Professional Documents
Culture Documents
Company History:
Subway prides itself in being a healthy fast food chain offering a variety of sandwiches and subs Founded in the summer of 1965, by Fred DeLuca and investor Dr. Buck
Strategy:
Formulating a unique value proposition Targeting an underserved customer segment Structuring an aggressive franchising model Expanding internationally
Marketing :
Eat Fresh
Slogan
Higher perceived value against competition Custom sandwiches tailored to customer Appeal to young professionals
Franchising:
International Growth:
1st entered into world market in 1984 in the Middle East nation of Bahrain International expansion approach at the time was
If you like Subway, you think its a good thing, and you think it would work in your country, then well teach you the concept and how it works and you go make it work in your country.
Used development agents to recruit franchises and assist in growth Core menu was left unchanged, with exception of religious and cultural consideration They believe the sandwiches will catch on and overcome cultural barriers 6
In summary, Subways success consisted of a strong brand based on a unique value proposition aimed at a dissatisfied target segment. The companys low-cost franchising strategy has allowed Subway to flourish both domestically and overseas.
The Asia-Pacific fast food market has experienced 11.7 percent growth between 1999 and 2003. The market was worth $77.9 billion in 2003, an increase of 55.8 percent since 1999. This growth is considerably stronger than the overall global market and is driven by the largescale expansion of the Chinese market 83 % In terms of value, Asia-Pacific represented 28.3 % of the global market in revenues for fast food in 2003.
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Competitors:
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Major Drivers of Traditional: Convenience, Global Fast Food price, and value. Also a Market Growth
New Drivers: Nutritional value and diversity of options
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Reputation as a decent place to eat Ethical consideration for local venues fast food can put them out of business Many fast food places seen as American or Western icons Can be dangerous in Middle East where protests and demonstrations are carried out at places like McDonalds
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All of the global concerns are Impact of Global particularly present in Asia Drivers and Concerns Largely stratified social class on the Fast Food makes location choice difficult market in Asia Many Asians eat with gloves or dont eat part of food they touch Majority of Asian population (83%) lives in rural areas and do not have convenient access to fast food venues
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Main drivers in Asia: Type of cuisine, price, convenient location, good hygiene standards, and health. Concerns in Asia: Hygiene and nutrition are two of the largest concerns in Asia Massive social stratification means many cannot afford even fast food In some poor areas, familyowned restaurants are the only way people can make a living
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Reception to fast food is large in many developed Asian economies and growing in others Trends favor places that offer a whole package which includes all of the regional drivers (Type of cuisine, price, convenient location, good hygiene standards, and health) Obesity in Asia is causing a push toward healthy low-calorie, low-fat alternatives to typical fast food (burgers) Eating at Western style places perceived as high class Fast food venues provide a place for many people to conveniently sit down and eat together. Eating together is very popular in 15 Asia.
Asia Important as Yes, absolutely a Market of Interest for The Asian-Pacific region Fast Food represented 28.3% of global revenue for fast food industry
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Questions?
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China, India, and South Korea Each country is not yet a large consumer of fast food Subway can still capitalize on first mover approach in these areas as economic growth is starting to become rapid
In the coming years, many people will be able to access and afford fast food in these currently lagging countries.
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CHINA Third largest economy at $10 trillion dollars 97 % of the population eat at fast food restaurants The demand for fast food increases with the economy, more disposable income Drive-thrus are increasingly popular, as well as eat-in restaurants Chinese people dont like to eat with their hands; introduce a subway salad bread bowl
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INDIA Exponentially increasing middle class Fast food market growing between 15 and 20% annually Indian food is very specific, needs adaptation between chicken, lamb, and fish Very high competition, but no real competitors in terms of sandwiches
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KOREA Fast Food market is growing 30% annually Increasing demand for healthy options Sandwich sales doubled in 2003 Young professionals and students are interested in healthy options and low calories
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Additional Questions?
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Thank you!
The End
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