Doctors Associates, Inc. (Subway)

(3) Describe the company’s customers (households, businesses, schools, governments, etc.) To what extent does the company depend of international customers?
--The company’s primary customers are households. Breaking this category down further, the company has chosen to target the traditional fast food enthusiast. Also, Subway has targeted non-traditional customers at locations such as convenience stores and truck stops. In 2010, Subways revenues from global sales were 15.2 billion. Subway has around 37,000 stores in 100 countries, 23,334 being U.S. stores and 13,664 being international stores. This means that international stores account for around 36% of Subways sales, and as such international customers do play a role in revenue generation for Subway.
(4) Discuss the major determinants of demand for the firm’s primary product. Explain your choice of variables. If necessary, describe how determinants differ across customer segments
-- The demand of types of sandwiches depends on the weather and income level of the local community. In winter hot sandwiches including meatballs and chickens along with soups are in most demand while in summer sandwiches like orchard chicken (content: chicken, cranberry, apples, raisins-most of the cold contents) tuna fish and other cold sandwiches are sold more than any others. Also the subways in rich community’s sale diet conscious sandwiches like turkey, Italians, chicken while a highway or area containing labor communities experience higher sales of protein based subs like steaks and chicken breast. Also, the sandwiches on sales or the cheapest subs are sold more in these stores.
(5) Perform a complete Industry Analysis based on Porters Five Forces Framework. Based on this analysis, how would you describe the market structure of the industry in which the companies operate?
--Buyer Power: In terms of buyer power Doctors Associates, Inc. does not have that big of an influence on purchasing in the industry. Even though they have an extremely large number of sales there are many other fast food restaurants that buy those same inputs for their restaurants as well. Supplier Power: In terms of Doctors Associates, Inc. having supplier power over their customers, I would say they have very little. There are many other restaurants people can visit and as such they must keep their prices low in order to compete.
Rivalry: In terms of industry rivalry there are a large amount of firms that are competing for market share; this causes our firm to lower prices in order to compete with these other firms. Substitutes: In terms of fast food, there are many substitutes for Doctors Associates, but when we focus on the deli-sub component there are only a few substitutes, which gives Doctors Associates somewhat of an advantage in this area.
Entry Barriers: In terms of endogenous entry barriers our firm must make decisions on where to open shops and must focus on the particular target market they are trying to advertise to. I believe Subway has created some entry barriers in terms of brand loyalty, many people recognize the name immediately and realize that they are going to be purchasing a quality sub.