PEST Analysis

http://www.bbc.co.uk/news/uk-england-birmingham-24162894
http://www.subway.com/subwayroot/exploreourworld.aspx

PEST Factor: Political threat

Dudley, a borough of England, has set a new rule, "exclusion zones". "Exclusion zones" are areas within 400m of schools, which fast food outlets cannot be built in anymore. The purpose of this new rule is to prevent the overconsumption of fast food by children, hopefully ending up reducing the child obesity rate in Dudley.

This new rule is definitely a threat to Subway. The reduction of new built fast food outlets would mean less opportunities for Subway to open another franchise store. As new franchise stores usually bring more profit to the company, this law is blocking several income opportunities, in Subway's perspective. Also, the United Kingdom is one of the biggest markets for Subway, as it has 1590 of the 40,921 Subway restaurants in the world. Thus, the threat has a larger effect on Subway. As this threat is coming from a new rule created by a governmental institute, it is a political PEST factor.

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http://www.bbc.com/news/uk-20843000
http://www.queerty.com/subway-restaurant-in-france-says-adieu-to-gay-couples-on-valentines-day-20130215/

PEST Factor - Socio-cultural threat

The article discusses the continuous debate on gay marriage, referencing a survey carried our for the Independent. The survey suggests that a lot of people are initiating the government to take a more supportive move towards gay marriage. This also suggests that the general public is positive towards homosexuality. This would effect the business in terms of their stance in social issues; in this case, in homosexuality. As the second article describes, Subway has a past incident of a shop owner in France discriminating and accept homosexual couples as subject to a promotional event of giving a discount to couples. Therefore, Subway seems to the public like having pretty negative position in the gay marriage discussion. This might be a threat for Subway, as some customers that have strong opinions on the subject might refuse to purchase their products.

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http://www.bbc.com/news/uk-19086415

PEST Factor - Socio-cultural threat

This article discusses the impact of the Olympic games on the local businesses in London. Many tourists and usual customers are all focused on the games too much, that they do not go to other places that are not related to the Olympics until the games are over. This would be a threat towards Subway as Subway has many shops in London as well, thus Subway would suffer from loss of profit along with other businesses.

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http://www.bbc.co.uk/news/business-25111208

PEST Factor: Socio-cultural Opportunity
This article talks about how French people's lunches are moving towards fast food. Contrary to years before, when people used their lunch times to go home and have lunch, they now get convenient and fast food instead. This way, they can save more time to work, and also get food in a cheaper price. Armand Chaigne, from Eurogroup Consulting, said that "Today the fast food industry is two and a half times bigger than it was 20 years ago."
This is definitely an opportunity for Subway. The PEST factor being the consumer preferences for fast and convenient food, it well fits Subway sandwiches' attributes. As Subway has 491 franchise stores in France, such increase in consumer interest will eventually lead to increase of profit.

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http://ecdc.europa.eu/en/press/news/_layouts/forms/News_DispForm.aspx?List=8db7286c-fe2d-476c-9133-18ff4cb1b568&ID=930&Web=86661a14-fb61-43e0-9663-0d514841605d

PEST Factor: Political/Socio-cultural threat

The occurrence of a new bird flu, avian influenza A(H7N9) is noted by the European Centre for Disease Prevention and Control. The centre advises the EU citizens living in China to avoid live-bird markets. Although Subway is not directly related to the live-bird markets, now that an official governmental organization has acknowledged the threat of the bird flu disease, customers would be driven to avoid chicken meat both cooked and uncooked. As one of Subway's best selling sandwich menus is based off chicken, the sales of the menu will have to become lower. 

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http://www.businessweek.com/videos/2014-03-19/fast-food-getting-faster-with-mobile-apps

PEST Factor: Technological opportunity

Burger King is introducing an application that will allow customers to order menus ahead of time, and pick up the food later. This is a very powerful tool for the company to be using, at it increases customer convenience and reduces the time that it takes to bring a burger when the customer orders in advance. The news provides a survey result that people responded that they would actually start going to Burger King just for the convenience of the application. This might be a threat to Subway for now as some customers might be taken away by Burger King. However, as Burger King's application is not really in a very advanced stage, Subway can try to produce a more efficient and appealing application later on in order to attract more new and old customers. 

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http://www.businessweek.com/videos/2014-03-21/fast-food-workers-are-facing-wage-deflation

PEST Factor: Economical Opportunity

This video discusses the general decrease of the employment fee in the US. This might be considered a threat to the general public and economy of the country, but in the perspective of the company, this is an opportunity to cut on the money being used on employment fees. This would allow the company to invest the money saved in this process into developming more menus or services to increase profit.                                                                                                                                                                                                                                                                                                                                                                                                                          

Subway's Objectives

Subway's Objectives

1. Importance of objectives

The objective of Subway, to bring customers into the stores and keep them coming back, is quite straight-forward. However, by setting this objective, many aspects of the organizations are affected. In order to bring customers into the stores, the shop should be clean and well advertised. To have them coming back, the store's food and service should be of good quality. 

