomes in inflation struck countries, the chances of gaining
higher profits are reduced. Thus, targeting countries that have a more stable economy
is important. Recession hit countries like the US in 2007, are a bad area to work in.
Higher is the unemployment rate in a region, easier it is to get cheap labor. A major
setback will occur if Subway fails to keep up with the fast-growing trend and newer
competition. Targeting countries where people are more health-conscious and are
willing to spend more on a snack is where subway should be. Disputed regions with a
higher level of unemployment is a factor that affects the overall profitability of the
company. Regions with lower corporate tax, e.g. India are regions where higher
profitability is an advantage.

c) Social Factors:

Following are the social factors impacting Subway PESTLE Analysis:

The various beliefs about fast food being unhealthy were washed off by Subway. By
providing one of its kind, low calorie ‘Subs’, the fast-food chain managed to gain
quick popularity. There yet certain beliefs that Subway needs to take care of. Certain
countries that believe in Halal meat over the others need to be served according to
their requirements rather than availability. Association with controversy can degrade
any name and so was the case with Subway, when its spokesman, Jared Fogle, was
convicted on child pornography charges. This led to a decline in sales across various
regions. Keeping up with the upcoming generations increased need for choices is a
major task that Subway needs to undertake. If this task does not happen continuously,
the business model that Subway has created over the years will go for a toss.

d) Technological Factors:

The technological factors in the PESTLE Analysis of Subway are mentioned below:

In today's times, technology is a major determining factor for the success or failure of
a business. A social media presence is a must and Subway over the years has managed
to capture these changing trends and also has adapted quite well. It operates various
social media handles where it posts about the latest update as well as resolves
problems and queries. It also has an online ordering facility where one can view all

35
the available variants as well as avail the various discounts that are available over the
counter. Subway also runs a customer loyalty program, along with having launched a
chatbot for people to place their online orders. It is also involved with the testing of
kiosks at select locations across the world. With further improvement in technology,
Subway should try and venture into robotics to gain a competitive edge.

e) Legal Factors:

Following are the legal factors in the Subway PESTLE Analysis:

When operating across such a large number of countries, the chances of getting hit by
a lawsuit increase. Thus, to avoid major damages, the franchisor, as well as the
franchisee, need to be abreast with the changing legalities. There are various heads
under which the laws are classified and applied to a company but the major ones that
the company needs to take care of are related to packaging, labor laws, Franchisee
laws related to contract renewal, compliance of hygiene of workers, and proper waste
disposal. The nutrition content needs to be displayed according to the legalities in
various countries. Along with displaying, providing the right content is also
important. The recent defamation case by Subway on CBC is considered to be trick to
reducing the effect of it being caught in supplying soy protein instead of chicken.
Hygiene is very important in European countries and the United States while in other
countries the pressure is a bit less. Thus, abiding by all these regulations is very
important for Subway.

f) Environmental Factors:

In the Subway PESTLE Analysis, the environmental elements affecting its business
are as below:

The Subway system is committed to providing a wide range of food choices while
reducing its environmental impact and creating a positive influence on society.
Working through IPC (Independent Purchasing Company), Subway is committed to
creating more sustainable options for packaging, energy-efficient stores and also
undertake water and resource conservation. Reducing the amount food waste
produced is of primary importance and doing so through efficient forecast and ethical
sourcing techniques is important to Subway. The tissues and paper towels across
Subways are claimed to be 100% recyclable. The napkins are printed using soy or

36
water-based inks and even the plastic they use is currently 25% recycled material and
can be further be recycled. A major issue that subway might face is the compliance of
the packaging material with the packaging standards across its various countries of
operation. It needs to keep a tab that all the material that Is used across its Franchisees
are all up to the mark. The concept of ECO restaurants taken up by various franchisee
owners is another step towards creating a more sustainable environment. Since
Subway is spread across 100 countries the need to follow the various changes made in
the environmental policies across these countries is a mandate. Only through constant
monitoring and changes, Subway will be able to create policies efficient enough for
all its franchisees.

To conclude, the above Subway PESTLE Analysis highlights the various elements
which impact its business performance. This understanding helps to evaluate the
criticality of external business factors for any brand.

