Subway is a leading sandwich chain, which operates through a wholly owned subsidiary, Subway Systems India. The caselet provides an overview of the product strategy followed by Subway that involved customization of its recipes and preparation to match the tastes and sensibilities of Indian consumers. The caselet also illustrates the franchising method adopted by Subway in India. Finally, it provides a brief description of the company's pricing and advertising strategy.

1. SUBWAY AND THE FRANCHISING CONCEPT

2. 41531047
Asif Mahmood Abbas

3. Summary
 Subway is a leading sandwich chain, which operates through a wholly
owned subsidiary, Subway Systems India.
 The caselet provides an overview of the product strategy followed by
Subway that involved customization of its recipes and preparation to
match the tastes and sensibilities of Indian consumers.
 The caselet also illustrates the franchising method adopted by Subway
in India.
 Finally, it provides a brief description of the company's pricing and
advertising strategy.

4. INTRODUCTION

5. Introduction
 The Indian fast food industry is pegged at Rs 20bn with an expected
annual growth rate of 40%.
 Several multinationals like McDonald's, Dominos and Pizza Hut have
established their presence in India.
 A new entrant is Subway, a leading sandwich chain, which, with 16,900
outlets in Canada and the US, has surpassed McDonald's branch
strength in these two countries.
 Worldwide, it has a total of 22,361 restaurants, spread across 78
countries.
 Subway operates in India through a wholly owned subsidiary, Subway
Systems India (Subway)

6. 41530004
Aminul Islam

7. SUBWAY AND THE FRANCHISING CONCEPT

8. SUBWAY AND
THE
FRANCHISING
CONCEPT
 Subway, the world’s largest restaurant chain, was founded
in 1965.
 A friend of DeLuca’s, Peter Buck, suggested him to open a
small submarine sandwich shop so he could earn some
money.
 At first Deluca was not excited about the idea, but after
thinking about it for a while, he became more interested.
 Buck promised to invest 1000$.

9. SUBWAY AND
THE
FRANCHISING
CONCEPT
 In the summer of 1965, Pete’s Super Submarines opened in
Connecticut, USA.
 Ten years later, in 1974, DeLuca and Buck decided to turn
their business into a franchise.
 The first international Subway restaurant was opened in
Bahrain three years later in 1977.
 During the last 44 years, Subway has expanded rapidly.

10. SUBWAY AND
THE
FRANCHISING
CONCEPT  Nowadays there are more than 30,000 Subway restaurants
in 90 countries.
 Approximately 150,000 people worldwide work for Subway.
 In 2006 Subway’s revenue jumped to 9.05 billion dollars

11. 41428092
Abu Reza Manzuriar Chowdhury

12. STRATEGY & STRUCTURE

13. Strategy
 The main goal of the Subway chain is to be ranked the
number one restaurant by consumers and in every market
that Subway serves.
 Furthermore, Subway does not specifically select the new
countries it enters.
 All Subway restaurants are owned and operated by local
business people, who choose the place for their Subway
restaurant.
 The franchisee buys the right to run a Subway franchise
 A development team will work with the new entrepreneur
to provide assistance in opening and running a Subway
restaurant within a new market.
 Subway will continuously provide assistance to make sure
that the franchisee gets all the basic information

14. Structure
 The Subway chain is the biggest franchise chain in the
world
 It employs about 150.000 people in more than 30,000
locations in 90 countries around the world.
 Subway has more than 700 development and support
people employed at the chains world headquarters in
Milford, Connecticut.
 Subway is a registered trademark of Doctor’s Associates Inc.
(DAI).

15. 41531029
Nani Gopal Kar

16. FRANCHISE ANALYSIS

17. Franchise
Analysis
 Training. Before opening the Subway restaurant the
franchisee has to take part in an intensive two-week
training.
 Site selection. Subway will help the franchisee to secure a
location for the new Subway restaurant.
 Restaurant design. Subway provides the franchisee floor
plans for the specific location.
 Equipment ordering. Subway provides the equipment that
the franchisee will need running the business.
 Access to product formulas & operational systems. Subway
offers training courses and information resources.

18. 41530077
Khan Mohammad Rezwan-ul-Akbar

19. PARTNERSHIP ANALYSIS

20. Partnership
Analysis
 If the value of the brand decreases, the franchisee loses
some of his competitiveness.
 Another disadvantage is that the franchisee is highly
dependent on the franchisor.
 It is Subway’s way or the highway, meaning that a
franchisee only has limited influence on strategic matters.
 The franchisee carries most of the risk in the cooperation,
as he is the one investing most money in it.
 Franchisee will have ongoing costs as he has to
continuously pay royalties and advertising fees to Subway.
 The low income levels in India which would make
McDonald’s unaffordable to most.
 Food habits in India that would take years to transform to
western tastes.

21. 41428082
Rehnuva Kawsar Nisha

22. KEY FEATURES

23. Key
Features  Target population Marketing is paramount at subway.
 Promotions can change weekly, even daily
 Almost all of the ingredients exactly right and used are fresh
 It requires no cooking in the store, aside from the baking of
the bread and cookies

24. 41222075
Md. Sharafat Hossain

25. STRENGTHS & WEAKNESSES

26. SWOT ANALYSIS
Strengths
 Size and number of stores and channels.
 Menu reflects demand for fresh, healthy and fast.
 Use of nontraditional channels.
 Partnering with the American Health Association.
 Worldwide brand recognition.
 Customizable menu offerings.
 Low franchisee start up cost.
 Franchisee training is structured, brief and designed to
assure rapid start up and success.

27. SWOT ANALYSIS
Weaknesses
 Décor is outdated.
 Some franchisees are unhappy.
 Service delivery is consistent from store to store.
 Employee turnover is high.
 No control over franchise situation in given market area.

28. 41531007
Md. Farukul Alam Patwary

29. OPPORTUNITIES & THREATS

30. SWOT ANALYSIS
Opportunities
 Continue to grow global business.
 Update décor to encourage more drive in business.
 Improve customer service model.
 Continue to expand channel opportunities to include event
wagons.
 Improve franchisee relations.
 Experiment with drive-through business.
 Expand packaged dessert offerings.
 Continue to revise and refresh menu offerings.
 Develop more partnerships with more producers and toy
manufactures to promote

31. SWOT ANALYSIS
Threats
 Franchisee unrest or litigation.
 Food contamination (Spinach).
 Competition.
 Interest costs.
 Economic downturn.
 Sabotage.
 Law suits.

32. THANK YOU