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Submitted by lcarr on April 20, 2006
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Marketing Management Case Analysis
Subway® Sandwich Shops
Abstract
Subway® Sandwich Shops was founded in 1965, and has been franchised into the hearts and stomachs of families all around the world. This highly successful sandwich shop was the dream of high-school graduate Fred DeLuca. With the financial help of long-time friend Dr. Peter Buck, Fred opened the first Subway Sandwich Shop in Bridgeport Connecticut in 1965. By 1974, the pair had opened over 16 shops around Connecticut. In the year 2004, the SUBWAY® chain entered its 39th year of operation. It is the world's largest submarine sandwich chain with more than 21,000 restaurants in 75 countries. As a matter of fact, the SUBWAY® chain operates more units in the US and Canada than McDonald's® does (www.subway.com). Subway® currently operates 23,983 restaurants in 84 countries, and because of its' marketable success, the company was selected to be the subject of a marketing analysis.
The fast food landscape continues to evolve, and one of the most dynamic segments within the Quick Serve Restaurants market continues to be sandwiches, subs and wraps. Driven by consumer interest in healthier food choices and a growing demand for premium ingredients, sandwich chains are expanding locations as well as variety. In real terms, the sandwich, subs and wraps market has grown 70% since 1999, or from $9.9 billion to an estimated $16.8 billion in 1999-2004. Primarily Subway®, Quiznos, and Panera Bread have fueled growth and momentum. Regional chains have also seen significant revenue growth, contributing further momentum to the marketplace. Growth is driven through a combination of aggressive franchise strategy coupled with tactical marketing campaigns and innovative menu concepts that appeal from both a demographic, as well as a health standpoint (Mintel Int'l Group, 2005).
In response to its newfound competition, Subway® has responding...
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