 The Seven Elements of the McKinsey 7-S Framework –

The model categorizes the seven elements as either "hard" or "soft":

37
 Hard Elements Soft Elements

Shared Values

Strategy Skills

Structure Style

Systems Staff

Figure 1: The McKinsey 7-S Model

The three "hard" elements are strategy, structures (such as organization charts and
reporting lines), and systems (such as formal processes and IT systems.) These are
relatively easy to identify, and management can influence them directly.

The four "soft" elements, on the other hand, can be harder to describe, less tangible,
and more influenced by your company culture. But they're just as important as the
hard elements if the organization is going to be successful.

Figure 1, below, shows how the elements depend on each other, and how a change in
one affects all the others.

Let's look at each of the elements individually:

Strategy: this is your organization's plan for building and maintaining a competitive

advantage over its competitors.

Structure: this how your company is organized (that is, how departments and teams
are structured, including who reports to whom).

Systems: the daily activities and procedures that staff use to get the job done.

Shared values: these are the core values of the organization, as shown in its corporate
culture and general work ethic. They were called "superordinate goals" when the
model was first developed.

Style: the style of leadership adopted.

Staff: the employees and their general capabilities.

38
Skills: the actual skills and competencies of the organization's employees.

Placing shared values  in the center of the model emphasizes that these values are
central to the development of all the other critical elements.

The model states that the seven elements need to balance and reinforce each other for
an organization to perform well.

As we pointed out earlier, the McKinsey 7s framework is often used when

organizational design and effectiveness are at question. It is easy to understand the
model but much harder to apply it for your organization due to a common
misunderstanding of what should a well-aligned elements be like.

We provide the following steps that should help you to apply this tool:

Step 1. Identify the areas that are not effectively aligned

During the first step, your aim is to look at the 7S elements and identify if they are
effectively aligned with each other. Normally, you should already be aware of how 7
elements are aligned in your company, but if you don’t you can use the checklist
from WhittBlog to do that. After you’ve answered the questions outlined there you
should look for the gaps, inconsistencies and weaknesses between the relationships of
the elements. For example, you designed the strategy that relies on quick product
introduction but the matrix structure with conflicting relationships hinders that so
there’s a conflict that requires the change in strategy or structure.

Step 2. Determine the optimal organization design

With the help from top management, your second step is to find out what effective
organizational design you want to achieve. By knowing the desired alignment you can
set your goals and make the action plans much easier. This step is not as
straightforward as identifying how seven areas are currently aligned in your
organization for a few reasons. First, you need to find the best optimal alignment,
which is not known to you at the moment, so it requires more than answering the
questions or collecting data. Second, there are no templates or predetermined
organizational designs that you could use and you’ll have to do a lot of research or
benchmarking to find out how other similar organizations coped with organizational
change or what organizational designs they are using.

39
Step 3. Decide where and what changes should be made

This is basically your action plan, which will detail the areas you want to realign and
how would you like to do that. If you find that your firm’s structure and management
style are not aligned with company’s values, you should decide how to reorganize the
reporting relationships and which top managers should the company let go or how to
influence them to change their management style so the company could work more
effectively.

Step 4. Make the necessary changes

The implementation is the most important stage in any process, change or analysis
and only the well-implemented changes have positive effects. Therefore, you should
find the people in your company or hire consultants that are the best suited to
implement the changes.

Step 5. Continuously review the 7s

The seven elements: strategy, structure, systems, skills, staff, style and values are
dynamic and change constantly. A change in one element always has effects on the
other elements and requires implementing new organizational design. Thus,
continuous review of each area is very important.

 Porter’s Five Forces Analysis –

A model was put forward by Michael. E. Porter in an article in the Harvard Business
Review in 1979. This model, known as Porter's Five Forces Model is a strategic
management tool that helps determine the competitive landscape of an industry. Each
of the five forces mentioned in the model and their strengths help strategic planners
understand the inherent profit potential within an industry. The strengths of these

40
forces vary across the industry to industry, which means that every industry is
different regarding the profitability and attractiveness. The structure of an industry,
even though it is stable, can change over time. These Porter’s five forces are as
follows:

1) Threat of New Entrants

2) Bargaining Power of Suppliers
3) Bargaining Power of Buyers
4) Threat of Substitute Products or Services
5) Rivalry Among Existing Firms

