According to the 4 Ps approach, Subway is facing a list of issues, and they are presented below.
- Product issues: The business deals with low-quality food because fresh vegetables are delivered once a week. Then, the company does not serve real food since DNA testing reveals that a part of the ingredients is natural. Finally, Subway’s menu fails to meet current dietary trends and, therefore, customers’ expectations.
- Price issues: Subway long benefited from its $5 footlong promotion, but it also resulted in adverse consequences. The customers are accustomed to this offer, which made them unwilling to pay higher and more reasonable prices.
- Place issues: The business relies on franchising as its growth strategy, which contributes to significant success in the late 20th century. However, Subway soon oversaturated the market, increasing the probability of market cannibalization. The owners created 100 regional areas to control the development of franchises, but responsible persons, franchisees, were interested in closing restaurants.
- Promotion issues: The promotion focus was placed on Jared Fogle, who managed to lose 245 pounds by following the so-called “Subway diet.” Fogle’s 2015 arrest resulted in significant damage to the company and its image.
When it comes to product-related issues, it is possible to state that specific interventions can address them. In particular, the focus on local supply chains can be considered a suitable option. According to Alsetoohy et al. (2021), this practice contributes to a business’s sustainability and meeting customers’ expectations. Subway can find local farmers and distributors that will provide the restaurants with daily deliveries. This approach will ensure that food ingredients are fresh and of high quality. In addition to that, the company should modify its menu to satisfy current trends, including plant-based and keto diets.
A significant problem emerged because the market was oversaturated with Subway franchises. This condition is a typical by-product of the expansive growth of a franchise network (Tien & Ngoc, 2019). One can suppose that assigning a professional or a group of experts is a suitable intervention to address this issue. This individual or body should be responsible for determining whether it is rational to open a new restaurant in the selected area. Simultaneously, this professional or group will provide an assessment of the open franchises, and this analysis should be objective because the experts will not be connected to any franchisee.
In addition to that, Subway should address the negative price-quality perceptions created by overusing a $5 footlong deal. It seems that launching an open promotional campaign should be a suitable option. Customers should understand the message that the company is forced to increase the price, but clients will obtain improved quality instead of it. This improvement refers to fresher and 100% natural ingredients that are delivered by local and reputable farmers and distributors. It is possible to expect that the clear articulation of this new strategy can help customers understand and agree to new prices.
I think that Subway can solve the existing challenged and replenish the company. Firstly, the business has a rich history, meaning that it is experienced in addressing issues and resolving them. Secondly, the organization is still offering attractive conditions, including licensing fees and start-up costs, meaning that further growth is possible. Finally, Subway has a strong international image, meaning that it still has a significant competitive advantage over its rivals. These factors can help the organization successfully overcome the existing issues.
References
Alsetoohy, O., Ayoun, B., & Abou-Kamar, M. (2021). COVID-19 pandemic is a wake-up call for sustainable local food supply chains: Evidence from green restaurants in the USA. Sustainability, 13(16), 9234.
Tien, N. H., & Ngoc, N. M. (2019). Comparative analysis of advantages and disadvantages of the modes of entrying the international market. International Journal of Advanced Research in Engineering and Management, 5(7), 29-36.