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Subway Franchise Opportunity - PowerPoint

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					DIFFERENTIATION & POSITIONING OF
      FAST FOOD COMPANY
                         Fast food
 Professor: Cheng – Nan Chen
 Students: Lim Veron Nardy –M987Z210
            Yoseph Kaburuan –M987Z213
            Sermsri C.      –M987Z220
            Lee Po Kun      –M9870114
            Nguyen Duy      –M987Z218
            Pham Thi Nguyet –M987Z241
CONTENTS
   Introduction
   Previous position and challenges
   Marketing Environment (Micro & Macro)

   Subway SWOT analysis

   New strategy to repositioning – differentiation

   Conclusion and Recomendation

   Question Discussion
INTRODUCTION-FAST FOOD


   Fast food is the term given to food that can be
    prepared and served very quickly.

   Fast Services Food = General term used for a
    limited menu of foods that lend themselves to
    production-line techniques; suppliers tend to
    specialize in products such as hamburger,
    pizzas, chicken, or sandwiches.
 Fred DeLuca founded the SUBWAY® chain in
  Connecticut, USA, in 1965. The company has
  since grown into a multi-billion pound business,
  with 31,949 outlets in 91 countries.
 The SUBWAY® chain aims to increase the
  number of outlets it has in the UK and Ireland
  to over 2,000 stores by 2010.
 In 2009, the
SUBWAY® chain
was ranked the
  number one
    franchise
 opportunity by
  Entrepreneur
   Magazine.
 In 2008, the SUBWAY® chain was voted the
  No. 1 sandwich provider in the British Sandwich
  Association’s (BSA) sandwich industry report.
 In most years, about 70% of new SUBWAY®
  franchises are sold to existing SUBWAY®
  owners.
 The low fat menu is popular with customers all
  around the world.
JARED FOGLE

 Diet Start Date: Mid-
  March 1998
 Height: 6' 2''

 Starting weight: 425
  pounds
 Current weight: 190
  pounds
The Jared Diet:
   New healthier sandwiches: less than 7
    grams of fat
   Menu for lunch: Six-inch turkey, no mayo, no
    oil, hold the cheese
   Menu for dinner: A footlong veggie, baked
    potato chips, diet beverage
MCDONALD’S

Background - The McDonald's Story
 The McDonald's story began in 1940 when Dick
  and Mac McDonald opened a highly successful
  car-hop, barbecue restaurant in San Bernardino,
  Calif.
 They temporarily closed their restaurant, built a
  simplified menu around their best-liked products,
  designed a more efficient interior and re-opened
  with self-service at the former car hop windows.
                McDonald’s
 Thus, they invented the self-service, drive-in
  concept that was a limited-menu, paper-
  service, hand-out operation, featuring 15-cent
  hamburgers, 19-cent cheeseburgers, 20-cent
  malts and 10-cent French fries.
 After a slow start, business boomed. In 1952,
  American Restaurant Magazine ran a cover
  story on the phenomenal success of the
  brother's new concept.
                McDonald’s
In 1955, Ray was granted exclusive rights by the
brothers to develop and franchise McDonald's
drive-ins for the United States. Ray formed
McDonald's System, Inc. in 1955. Ray opened the
9th McDonald's, his first, in Des Plaines, IL, in
April 1955. In 1961, Ray bought from the
McDonald's brothers the proprietary rights to the
McDonald's system, including all rights to the rest
of the world. The organization that Ray founded --
today's McDonald's Corporation -- proceeded to
add more than 23,000 McDonald's restaurants
and 4,500 franchisees across more than 111
countries around the world.
MCDONALD’S STRANGE MENU AROUND THE
WORLD

India
 In India, there are no
  Big Macs because
  the Hindu people
  don’t eat beef.
 However, they have
  the Maharaja Mac,
  which is a Big Mac
  made of lamb or
  chicken meat. There
  is also a vegetarian
  burger, the McAloo
  Tikki.
MCDONALD’S STRANGE MENU AROUND THE
WORLD
Germany
 It’s bottoms up in
  Germany, where
  McDonald’s
  serves – Beer!
MCDONALD’S STRANGE MENU AROUND THE
WORLD