 Subway Marketing Mix Strategy 7Ps Analysis -

a) Subway needs to develop marketing mix strategies to achieve its desired
results within the market that it serves. By developing strategies that address
the various aspects of each element, Subway will be able to achieve its broad
marketing strategy. An analysis of the 7 elements of the marketing mix and
recommended strategies among each for Subway are as follows:
b) Marketing Mix of Subway –

 Product
a) Subway sells its products under 5 broad categories, and each of these serves as
separate product lines. All of its products are sold under the brand name of
Subway.
b) Subway sells products with a lot of variety available, which allows customers
to select the product variety that best suits them.
c) Subway sells products that are highly differentiated, with various features
offered to customers that competitors don’t offer. Its products are therefore
considered to be unique.
d) Its products are perceived to be of higher quality than that of competitors.
Therefore, customers are willing to pay a higher price for these.
e) Subway sells products that are famous for its traditional design that is also
practical for customers to use.

41
f) Recommended Product Strategy for Subway
g) Subway should extend additional benefits for purchasing its products that
include warranties, delivery and credit, after-sales service, helpline services
etc.
h) It should introduce new products that are in line with the latest trends in the
market. It should identify opportunities within the market and introduce new
products that make use of these opportunities.
i) It should test newly introduced products in test markets before going for full
commercialization of these.
j) It should introduce widen its product portfolio, offering new product lines to
fulfill customer needs.
k) Subway should improve its product packaging such that it is more convenient
to transport and use. Its packaging should also be visually appealing so that
customers are attracted to it.

 Price
a) The current pricing strategy to set the price level that Subway follows is a
competitive based pricing strategy. This is because the data on competitors is
easily available due to a large number of competitors that exists within the
industry.
b) It also takes costs into consideration to set prices for a few products for which
either information is not available on competitors, or are costlier to make,
c) Subway sells its products at a higher price than competitors. This is because it
offers more features, and the high price makes up for these.
d) It currently uses product bundle pricing as well, where products are bundled
together and sold at prices lower than the total of individual items.
e) It also uses an optional product pricing strategy for certain products, where it
offers a price for the base product and separate prices for the accessories that
come along with it.
f) It charges a greater price for the products it sells online. This is because
delivery costs have been included in the price of the product.
g) Subway has fixed the prices of the final product. Channel members; retailers
and wholesalers, buy the product at a lower price and earn through their own
margins.
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h) Recommended Price Strategy for Subway
i) Subway should introduce discounts and allowances, where it lowers prices for
a short period of time in order to attract customers and gain market share. It
can do this by reducing a percentage off the price of its products.
j) Subway should use psychological pricing where it prices products so that they
seem to be lower; for example, it can price a product worth $100 as $99 as
people would consider this to be lower.
k) Subway should introduce new products with a price penetration strategy where
it offers an initial lower price than competitors to gain market share. This will
ensure that new products that are introduced are used by and become more
popular than that of competition.

 Place
Subway sells its products through two marketing channels. The first is where
it sells directly to its customer through its online website. The second is where
it sells to wholesalers who then sell to different retailers located all over the
country. These then sell to its customers.
a) Subway has its products present on over 500 retailers throughout the country.
It follows an intensive marketing strategy where it tries to include its products
on as many retailers as possible. This ensures that its products are available to
customers easily in different parts of the country.
a) Subway has a substantial amount of online sales with frequent traffic on its
websites. In order to run its online operations, Subway has partnered with
numerous delivery service providers in order to provide timely deliveries.
b) It follows an omni-channel distribution system where it has integrated its
online and offline stores to allow customers easy access to its products.
c) Subway has a network of over 500 suppliers that provide it with the raw
materials needed for production. It has developed a close working relationship
with its suppliers allowing the company to work with them to innovate and
introduce new and attractive features on its products.
d) Recommended Place Strategy for Subway
e) Subway should open up its shop on social media as well, where it would sell
its products on these platforms along with social media posts. This will allow

