SUBWAY IN THE US
Challenges of extending the product mix.
In this case study I would like to analyze Subway, one of the biggest fast food chains in the world, and its project to include a new kind of product in its offer – pizzas, alongside with the submarine sandwiches, which have become the symbol of the chain. First of all I would like to analyze the present external conditions relative to Subway business to outline an image of a market the company operates in.
Since Subway’s project to extend the product mix yet only considers US market, we do not need to analyze the global economy condition, where Subway operates, but only US. The market is currently in stage of long recovery from the crisis of 2008, with a few positive forecasts. The customers’ buying power for the fast food has not been considerably reduced by the crisis.
The current mindset of the customer base about the fastfood industry in the majority of areas of Subway operation is built around notions of accessibility, variety of choice, affordability and healthy food.
The size of the market of fast food worldwide continues to grow due to new emerging markets and sustained turnover in already saturated markets. The age frame of customers for the fast food market varies from country to country, but it mostly is around 18-45 years old, almost exactly similar to the frame set by Subway. Attitudes of nodern customers are experiencing a shight shift from accessibility and variety of choice to “healthiness” and freshness of the food provided, and Subway has been exceptionally successfull to introduce the fresh and healthy banner into its brand.
Competition on the fast food market is very high, with McDonalds, Burger King, KFC, Pizza Hut, Domino’s and Starbucks competing with Subway for the customers’ money. The strength of almost all...