SWOT Analysis of Subway

Introduction 

Swot analysis of Subway. Subway is a US fast-food chain restaurant multinational company. Peter Buck and Fred DeLuca were the founders of Subway, and they laid the foundation of the restaurant franchise on August 28, 1965. The headquarter of the company is in Milford, Connecticut, USA.

Subway’s main products and services are muffins, doughnuts, cookies, baked goods, paninis, salad, wraps, breakfast sandwiches, ham, pizzas, flatbread, Chipotle Steak & Cheese, Italian BMT, chicken cordon bleu, and many others.

According to an estimate, the annual revenue of Subway in 2020 was 10.2 billion dollars. The chain restaurant company has employed more than 30,000 employees to manage its worldwide operations.

Subway’s top competitors in the food and beverage industry are Full House, Dunkin Donuts, Pizza Hut, StarbucksKFC, Dominos Pizza, McDonald’s, Yum, Burger King, Papa Johns Pizza, and Chipotle.

Today, we’ll discuss the swot analysis of Subway. It’s going to analyze the internal and external factors impacting the world’s leading fast-food chain restaurant franchise. Here’s the swot analysis of Subway as follows;

Strengths of Subway 

Advanced Marketing

Subway uses various channels for the marketing and promotion of its products and services. Like TV, radio, podcast, and digital/social media platforms like Facebook, Google, Instagram, YouTube, TikTok, LinkedIn, Twitter, and others.

It’s important to mention it here that the franchise uses the analysis marketing strategy. It means that the company uses analytical tools to check the market situation and changes its strategy accordingly. It has allowed the company to establish a good brand image while earning profit. The marketing and promotional campaigns are the main strengths of the company.

Franchising Business Model

Subway follows the franchising business model. The parent franchise issues the licenses to the franchisee owners to open up a chain restaurant and use the brand. It helps the company to minimize the operational cost and risk factors. Most importantly, the model has allowed the company to quickly approach the global audience.

Differentiation

Subway differentiates itself from the competitive brands in terms of customer service. For instance, the restaurant brand offers customized sandwiches according to the customers’ requirements. The smell of freshly baked bread appeals to the appetite of customers and attracts them towards the restaurant.

Delicious food

Subway offers healthy and nutritious food with a unique taste and it makes the customers’ mouths watery. For instance, the fast-food chain doesn’t use eggs in the sauce and bread, and it provides low calories food (230-370) comprising of 6gm fat.

Large Network

Subway is the world’s largest fast-food chain restaurant in the USA and across the globe. According to an estimate, the company has approximately more than 43600 chain restaurants in 111 countries worldwide. The restaurant sells millions of sandwiches daily and has won many awards accolades over the years.

Variety

Subway offers a variety of products both for fast food and health-conscious customers. It ranges from salads, coffee, tea, chips, cookies, flatbread, and sandwiches. However, such offers make it difficult for the competitive brand to sustain the brand.

Brand Loyalty

Subway has developed a large database of loyal customers across the globe. They always choose the company’s products.

Brand Value

According to an estimate by Forbes, Subway ranks at the 492nd position of America’s Best Employer in 2021. However, it ranked at the 92nd position of the World’s Most Valuable Brand in 2017. According to another source, the brand value of Subway was 10.314 billion dollars.

Weaknesses of Subway 

High Turnover Rate

Many business analysts say that the employee turnover rate of Subway is very high. It’s because the chain restaurant brand offers low incentives to skilled professionals. However, money is a very powerful source of motivation and lower incentives make it difficult for them to stay loyal to the company.  

Expensive Food

Many price-conscious customers have created a perception that Subway’s food items are costly and expensive. Such word-of-mouth marketing has presented a negative image of the company and reduced the sale. They also criticize the company for charging premium prices and offering the same food that competitors are offering at a lower price.

Interior Designing Issues

Many customers have complained and questioned about Subway’s interior design and seating arrangement. Some of its franchisees are so small and don’t have enough seats to serve too many customers during busy hours.

Customer Services Issues

As we know Subway follows the franchising business, and it means that the franchisee license holders have authority on running daily operations. That’s why Subway doesn’t have a unified service system for all of its chain restaurants. However, it’s good at some places and completely opposite the other.

Opportunities available to Subway 

Vegan Food

It’s no doubt Subway offers vegan food to the vegetarian customer market. But the food items are limited in the menu which makes it difficult for the company to attract and retain vegan customers. Therefore, the restaurant brand should expand and diversify its vegan portfolio in order to compete in the market.

Portfolio Expansion

Subway should follow the creative approach in the portfolio expansion by offering more products to the customers. The new food items and dishes on the menu would attract more customers and amplify the sale.

Healthy Trends

As we know that the demand for healthy diet food is increasing across the world. It presents a great opportunity for Subway to exploit the growing diet trends of low sugar, salt, and fat-containing food.

Delivery

The pandemic of covid-19 has limited outdoor and social gathering activities. Subway’s stores should offer the food home delivery service to the customers under the circumstances of worldwide lockdown. It would be a huge plus point to the company’s business.

Market Expansion

Subway is operating its fast-food chain restaurant business in more than 111 countries across the world. It’s a fairly big market, but the brand has yet to explore the markets in developing countries.

Threats Subway has to face

Changing Trends

The interest of the customer food market is shifting from fast food to healthy organic food. If Subway doesn’t keep up with the growing pace, the customer would replace the brand with some new healthy diet brands. It won’t be good news for the chain brand.

Market Saturation

It’s no doubt the food and beverage industry is the world’s top growing industry. But the over-competition and the new online food stores have saturated the market. It has provided a lot of choices to the customers but decreased the sale and profitability of the restaurant brand.

Competitors

McDonald’sStarbucksKFC, Wendy’s, and others are some of the main competitors of Subway. They’re competing with the company in different categories and their increasing market share and profitability limit the company’s growth.

Conclusion: Subway Swot Analysis 

After an in-depth study of the swot analysis of Subway, we’ve concluded that Subway is indeed the world’s largest fast-food chain restaurant brand. The increasing competition, market saturation, and changing trends are some of the main challenges. Subway should expand its customer market and diversify its product portfolio in order to sustain its market position.