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 the company to generate more sales. Its online shop and social media pages
should be integrated in order to provide easy navigation to its users.
f) Subway should focus on improving its online website such that it becomes
more user-friendly and easier to use.
g) Subway should ensure that it sells its products to large retailers through
personal selling. These large retailers have grown in recent years and attract a
large number of customers. This would ensure that Subway increases its sales.
h) Subway should open up company-operated retail stores, where it offers all of
its products. This would help save costs for the company as retailer and
wholesaler margins would not exist.
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 Promotions
a) Subway uses multiple media channels to promote its products. It uses
traditional media, which includes an advertisement on television and radio.
This is beneficial due to its large reach and ability to attract a large number of
people. It uses online and social media advertising, which is cheaper and
beneficial due to the increasing usage of the internet.
b) It advertises on various social media platforms with a focus on YouTube,
Facebook and Twitter due to the high monthly usage of these. It has over one
hundred thousand likes or customer following on these pages, which are
exposed to frequent content uploaded by Subway.
c) Subway undergoes various sales promotion taking part in various trade
exhibitions and events around the year.
d) Subway undergoes personal selling, with a large sales force to increase its
presence in retail stores.
e) Subway uses a percentage of sales method to determine the promotions budget
for the year.
f) Recommended Promotions Strategy for Subway
g) Subway should hire influencers on social media such as bloggers or popular
TV/movie stars, and include them in its advertisements. Bloggers can post
content on their social media pages in order to promote Subway. TV/movie
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 stars can be included in advertisement commercials to increase acceptance of
the product by customers.
h) Subway should initiate an advertising campaign where a consistent message is
provided to customers on all media platforms. This will help increase
awareness for the brand within the minds of the customers.
i) Subway should undergo various digital marketing technique in order to
improve the online traffic on its website. These include a banner
advertisement, Search Engine Optimization and creating its blog.
j) Subway should make social media posts that are more relevant to its target
audience. The posts should also be such that they encourage further action by
customers such as sharing the posts with friends or leaving feedback in the
form of comments. These should incorporate the latest social media trends
such as hashtags, memes etc.
k) Subway should start collecting data on customers and start sending them
messages through email or SMS, which will eventually result in repeat
purchase by customers.

 People -
a) Subway has people working under its sales team that play a vital role in its
marketing efforts. These people have been trained in persuasive techniques,
but also to show respect to the business customers taking into consideration
their preferences.
b) Subway has people working in its customer service department. These are
contacted by customers in case of any issues within the product, and these
people guide customers through the process of getting the issues resolved.
These people are trained to respect the customers and try their best to get their
issues resolved.
c) Subway has people working with suppliers to obtain raw materials. These
people play a vital role in maintaining or improving the quality of the final
product produced.
d) Subway has people working at retail stores who help the customer on site, by
answering any questions or helping them decide the product that best suits
their needs.
e) Recommended People Strategy for Subway
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f) Subway should undergo trainings for its sales force, customer services and
purchasing people as these play a vital role in delivering value to the
customers.
g) Subway should provide incentives to its sales force through bonuses for
meeting targets, or through commissions for the sales made.
h) Subway should hire people that show respect towards customers, and are
committed to the company.

 Process–
a) Subway to make sure that its products are always available at retail stores has
systems installed where retailers can notify when their inventory levels are
low. Subway provides them with more products while ordering its productions
to replenish its stock. This ensures that products are always available to
customers when needed.
b) Subway has an online delivery process, where orders are received in the
computer system and based on these orders, the relevant product from the
inventory is shipped to the delivery service provider.
c) Subway is actively involved in researching market opportunities in order to
understand customer needs. It also develops understanding regarding customer
needs through feedback collected at store, its helpline or social media pages.
d) Recommended Process Strategy for Subway
e) Subway should use computers across to handle its various process to increase
efficiency and timely delivery to customers.
f) Subway should constantly look for ways to innovate and improve its processes
in terms of efficiency and cost. Costs savings would eventually lead to lower
prices for its products.

 Physical Evidence–
a) Subway sells its products in a distinct colour packaging that easily identifiable
on retail shelves. These are placed on special shelves provided by the
company, which also have a distinct colour and design. This makes it easier
for customers to locate such shelves in busy retail stores.
b) Subway has an online website that is user-friendly and allows customers to
view its products in high quality images taken from various angles.
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 c) Recommended Physical Evidence Strategy for Subway
d) Subway should collect feedback from its customers regarding its packaging so
that it could improve on this.
e) Subway should set up its own stores where it provides a shopper-friendly
environment and ambience, encouraging its customers to purchase its
products.

