Subway SWOT Analysis

SWOT Analysis

A SWOT analysis is a structured planning method used to evaluate the strengths, weaknesses,

opportunities and threats involved in a project or in an organization.

Types of SWOT Analysis

There are two types of SWOT analysis

External analysis

Internal analysis

External analysis involve

Opportunities

Threats

Internal analysis involve

Strengths

Weaknesses

There are six steps of Implementation on an Organization.

Identifying the organization’s current Mission, Goals and Strategies

Doing an External Analysis

Doing an Internal Analysis

Formulating Strategies

Implementing Strategies

Evaluating Results

SWOT Analysis of Subway Company

Introduction

Subway is an American fast food restaurant chain that mainly sells submarine sandwiches (subs)

and salads.

Subway is the largest single-brand restaurant chain globally and is the second largest restaurant

operator globally after Yum! Brands.

Internal Analysis

Strengths

Weaknesses

Strengths

Great degree of subs customization

Largest fast food restaurant chain in the world by the number of outlets

Marketing and promotional strategies

Choice of healthier meals

Partnerships with Britain and American Heart Associations

All restaurants are owned by franchisees

Low startup costs

Weaknesses

Interior design of the outlets often looks cheap

High employee turnover

Services are not consistent from store to store

Too much control over franchisees

Strengths

Great degree of subs customization. Customers always like to choose and the

more choices they can make about their purchase the more satisfied they are with it.

Subway is better than any other large fast food chain in providing the choice of meal

customization.

Largest fast food restaurant chain in the world by the number of

outlets. Currently the company operates 38,181 restaurants in 99 countries, more than

McDonald’s or any other fast food chain operator.

Marketing and promotional strategies. Subway employs superior marketing

techniques and promotional strategies to attract and grow their customer base. The most

successful Subway’s promotional offer was to offer foot longs for only $5, which became

a new pricing standard of a sub.

Choice of healthier meals. Subway offers a range of low calorie, fresh and

nutritious food, which you can’t find in other fast food stores, at least not to such an

extent. This Subway strength meets current trend of eating healthier food.

Partnerships with Britain and American Heart Associations. Subway has

received certificates from both organizations that it serves health meal options, which is a

great reward and differentiates the business from other fast food restaurants.

All restaurants are owned by franchisees. Subway doesn’t own any restaurants

itself so it experiences less risk and can focus its efforts on marketing and growing the

franchise.

Low startup costs. One of the reasons behind such a high growth rate of Subway

stores is the low startup costs. Subway stores are smaller and require less money for

leasehold improvements and equipment.

Weaknesses

Interior design of the outlets often looks cheap. Subway restaurants lack the

interior design and quality that would welcome everyone to stay and feel more

comfortable than in the competitor’s restaurants.

High employee turnover. Subway Sandwich Artists 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.

Services are not consistent from store to store. The business struggles to

ensure consistent services’ quality throughout it stores and so a service in one store may

please a customer when another may fail to do that.

Too much control over franchisees. Despite the fact that Subway fails to ensure

consistent quality throughout the stores it exerts too much control over its franchisees.

This is done through the contracts that are more favorable to the franchisor. An example

of such high control is seizing of franchisee restaurants if the later one is struggling to

keep them open.

Opportunities

Increasing demand for healthier food. It’s an opportunity upon which Subway

already grows itself and could further introduce low fat, low salt and more nutritious

subs.

Home meal delivery. Subway could exploit an opportunity of delivering food to

home and increase its reach to customers.

Changing customer habits and new customer groups. Changing customer

habits represent new needs that must be met by businesses. So far, Subway has only one

variation of restaurants, different to its close competitor McDonald’s, which tries to

satisfy and reach previously untapped customer groups by introducing McCafé,

McExpress and McStop.

Introduction of drive-thru. McDonald’s already offer only drive-thru restaurants,

which is a great opportunity for Subway to jump.

Threats

Saturated fast food markets in the developed economies. The fast food

market in the developed countries is already overcrowded by so many fast food restaurant

chains and this already proves to be a threat to Subway as it finds it hard to grow in the

developed economies.

Trend towards healthy eating. Only part of Subway’s menu offers healthier

choices of meals, while the rest menu is rich in salt, contains many calories and is

accompanied by soft drinks. Customers who care about their food and well-being may

opt out for something else rather than Subway.

Local fast food restaurant chains. Local fast food restaurants can offer healthier

food and menu that exactly represents local tastes.

Currency fluctuations. Subway receives much of its income from foreign

operations. That income has to be converted into dollars and may affect the company’s

profits, especially when the dollar is appreciating against other currencies.

Lawsuits against Subway. Subway has been involved and lost a few lawsuits in the

past because of the poor company policies regarding franchisees management. Lawsuits

are expensive, time consuming and damages the firm’s brand.