Subway has customers across more than a hundred countries. It's likely one of the restaurants to come into your mind when you are planning to have something low-calories, fast and healthy for the meal. However, that does not mean Subway has not encountered any challenges.
Pestle Analysis of Subway
As international chains like Subway, there are political factors that need to be considered. Health and safety guidelines provided by local government and these guidelines surely domain in making the policies and strategies of each Subways different. Abiding by restrictions of the health and safety regulations is a multinational company's top priority. Subway must comply with the rules of the location wherever it operates. From packing, food hygiene, and nutritive values to distribution, workers in Subway hold the responsibility of their food products. The other political factor is those semi-governmental organizations operating in those particular areas. These health-related organizations have a certain level impact on food providers like Subway. Health and safety guidelines vary based on the country's specific policies. For example, the regulations in the United States differ overseas compared to Muslim countries. Most restaurants obey Halaal food restriction. If the food is not Halaal, it will not be accepted by Muslins. For instance, food hygiene rules are especially strict in Europe countries and the USA. Subway needs to make sure to follow the rules in each area. Otherwise, they might lose customers in those countries.
Economic factors influence food industry to certain extent. During the recession, people are counting every penny and spending on necessities. Restaurants started including cheaper option in their menu to retain as much as more customers. Subway was not immune from it, lower deposable income that people have, the more risks Subway has to survive. Minimum wage standards is accounted as both political and economic factors. The baseline of wage is vary depending on government policy, cost of living and human right awareness. In the locations where wage rates are high, the labor costs are high. The labor cost reflects on store profit. Subway needs to find a balance between maintaining high staff quality and pursuing high profit.
Health and lifestyle trend also affect the whole fast food industry. Health awareness has spread over the entire food industry. Nowadays, customers think before they eat, customers' attitude has pressed the food industry to introduce low-calorie options. The social perception has been a pressure to the food industry. Media plays a role that creating the perception. Media are used to advocate a healthy lifestyle and fitness. The fast-food industry has responsibility for the increasing childhood obesity. A few years ago, the lead of the fast food industry, McDonald, was criticized heavily for aiming young children for high-calories and unhealthy fried food. Under the blame from the public, McDonald changed their kid meal with healthier food combination with fruit and juice. Moreover, McDonald began showing the nutritional facts on the meal label. Jared Fogle, Subway's spokesman attributed his significant weight loss to eating Subway sandwiches. Hence, Subway invited Jared for advertising campaigns for lasting 15 years from 2000. Nonetheless, Jared has convicted a child molester in 2015, this scandal suddenly brought Subway a challenge to set a line in the sand between themselves and Jared. No single company wants their brand being associated with a child molester. Luckily, Subway did not suffer a lot with the association with Jared. From these can be seen that social and cultural factors weight heavily in brand management.
In the digital generation, technological factors play a crucial role in the business of global food chains like Subway. Technology helps Subway becoming easy to place an order online wherever people are at home or in the office, increasing the number of orders Subway received in a day. Advanced technology affects the way companies marketing and advertising their brand. Subway is active in social media. Interacting with customers and broadcasting catchy slogan on social media makes the presence of the brand stronger and ubiquitous. Subway has SubCard to encourage customers to do repeat purchase. Without technology, it is not possible for Subway to offer SubCard and maintain loyal customers. SubCard brings economic benefits to Subway, however, data protection could be another issue for Subway to take care of. While holding huge customers' personal details, it is important for Subway to manage and prevent being hacking. The failure of guarding customer's privacy could create damage to business reputation and customer loyalty. Subway engage with their customer deeper through technology, however, social media is not always good. Customers are now easier to complain publicly online, this amount freedom for customers damages Subway brand image. Normally unsatisfied customers are stereotypically considered to be having the most possibility to share bad reviews. The anonymity on the internet allows people to complain without any concerns. Social media helps Subway to collect both good reviews and bad reviews, Subway must take advantage of this trend to determine better instructions and take extra cares to manage it.
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