 SWOT Analysis of Subway –

Strengths in the SWOT analysis of Subway :

No. of stores: Subway has 44,852 outlets compared to its competitors. McDonald’s
has 36,615 while Burger King has 15,243. KFC is operating in 19,952 locations while
Taco Bell has 7000 restaurants. This sheer difference gives Subway an added
advantage to cover larger potential population.

High Brand Loyalty: It has a high brand recall and following among its customers.
The ones who eat here are high brand loyalists. On the most valuable restaurants in
the world, Subway holds the number third spot being beaten only by McDonald’s and
Starbucks. Its brand value stands at $10.314 billion.

Health benefits: They offer healthy subs sandwich that is preferred and much better as
compared to food items offered by other fast-food chains like McDonald’s.
McDonald’s and KFC rely heavily on oily and fried foods which are completely
opposite to what Subway aims for. The rise of Subway rapidly can also be accounted
because of increasing health related problems by eating junk food and so customers

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have started moving towards healthier options. This is probably the best strength in
the SWOT analysis of Subway

Easy Starting of franchise: Franchisee staff training is structured, brief and designed
to assure rapid start-up for new employees as these are all carried out by the agency
which has hired the brand name of Subway. This ensures easy set-up of new
restaurants at far off locations and smooth functioning without any obstructions of
different regulations.

Differentiation: In the world of many different burger and pizza chains, Subway
stands different because it is a customsed sandwich. You can build it the way you like
it with the various ingredients on offer. If we consider the customization angle, no
other fast food brand has achieved the level of popularity which subway has achieved.
This differentiates subway and makes it a loved brand amongst the various food
franchise’s.

Weaknesses in the SWOT analysis of Subway :

Brand Value: Although having the highest no of operating locations in the world
Subway still suffers in brand value when compare to its biggest competitor
McDonald’s. It is also not very far away from its closest competitors, though in
restaurants it is solidly at the second position (keeps changing year on year).

Satisfaction and Level of Service: Because of the training of the staff is outsourced to
the ones who have franchised does not ensure a common level of service satisfaction

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around all the Subway stores around the globe. The commitment cannot be the same
across all the restaurants.

Old-fashioned themed restaurant: Subway has not updated their restaurant’s styles
accordingly to the changing times. This results in poor satisfaction level of the
customers leading to the customers changing their preferences over time.

No Online Presence: No online presence and promotions affect the brand name of the
company. Today in the digital era online presence is equally important. This is where
Subway lacks.

Many Employees: Subway employees’ job is a low paid and a low skilled job. It
results in low performance and high employee turnover, which increases training
costs and add to overall costs of Subway.

Opportunities in the SWOT analysis of Subway :

Health Consciousness: People are getting more and more health conscious in today’s
world. So, Subway can actually exploit this and become more successful as brand and
restaurant.

Home Delivery: Most of the successful restaurants are providing services like home
delivery. Subway needs to pick up on this trend and start catering the home delivery
loving potential customer.

Diversification: Subway has stuck with only one kind of product i.e. Subs but it needs
to diversify into different kinds of healthy options and stay in the competition. They
can utilise their already established customers to change their eating habits and
generate more loyal customers.

Drive through: Also one of the services offered by its competitors is drive through the
facility for the quick and working class people. Subway needs to apply this in their
restaurants as well.

Vegetarian Foods: Mostly Subway offers different kinds of meats but lacks in a varied
menu for vegetarians. It needs to diversify in this front as well.

Threats in the SWOT analysis of Subway :

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Competition: Subway can face a serious threat from competition like McDonald’s,
KFC, Taco Bell, Wendy’s which also have a loyal following. If they also start
providing low-fat food options this can seriously damage Subway’s customer base.

Saturated Market: New restaurants are coming up with the same model as of
Subways. This can damage the customer base as they can influence the local people
better and serve their needs better in the regional base.

Bad Reputation: There have been some lawsuits against the brand regarding stale and
unhealthy food that was being served to the customers. This damages the brand’s trust
and makes people reluctant to try them again.

Trend Change: If people start caring about their food (somewhat unhealthy) more and
might want more spice of taste to it they may choose to move to other restaurants.

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