Why Subway Succeeds and Struggles: A Business Analysis
This paper examines the business factors that have contributed to Subway's global growth as a franchise-based quick-service restaurant, as well as the significant challenges the brand has faced. On the success side, the analysis highlights Subway's early emphasis on low-calorie and vegetarian menu options, its flexible franchise model, non-traditional outlet placement, and effective low-cost marketing. On the challenge side, the paper discusses the reputational fallout from the Jared Fogle scandal, food safety violations, competitive disadvantages against McDonald's in revenue, and expert criticism of Subway's nutritional claims. Together, these factors offer a balanced picture of Subway's competitive position in the fast food industry.
- Introduction: Subway's Market Position: Overview of Subway as a low-cost franchise
- Factors Behind Subway's Success: Health image, flexibility, marketing, and global expansion
- Challenges and Controversies Facing Subway: Scandals, food safety, revenue gaps, nutrition criticism
- Conclusion: Balanced assessment of Subway's competitive position
✍️ How to write this paper — guide, tools & examples ▾
What makes this paper effective
- The paper is well organized around a clear problem-solution structure, separating Subway's strengths from its weaknesses in a logical, readable sequence.
- It supports each claim with specific data points — such as the 98-country expansion figure and McDonald's $35.6 billion in system-wide sales — grounding the analysis in concrete evidence.
- The paper demonstrates balanced critical thinking by acknowledging both the brand's genuine innovations (early health-focused menu) and real vulnerabilities (food safety failures, healthiness disputes).
Key academic technique demonstrated
This paper demonstrates the use of comparative business analysis: Subway's performance is consistently measured against McDonald's as a benchmark competitor. This technique strengthens the argument by providing an external reference point that contextualizes Subway's relative strengths and weaknesses rather than evaluating it in isolation.
Structure breakdown
The paper opens with a brief framing of Subway's market identity, then moves into a strengths section covering franchise consistency, menu appeal, non-traditional locations, and marketing. The weaknesses section addresses the Jared scandal, food safety issues, revenue gaps versus McDonald's, and nutritional critiques. A references list closes the paper. The structure mirrors a standard SWOT-style business memo, making it a useful model for short analytical assignments.
Introduction: Subway's Market Position
Subway is a relatively low-cost restaurant that provides a consistent product across its wide range of franchises. It operates a franchise-only system, further adding to the homogeneity of its product regardless of where the customer is dining. Because virtually everyone eats sandwiches and salads, the franchise enjoys broad consumer appeal. This paper examines both the factors that have driven Subway's global success and the significant challenges that have threatened its brand.
Factors Behind Subway's Success
Subway offered many low-calorie, low-fat, and vegetarian items long before such options were fashionable, adding to its credibility in the health-conscious eating space. Sandwiches are made to order in front of the customer, further reinforcing the brand's image of freshness and health. Although Subway offers a standardized menu, it has been flexible enough to adapt to the needs of international markets. In 2011, Subway could boast that it had expanded into 98 countries with "one store for every 200,000 people in the world" (Smith, 2011, p. 1).
Subway also opened locations in many non-traditional outlets, such as Walmart stores, capitalizing on the lack of competition and the desire of shoppers to grab a quick snack. It had over 1,600 Walmart locations in 2011 (Smith, 2011, p. 1). Other popular non-traditional venues include hospitals, colleges, sports arenas, and airports (Wong, 2014). Unlike some other fast food outlets, a Subway restaurant can be operational in a space as small as 300 square feet (Wong, 2014), giving the brand exceptional location flexibility.
Subway's quirky advertising campaign for its $5 Footlong stressed both the iconoclastic image of the brand and its low cost (Wong, 2014). This combination of affordability and a health-forward identity helped the chain outpace McDonald's in number of locations across many areas of the United States and the world (Wong, 2014).
Conclusion
Subway's rise to global prominence reflects a well-executed franchise model, an early commitment to health-conscious menu options, and a creative approach to outlet placement and marketing. However, its brand has been tested by the Jared Fogle scandal, food safety violations, a significant revenue gap compared to McDonald's, and persistent expert skepticism about its nutritional claims. A full understanding of Subway's competitive position requires weighing these considerable strengths against its equally significant vulnerabilities.
References
Hullinger, J. (2015). Inside a PR disaster. Fast Company. Retrieved from http://www.fastcompany.com/3048525/lessons-learned/inside-a-pr-disaster
Marler, B. (2010). Subway hit with another foodborne illness outbreak — this time bacteria, not viral. Food Poison Journal. Retrieved from http://www.foodpoisonjournal.com/foodborne-illness-outbreaks/subway-hit-with-another-foodborne-illness-outbreak-this-time-bacteria-not-viral/
McDonald's selling more than Subway, Wendy's, Burger King, Chick-fil-A combined. (2015). The Huffington Post. Retrieved from http://www.huffingtonpost.com/2013/07/29/mcdonalds-sales_n_3671043.html
Smith, D. (2011). The Subway effect. QSR Magazine. Retrieved from https://www.qsrmagazine.com/executive-insights/subway-effect
Wong, V. (2014). With 3,000 more locations Subway widens lead over McDonald's. Bloomberg. Retrieved from http://www.bloomberg.com/news/articles/2014-05-19/with-3-000-more-locations-subway-widens-its-lead-over-mcdonalds
Yun, J. (2015). Is Subway really healthy fast food or is it killing your diet? Shape Fit. Retrieved from http://www.shapefit.com/diet/subway-healthy-fast-food.html
Create your account
Always verify citation format against your institution’s current style guide requirements.