Since Subway is a franchise company, its franchisees will work hard to improve their service and food so they can achieve the objective. Also, Subway as a whole organization will work hard to improve its menus or advertise their sandwiches in order to achieve the objective. 

Since the objective directly relates to the profit of the organization, it is very important.

2. Role of the Mission Statement (Delight every customer so they want to tell their friends - with great value through fresh, delicious, made-to-order sandwiches, and an exceptional experience.)

Subway's mission statement is very simple and straight-forward as well. However, it contains all the necessary elements that Subway desires to acquire. By looking at the mission statement, one can know what to provide the customers with. "Delighting" every customer would directly come from good service, and when the service is very good, "[customers] will want to tell their friends". The "fresh, delicious, made-to-order" part explains how the sandwiches should be. This provides Subway's franchisees of a rough guideline of making the sandwiches. The part about an "exceptional experience" is interesting, because it does not state what kind of an experience it is talking about. This could be interpreted differently for different people. Some can think the experience is the taste, and some might think it is the service. This is a great strategy, because each franchisees will have a slightly different interpretation of the mission statement, eventually having them provide slightly different services. 

The mission statement also is deeply related to the objective, as achieving the mission statement will mean achieving the objective.  

3. Relationship between aims, strategic objectives and operational objectives

Aims are the finalized and abstract goals of a company. Strategic objectives are shorter term goals that are more specific than aims, but still longer term and abstract than operational objectives. 

In Subway's case, their aim is to be the number 1 Quick Service Restaurant franchise in the world. Their strategic objectives are to build good company reputations and have a wider customer range, while their operational objectives are to make their food healthier, or to construct a wider range of menu.

Operational objectives support strategic objectives, while strategic objectives support aims. These goals should not go against each other, and should benefit each other.

Business Objectives

The difference between aims, strategies, and tactics

Aims are the general goals that a company seeks to achieve in a long span of time, while strategies and tactics are the methods used to achieve that aim. The difference between strategies and tactics is that strategies are more long term and broad. Tactics are more likely to be day-to-day and detailed.

The difference between a mission statement and a vision statement

A mission statement and vision statement are very similar in that they both express the company's purpose and values. However, the main difference is that a vision statement states where the company hopes to be positioned in the future, while a mission statement expresses where is tries to be now. Also, because of this difference, a mission statement usually should be able to be measured quantitatively, while a vision statement is based on a qualitative criterion.

NPOs supported

In order to make the community more healthy and active, Subway supports various non-profit organizations through corporate donations and sponsorships. Subway constantly supports certain NPOs, and also donated in 2011 to 10 organizations chosen by the employees of Subway.

List of supported NPOs

• Doctors without borders
• Feed the Children
• Susan G. Komen for the Cure
• UNICEF
• Save the Children
• The Jared Foundation
• Make-A-Wish Foundation
• American Red Cross
• American Cancer Society
• American Heart Association
• Jump Rope for Heart
• Hoops for Heart
• National Institutes of Health
• We Can!™ 
• Little League Baseball
• Jared Foundation
• Frederick A. DeLuca Foundation

The NPOs supported by Subway are mostly centered around health and activity. I believe this is because it relates to Subway's aim for fast but healthy sandwiches.

Influence of Public Sector

Subway's business deals with a huge number of competitors, since the food industry is full of them. However, as most public sector businesses tend to provide their consumers with essential needs, they do not act as competitors of Subway. Also, it does not have obvious relationships with any public sector companies. However, the governments do affect the business through various laws and restrictions. For example, Los Angeles has set regulations in order to limit the number of fast-food restaurants in its state. Also, many customers who believed in the catch phrase 'Eat Fresh' of Subway have been disappointed to find out that some of the ingredients of the sandwiches are banned in several countries in Europe. As these examples prove, Subway is constantly affected by government laws, but not directly.

Factors of Production

Introduction

1. The purpose and goal of this blog is to successfully investigate various business components of the company Subway for the two year course of the IB Business course, achieving a more thorough understanding of businesses in real life.

2. Subway is the world's largest submarine sandwich chain with more than 40,000 chains in 102 countries. Subway provides its customers with nutritious and quick sandwiches of varying combinations of ingredients.

3. I selected to investigate Subway because it is a familiar company to me since I usually enjoy Subway sandwiches. Also, Subway has a comparably simple business, being food service, thus making it easier to understand the company.