Subway Innovation Report
Subway Innovation Report
Subway is the name of a franchise fast food restaurant that mainly sells sandwiches and salads. It was founded in 1965 by Fred De Luca and Peter Buck. The corporation that owns the trademarked name of Subway is Doctor's Associates, Inc. (DAI). The company has over 28,400 franchised units in 87 countries as of September 2007 and is the fastest growing franchise in the world. It is currently the third largest fast food chain globally after YUM! Brands (34,000 sites) and McDonalds (31,000 sites).
In this Essay I will be generating my argument that Subway is an example of innovation in action through its products, processes and growth.
Subways strategy for growth lends itself to the cooperative nature of innovation. Subway has no company owned outlets, they are 100% franchised. This has allowed Subway to be a very good example of diffusion of innovation with the company being placed in the model rather than the consumers. Each subway franchise acts as its own business or is part of a mini chain of franchises; nonetheless this allows a large degree of innovation to occur since individual stores will become increasingly creative to meet the needs of their individual markets. This then allows the company as a whole to fit in to the diffusion of innovation model as innovators, early adopters and early majority. Below I will provide examples to clarify my argument.
In October 2007 Subway launched a Mobile/SMS back to school marketing campaign which allowed customers to receive coupons and product offers via text and redeem them at the till using codes they have been sent by subway to their mobile phones. The innovators were a group of 12 Subway stores in New York, as innovators they were part of a small group whom acted as risk takers were willing to invest early and were confident with enough financial clout to cover their prospective losses, the risk ended up being worthwhile with 13,000 SMS messages sent out 8.8% were redeemed out doing
Subway is the name of a franchise fast food restaurant that mainly sells sandwiches and salads. It was founded in 1965 by Fred De Luca and Peter Buck. The corporation that owns the trademarked name of Subway is Doctor's Associates, Inc. (DAI). The company has over 28,400 franchised units in 87 countries as of September 2007 and is the fastest growing franchise in the world. It is currently the third largest fast food chain globally after YUM! Brands (34,000 sites) and McDonalds (31,000 sites).
In this Essay I will be generating my argument that Subway is an example of innovation in action through its products, processes and growth.
Subways strategy for growth lends itself to the cooperative nature of innovation. Subway has no company owned outlets, they are 100% franchised. This has allowed Subway to be a very good example of diffusion of innovation with the company being placed in the model rather than the consumers. Each subway franchise acts as its own business or is part of a mini chain of franchises; nonetheless this allows a large degree of innovation to occur since individual stores will become increasingly creative to meet the needs of their individual markets. This then allows the company as a whole to fit in to the diffusion of innovation model as innovators, early adopters and early majority. Below I will provide examples to clarify my argument.
In October 2007 Subway launched a Mobile/SMS back to school marketing campaign which allowed customers to receive coupons and product offers via text and redeem them at the till using codes they have been sent by subway to their mobile phones. The innovators were a group of 12 Subway stores in New York, as innovators they were part of a small group whom acted as risk takers were willing to invest early and were confident with enough financial clout to cover their prospective losses, the risk ended up being worthwhile with 13,000 SMS messages sent out 8.8% were redeemed out doing
Bibliography: Books Tidd, J. (2005) Managing Innovation 3rd Edition, John Wiley and sons inc. Brassington, F (2006) Principle of Marketing 4th Edition, Pearson Education Ltd Davila, T. (2006) Making Innovation Work, Pearson Education Ltd Journals Batya, S. (1999) Innovation and Authority in Franchise Systems, 1-29 Websites www.subway.com, dates accessed various 20/10/07 – 5/01/08