CANADA
 In parts of
  Canada, have a
  lobster dinner
  with the
  McLobster
  lobster roll.
  Pardon me –
  “McHomard” (in
  French).
MCDONALD’S STRANGE MENU AROUND THE
WORLD

JAPAN
 Japan totally reinvents
  McDonald’s with its Ebi
  Filet-O (shrimp burgers),
  Koroke Burger (mashed
  potato, cabbage and katsu
  sauce, all in a sandwich),
  Ebi-Chiki (shrimp nuggets)
  and Green Tea-flavored
  milkshake!
MCDONALD’S STRANGE MENU AROUND THE
WORLD

NORWAY
 In fish-loving Norway,
  they have the McLaks,
  a sandwich made of
  grilled salmon and dill
  sauce.
MCDONALD’S STRANGE MENU AROUND THE
WORLD

HONG KONG
 Rice-loving Hong
  Kong, has – of course
  – Rice Burgers, where
  the burgers are in
  between, not burger
  buns, but two patties
  of glutinous rice.
PREVIOUS POSITION & CHALLENGES
                               Subway
                                                    Create brand name
                                                     relied on one main
                                                    kind of product (foot
                                                       long sandwich)


  Was known more for
its belly-busting foot long
    sandwiches and its                                    Accessible
 gaudy yellow décor than                               (subway stations)
     for anything else

                              For the busy and on-the-go
                              people who have to eat on
                                    the way to work.
CHALLENGES - SUBWAY

     Subway needed a makeover
       A new positioning in the           Market wants fresher,
   marketplace – something that
  would distinguish Subway from its         healthier menu.
 fat and sugar purveying competitor



                            Challenges

                                            The Subway stores are not
  Many people have diseases that         welcoming- the place are damped
 are linked to eating fast foods such
                                        and the service crews were not very
       as obesity and diabetes.
                                                    courteous.
MCDONALD’S



  A truly
                            Last
  global      But does
                          quarter      Where
company:        not
                         2002 loss     might it
present in   guarantee
                           for the    be wrong
   118        success
                         first time
countries
  CHALLENGES – MCDONALD’S
                                    Consumers want and need: increasingly
                                   want variety and are becoming much more
                                                health conscious

Mc Donald’s has been taken to court with                         Environment: Be challenged in
 the issue their food can lead to obesity.                        some country markets local
                                                                          company



     They have neglected the
  competition of other fast food                                     Poor Consumer Satisfaction
   chains which could give the                                         Index: Survey in 2001
    customers an alternative.




           1980s, increased new store                Lawsuits: McDonald’s caused obesity in
           openings that made a loss of             children due to the high sugar and fats in
                   profitability.                            their burgers and foods
 MACRO ENVIRONMENT
 DEMOGRAPHIC ENVIRONMENT


* Age Structure
       Young people become the target of
  fast food industry.
      The younger the person, the more
  they eat out at fast food restaurants.

*Working Woman
  The increasing number of working
  woman, makes the need of fast
  food service growing.
MACRO ENVIRONMENT (CONT.)
CULTURAL ENVIRONMENT


   The young people attend to eat together with
    friends or co-workers.

   The raise of health consciousness.

   The need of natural product and demand from
    customer for company
MACRO ENVIRONMENT (CONT.)
ECONOMIC ENVIRONMENT

  Families that have more money eat out more.
 The larger the family, the less they eat out, but
  the times they do eat out, they visit fast-food
  restaurants more.
 People spend more money on fast food than
  they do on higher education, personal
  computers, software or new cars. They spend
  more on fast food than on movies, books,
  magazines, newspapers, videos and recorded
  music - combined.
  MICRO ENVIRONMENT
  COMPANY – TOP MANAGEMENT

Mission            Healthy food – healthy world




Objective          - One of the world’s fastest growing industries
                   - Provide quality fast food with international standards, taste
                   and freshness

Broad strategies   - Remake image
                   - Reposition for a global future
                   - Sign up franchisees and open new stores as more as possible
                   - Build up the reseller and wholesaler system all over the world
Policies           - Quality – safe – clean
                   - High brand awareness and preference
MICRO ENVIRONMENT
CUSTOMER
                                 CONSUMER MARKET
                           Pay attention to special customer
                          segment in each country, each city
                                    and each area.
                           There are many demands, needs
                           and wants in each area. Fast food
                              company makes use of the
                          characteristics, culture and taste to
                              develop product suitable to
                                   customers there.


