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SWOT Analysis for Subway Sandwich Shops

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Produce SWOT analysis for this case: "Subway Sub Shops".

Reference: “Subway Sub Shops,” by William J. McDonald, reprinted from Cases in Strategic Marketing Management, 1998, Prentice-Hall, Inc.

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The strengths of Subway chain are that it is the undisputed market leader, with 10
times more locations than any other competitor and more than 75 percent of all
United States sub chain outlets. Subway is also ready to implement head-to-head strategy against McDonald's and Taco Bell by committing itself to offering value items, which is started by McDonald's. It started by introducing a line of 79-cent Rounds sandwiches. Furthermore, Subway's most important goal is to increase average sales volume per store, while decreasing operational costs. Thus, although growth is still a priority, Subway is placing an even greater emphasis on each individual store's volume and profitability.

Subway has some unique customer demographics in comparison with Arby's, McDonald's, and the other fast-food or drive-in restaurants whereby they could attract
younger crowd who are single or young adults with children more than its major competitors. In contrast to Arby's and McDonald's, Subway also has a much stronger franchise in the western United States whereby it is more skewed toward middle to upper income customers than McDonald's.

The next strength of Subway is the pool of advertising funds by all Subway
franchises that contribute 2.5 percent of weekly sales to the Subway Franchisee Advertising Fund Trust (SFAFT). Some franchises elect to contribute more than
this percentage. SFAFT is governed by a Board of Trustees consisting of 12 elected franchise owners from across the chain. The SFAFT Board meets each quarter to discuss all aspects of future chain-wide advertising. The owners of stores located in the same market will work together to purchase advertising that benefits the entire group. Each market also elects an Ad Chairperson to preside over all local meetings and to provide input on chain-wide SFAFT proposals. SFAFT also retains an advertising agency in order to help developing the chain's advertising campaigns whereby that agency ...

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