The Professional Student: “Situation Analysis” Subway Sandwiches SWOT

Shawn,

Great job with this! Admittedly, I recorded and put my SWOT together this week but with the Easter holiday, held it until this morning to post. I am glad I took that path as listening to your own analysis was super insightful. Likewise, your selection of Subway was a super interesting choice, given their over saturation of many regional markets. They have also suffered some large marketing setbacks with their choice of paid endorsers (Jarrod).

One thing I really appreciated about your analysis, given you chose an existing business, was your company overview, which set the tone and helped each us to get a basic understanding of the organization’s framework. I chose a prospective business, thus I may need to think of how to best outline what is a less than formed structure. Your notation of Roark Capital purchasing Subway was an interesting development, given we know they currently own Jimmy John’s as well. This makes one wonder if a potential merger or acquisition strategy may be on the horizon. Transparently, this may be another potential opportunity and/or threat as well within your analysis.

Moving on, in terms of strengths, while the “fast” in “fast food” seems somewhat inherent, Subway’s ability to offer healthy fast food is a genuine strength in that market. We often see Subway locations within other businesses, such as Wal Mart or gas stations and this is because they can prep quickly for those on the go. In turn, while it may be a strength shared by other competitors, you may think about adding speed to that list. Likewise, you have advertising strategies and franchising listed, though diving deeper into the national support offered to franchisees is potentially something worth elaborating on. For those who own a franchise, the national exposure and marketing support can be a make or break deal (as someone who has delved into the franchise model, I can promise this is true).

In terms of weaknesses, you mentioned it earlier, but you may also think about adding over saturation of locations. Currently, in my town of Denver NC, there are three Subway locations. While they have been sustained, this makes profitable operations for potential franchise owners much more difficult to achieve and thus, less attractive investment options. Another potential option that may get lost, given their “Eat Fresh” motto, their reliance upon timely and fresh produce and meats could also be considered a weakness. Sure, this is a selling point but with supply chain and logistics issues magnified across the world, what happens if they are unable to get these supplies?

Wrapping up with opportunities and threats, great job! Delivery is an interesting choice for opportunities, though as someone who has been involved with Jimmy John’s franchises in the past, I have seen the value of that service handled in house go dramatically down. The onset of Uber Eats and other ordering applications has lessened the impact of in house delivery tremendously, as consumers now have options for delivery almost anywhere through outside vendors. I still look back to the capital group that owns Subway and have to think about a potential M&A strategy that could be on the horizon, whether this is merging Jimmy Johns and Subway or spinning off an entirely new entity. We are seeing the Sub industry become more and more saturated and as such, this could be something feasible down the road. You did a nice job calling this saturation out in your threats, thus given that position, what opportunities could the parent company use to counter? I believe M&A could be one of those potential remedies. Finally, great job calling out potential legal issues as a viable threat!

Cheers,
Zane Breeding

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