    INTERNATIONAL MARKET
The market is very important for                             BUSINESS MARKET
a fast food company to maintain                       To develop this market, fast food
   its position worldwide and                               companies almost use
        obtain customers.                                “franchisees” as marketing
     - McDonalds has set up                            strategy to find out and set up
   31,000 location worldwide.                            restaurant system globally
MICRO ENVIRONMENT (CONT.)
COMPETITOR
   Most of fast food companies have competitive marketing
    strategy globally to get the target - “Become the number one
    position in fast food industry” with healthy product.
   Franchisee is one of the most popular meanings in
    marketing strategy.
   Build up the large restaurant system as more as stronger.
   List of fast food restaurants:
       McDonald’s
       Burger King
       Subway
       Pizza Hut
       Yum!
       A&W Restaurants
       And so forth.
MICRO ENVIRONMENT (CONT.)
MEDIA PUBLICS
         SUBWAY SWOT ANALYSIS-
              STRENGTH
1.Image
The essentials of the Subway “eat fresh” Image
2. Transparency of Preparation
At Subway Restaurants you can see all ingredients
YOU choose for your Sandwich.
You can observe every step of preparation in front of you
You are always asked for every single vegetable in order
to focus you on the “live preparation”
3.Emotional and psychological items
The colours and materials that are used for furnishing &
the design elements of a Subway Restaurant are always
natural: wood tones, brown, green and red
    SUBWAY SWOT ANALYSIS-WEAKNESSES

 Its competitor, such as McDonalds, provide
   sophisticated service 24 hours open
 focusing on people want to diet

                OPPORTUNITY
 health eat style is a trend
 In some country, subway is not very well-known
      SUBWAY SWOT ANALYSIS-THREATS

   Shops fast food appear more and more over the
    world
    Competitor:
    Reduce price: McDonald’s retaliated by reducing
    the price of it burger to 99 cents in the US and 99
    pence in the UK.
    Understand customer’s need: Jollibee in the
    Philippines, which had a similar business model to
    McDonald’s, offered adaptation, such as spicy
    sauces that appealed to the local markets
New strategy to repositioning
Transparency of Preparation
   •   All ingredients for your Sandwich.
   •   Observe every step of preparation
   •   “live preparation”
   •   The nutritional information provided for insight and online


Emotional and psychological items

   • The nature color materials: wood tones, brown, green and red
   • Subway Restaurant surrounding: eating food and fresh food.
   • Friendly atmosphere and a feeling of trust
US TV Commercial Series
“Subway Dinner Theatre”

Three TV spots for three target groups
Three different situations
Three main messages: Value and quality; Subs
are easy and fast to get; non-comlexity of
eating at a Subway restaurant

The testimonal: Every TV spot has an intro
with a well known person who identifies
himself with Subway food. At the end of every
TV spot he speaks out the Subway Slogan “eat
fresh”
                 Repositioning


   Update the stores’ interiors

   Open new Subway’s stores in US and
    abroad

   Using the images of fresh tomatoes and
    other vegetables in New York subways
    system
     Personality &                 Sports & Activities Associates
      Character                          Healthy Nutrition
   At MD the emotional        •     MD sponsors lots of sports
    “free like home” and             events and charity events
    “have fun” messages are    •     The engagement in indirect ads
    dominant.                        for a life style that MD identifies
                                     with.
   No transparency of         •     Meeting point for young people
    preparation, BUT                 who want to have fun combined
    engagement and                   with easy and fast food
    friendship giving the      •     Supporting various events MD
    customer confidence              uses the media to push its
    concerning healthy food.         image and make the name
                                     omnipresent – no chance to
   No direct “fresh” and            escape
    “healthy” attributes in
    main advertisement –
    fact treated as an
    assumption
          Some activities and PR
          campaigns in 2006


