Business, Management

Subway SWOT Analysis & Recommendations

Updated on Updated on by Lisa Brown
Subway SWOT analysis, strengths, weaknesses, opportunities, threats, competitive advantages, quick-service restaurant chain business case study
A Subway restaurant in Texas. This SWOT analysis of Subway indicates business opportunities and threats that require the company to utilize its strengths and overcome its weaknesses in foodservice operations. (Photo: Public Domain)

This SWOT analysis of Subway assesses the strengths, weaknesses, opportunities, and threats relevant to the foodservice business organization and its performance in the global market. Internal factors (strengths and weaknesses) determine the company’s capability to achieve its goals, while the external factors (opportunities and threats) shape the condition of the fast-food market. Reaching strategic goals based on Subway’s mission statement and vision statement requires optimizing the business organization for the internal and external factors considered in this SWOT analysis. Competitive advantages and strategic fit based on this SWOT analysis indicate Subway’s position as a strong competitor in the international foodservice market.

This SWOT analysis of Subway includes an internal analysis of the company’s strengths and weaknesses, and an external analysis of the opportunities and threats in the fast-food restaurant industry. The combined effect of these SWOT factors (strengths, weaknesses, opportunities, and threats) requires strategies for Subway’s competitive advantages for organizational improvement and growth based on business opportunities despite threats in the industry.

Subway’s Strengths

The competencies and competitive advantages of the quick-service restaurant chain are the strengths considered in this part of the SWOT analysis. The following are Subway’s strengths:

  1. One of the largest networks of franchise locations
  2. High brand equity
  3. Differentiated products

The dominant market presence of Subway franchise locations is a business strength in this SWOT analysis case. Also, Subway’s high-equity brand contributes to customer loyalty and the stability of the company’s market share. These internal factors are competitive advantages that support success in introducing new food and beverage products, as well as in establishing new store locations. Product design and emphasis on quality are another strength in this SWOT analysis of Subway. This strength relates to a limited degree of differentiation that helps the company set its products apart from competitors, especially those that sell mainly hamburgers and fries. Subway’s generic competitive strategy and intensive growth strategies use these strengths for competitiveness and business growth despite the weaknesses and threats considered in this SWOT analysis.

Subway’s Weaknesses

The internal issues, barriers, and problems in the fast-food restaurant business are the weaknesses assessed in this part of the SWOT analysis. The following are Subway’s weaknesses:

  1. Imitability of the business model
  2. Imitability of food and beverage products
  3. Low diversification
  4. Weak market presence in some regions

Subway has an imitable business model and imitable products. These internal factors are weaknesses in this SWOT analysis case of the foodservice business. For example, local establishments can develop similar business models and similar menu items that compete with Subway. Low diversification is another weakness that can hinder the business growth of the multinational quick-service restaurant chain. The focus on submarine sandwiches and salads limits potential revenue growth and is considered a weakness in this SWOT analysis of Subway. Moreover, the fast-food company has a weak market presence in some regions, such as the Middle East and Africa. This weakness limits revenues from such regional foodservice markets despite the company’s competitive advantages. Subway’s weaknesses in this SWOT analysis point to the importance of innovation and market penetration.

Subway’s Opportunities

External factors and trends that provide or facilitate the improvement and growth of the foodservice company are considered in this part of the SWOT analysis. The following are Subway’s opportunities:

  1. Growth through product development for healthy lifestyles
  2. Growth through business diversification
  3. Growth through further market penetration in some regions

Consumers are increasingly preferring healthier food options. Healthy lifestyles and the other trends shown in the PESTLE/PESTEL analysis of Subway create conditions that are opportunities in this SWOT analysis. For example, the company can invest more in product development to provide products that match consumer demand for healthier sandwiches and drinks. Business diversification is another opportunity in this SWOT analysis of Subway, considering the company’s current focus on its existing foodservice operations. The company has revenue growth opportunities through new operations, like what McDonald’s is doing with McCafé and other ventures. Moreover, market penetration is another opportunity for Subway. This opportunity addresses the company’s weak market presence in some regions, like Africa and the Middle East. Developing Subway’s marketing mix (4Ps) can facilitate market penetration to grow the business based on this opportunity and the competitive advantages and strengths assessed in this SWOT analysis.

Threats to Subway

External barriers and challenges to the submarine sandwich business are assessed in this part of the SWOT analysis. The following are the threats to Subway:

  1. Competition in the saturated foodservice market
  2. Imitation of food and beverage products
  3. Food supply disruptions

Foodservice market saturation comes with aggressive competition, which is a threat in this SWOT analysis. Subway competes with multinational fast-food firms, such as McDonald’s, Wendy’s, and Burger King, as well as coffee-focused foodservice chains, like Starbucks. Many local and regional firms also add to the threat of competition, which is a strong strategic influence shown in the Five Forces analysis of Subway. The threat of imitation is based on the imitable characteristics of the company’s products, such as salads and sandwiches. Moreover, food supply disruptions due to conflicts and ecological issues are a threat in this SWOT analysis of Subway, pointing to the importance of diversifying the company’s supply chain for stable operations.

Subway SWOT Analysis – Recommendations

This SWOT analysis of Subway shows business opportunities despite the saturation of the foodservice market. The company’s strengths and competitive advantages provide the foundation for reducing its weaknesses and mitigating the impact of threats in the fast-food restaurant industry. Based on the internal and external factors assessed in this SWOT analysis, the following recommendations are applicable to Subway:

  1. Develop new ventures or related business operations to grow the company using current competitive advantages, including Subway’s brand and network of franchisees.
  2. Continue enhancing products to improve their health benefits and grow the business based on healthy lifestyles and related market trends identified in this SWOT analysis.
  3. Implement a more aggressive market penetration strategy for regions where Subway has a weak presence, such as the regional markets of Africa and the Middle East.

References

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