   “Bag a meal”
   “Who’s next basketbal”
   “Sports”
   “I am Asian”
Main Target Group
•      Young people                       •   Children, young people
•      People at work, health conscious   •   People at work, on vacation,
    of Subway                                 eating for fun



Association & Sponsorships
    RECOMMENDATION AND CONCLUSION
•McDonald’s has improved their menus by adding up fresh green
salad, which implies healthiness.
• Aside from this, they could adapt into the environment where
they are in and give out tastes that could relate to different
countries.
• Fast food industry has to supply various products and they are
much more healthy.
• Due to fast food, people do not have to spend more as much
time on making their own food, doing their taxed or travel.
• Fast food companies has been conducting marketing strategy to
create new image and reposition for a global future.
•Franchise is a global system to build up a global brand in fast
food industry.
 Question
Discussion
                  QUESTION 1:

WHAT DO YOU CONSIDER TO BE THE DEFINITION OF
GLOBALISATION? WHAT FORCES ARE DRIVING ITS
              DEVELOPMENT?

Answer:
 Globalization is the system of interaction
  among the countries of the world in order to
  develop the global economy.
 2 main forces are driving it:
   Thedevelopment in fast technology
   Condition of economy.
                 QUESTION 2:

IDENTIFY THE REASONS WHY GLOBAL STRATEGIES
SOMETIMES FAIL IN THEIR OBJECTIVE TO ACHIEVE A
       GLOBAL MARKETING ADVANTAGE?

Answer:
 Because the global strategies only focus on
  enlarging more and more stores over the
  world, this make a surplus to customer
  demand while they don’t focus on caring
  much about the change in eating tendency
  of customer .
                 QUESTION 3
WHAT IS THE RATIONALE BEHIND MEGA MERGERS
AND MAJOR ACQUISITIONS? HOW WILL THEY LEAD
     TO GLOBAL COMPETITIVE ADVANTAGE?
Answer:
International Competition. Mergers can help firms deal
   with the threat of multinationals and compete on an
   international scale
Mergers may allow greater investment in R&D This is
   because the new firm will have more profit. This can
   lead to a better quality of goods for consumers
Greater Efficiency. Redundancies can be merited if they
   can be employed more efficiently
                         QUESTION 4

    WHAT ARE THE CRITICAL SUCCESS FACTORS IN DEVELOPING A
     GLOBAL BRAND? WHAT ADDITIONAL FACTORS WOULD YOU
    CONSIDER TO BE NECESSARY IN DEVELOPING A SUCCESSFUL
                  GLOBAL E-BUSINESS BRAND?

     Answer:
 Critical success factors:
 adapting the strategy to country-specific
  situations
 effectively communicating the brand across the
  world (both within and outside the
  organization).
 Successful global e-business brand
                    QUESTION 5
  WHAT ARE THE MAIN CHALLENGES THAT ARE FACED BY
     INTERNATIONAL MANAGERS IN MANAGING AND
  CONTROLLING A GLOBAL MARKETING STRATEGY? WHAT
   ADVICE WOULD YOU GIVE TO A MANAGER WITH THIS
                  RESPONSIBILITY?
Cultural and environmental differences are the
main challenges that are faced by international
managers in managing and controlling a global
marketing strategy. Key words include eating
habits, GDP, economic, political situation
competition. For example, Different countries have
different eating habits. The Chinese have a saying
“Good things for breakfast. Eating a big meal for
lunch but eating less at dinner.”
                          CON’T
Many Americans agree that one should start the day with a
good breakfast, but their ideas about lunch and dinner are
different.
Most Americans only give themselves a short time for
lunch. So they eat a small lunch. After work they will have
more time to eat a big dinner. Also a quiet dinner at home
with all family talking about their day is a way to take a
good rest after a long, hard day of work.
The manager must monitor environments which impact
consumer behavior very closely, in order to develop
forecasts, goals, and plans for international activities.
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