14<\/p>\n
1<\/p>\n
Signature Assignment Recommendations for Increasing Value, Creativity and Innovation in Subway<\/p>\n
Student\u2019s Name<\/p>\n
Institutional Affiliation<\/p>\n
Course<\/p>\n
Professor\u2019s Name<\/p>\n
Date<\/p>\n
Signature Assignment Recommendations for Increasing Value, Creativity and Innovation in Subway<\/p>\n
Introduction<\/p>\n
Subway, as a franchise, faces stiff competition from other franchises and food chains in the same industry as this fast-food behemoth. The largest fast-service restaurant in the world, McDonald’s, brings in over $25 billion annually (Srivastava, 2022). In 2020, sales at quick service restaurants worldwide were close to $736.15 billion. A whopping 58% of customers say they plan to eat at a fast-service restaurant weekly. In emerging areas, fast-service restaurant franchise options are a tempting proposition. The business is difficult despite how appealing it may sound (Srivastava, 2022). Because of this, choosing a fast-service restaurant is always preferable to starting from scratch since collaboration between the franchisees and the franchiser creates synergies. In the face of growing labor costs and scarcities, Subway needs to leverage collaboration-based synergies, automation, and technology to gain an advantage over its competitors. <\/p>\n
The Franchising Industry: An Overview<\/p>\n
Most food and beverage industry franchises have been doing very well of late, including Subway and its competitors, such as McDonald’s and Burger King. Yum! Brands and Restaurant Brands International, two companies with a significant franchising component, produced significant growth runs in 2021. The owner of Pizza Hut, KFC, and Taco Bell opened a net 1,259 outlets in the fourth quarter, bringing their total for the year to 3,057 net new openings, the highest in his company’s history and, in the opinion of CEO David Gibbs, the most ever accomplished by a restaurant group (Srivastava, 2022). Burger King, Popeyes, Firehouse Subs, and the parent company of Tim Hortons all had a net growth of 4.5%, closing the year with 29,456 locations as opposed to 27,025 during the same time for the previous year (Srivastava, 2022). According to the International Franchise Association’s 2022 Franchising Economic Outlook, growth is expected to continue (Srivastava, 2022). In the quick-service sector, it was predicted that franchise establishments grew by 2.6 percent in 2017 and will continue to expand at a pace of 2.1 percent in 2022, reaching a total of 192,426 enterprises (Srivastava, 2022). The industry is prioritizing rapid growth and stiff competition between food chains in who can reach the most consumers the soonest.<\/p>\n
Franchise employees reported a 9.2 increase in compensation and salary as well as a 4.7 percent increase in hourly pay in 2021. Employers are still looking for suitable workers, and job postings are still at or near record levels (Srivastava, 2022). More jobs were created last year than in any other historical year, at 6.4 million (Srivastava, 2022). According to experts, this will equal the pre-COVID level of 3.5 percent in 2022 (Srivastava, 2022). Strong labour demand and a lack of available workers will drive pay hikes further higher, as has been the narrative for some time. The industry is thus doing quite well, except for the increasing prevalence of serious labor shortages in the US and Europe, and high labor costs, underscoring a need for finding low-cost and non-labour-intensive ways of creating value in the quick-service restaurant industry. <\/p>\n
Analysis<\/p>\n
Risk<\/p>\n
When ones shares control with franchisees, they are no longer in charge of every restaurant within their network. Moreover, with shared governance comes risk (Merckaert, 2022). For restaurants and virtual brands, the risks relate primarily to brand consistency. Creating a successful restaurant franchise hinges on delivering a consistent, high-quality experience for diners across locations, both on and off-premise (Merckaert, 2022). Finally, franchisees\u2019 success significantly depends on the support they get from the franchiser (Merckaert, 2022). While new restaurant owners will be in charge of their location, they rely on the franchisor\u2019s added tools and resources (Merckaert, 2022). Therefore, the franchiser\u2019s ability to support, guide and train them is strongly related to their (and hence its) success.<\/p>\n
The demand for risk evaluation in the quick service restaurant franchise\u00a0business has changed over the past several years as a result of expanding economies, shifting consumer tastes, an increase in the popularity of health and wellbeing, and new dietary patterns. The fast food business has seen exponential growth and is constantly faced with new dangers, difficulties, and trends (SpendEdge, 2022). Industry participants have been focusing on risk evaluation and risk management techniques to lessen the impact of numerous causes and industry changes as they have grown more conscious of the necessity for careful and data-driven strategy formulation. Suppose owners and experts establish knowledgeable strategies and properly carry them out. In that case, the fast-food sector may earn a large income despite being extremely competitive and readily influenced by outside forces (SpendEdge, 2022). Being cognizant of and planning for present and potential risks may distinguish industry leaders from businesses at the opposite end of the scale in this difficult sector. Companies need to detect, analyze, and anticipate possible risks and their effects on the market or the supply chain with the use of risk evaluation.<\/p>\n
Supply Chain and Procurement Risks<\/p>\n
Due to competition and difficulties with storing food past a certain point, potential problems with bulk commodities and an inability to purchase bulk stock could result in significant losses for a restaurant or food store. Problems with suppliers can arise for several reasons, such as difficulties with the contract, natural disasters, unforeseen events, renegotiations, or a shortage of materials (SpendEdge, 2022). To reduce the danger of substantial losses and take into account these potential difficulties, businesses must have standby sources. Supplier problems can also result in waste, penalties, poor customer satisfaction, and disgruntled investors.<\/p>\n
Health and Safety Risks<\/p>\n
Health and safety are a major issue facing the food and beverage industry. The food sector is constantly challenged to uphold food safety requirements, safeguard the product, lower customer risk, and prevent financial loss. Food that has been spoiled or infected must be thrown out and, if improperly sourced, stored, and distributed, can result in significant losses (SpendEdge, 2022). In the fast-food sector, buying and storing food in quantity is typical, and contamination or a lack of cleanliness in any cooking area can cause food to degrade or get contaminated further. Additionally, failing to adhere to health and safety regulations can result in costly fines and significant losses for restaurant operators. These health risks keep restaurateurs alert and worried. <\/p>\n
Equipment-related Risks<\/p>\n
The fast food sector needs various equipment for production, packing, shipping, storage, preparation, and serving; each step needs specialized equipment, manpower, and technology. Therefore, delays, breakdowns, and equipment failure can seriously disrupt the supply chain, affect subsequent steps, and make it impossible to satisfy customer demands (SpendEdge, 2022). Furthermore, significant time, money, and personnel investments are needed for administration, maintenance, and equipment acquisition. In order to guarantee that production or service can continue in the event of a problem or during servicing, restoration, or replacement, fast food firms must be aware of any equipment vulnerabilities, dangers, or failures.<\/p>\n
Transportation and Materials\u2019 Storage Risks<\/p>\n
Food storage and transportation can be challenging and time-consuming, especially for meat, fresh produce, and baked goods like bread. Because of this, most fast-food companies opt to employ frozen goods to reduce the danger of perishable fresh food (SpendEdge, 2022). To mitigate this risk, appropriate temperature-controlled warehouses and cold storage unit-capable transportation are required (SpendEdge, 2022). These facilities demand a considerable investment, and any problems or breakdowns might result in severe food waste and financial losses for the business. Customs clearance, travel dangers, contaminants, and risks being posed\u00a0to the public’s health are other transportation-related challenges (SpendEdge, 2022). These possible dangers may result in delays, financial loss, penalties for health and safety violations, and harm to consumer health.<\/p>\n
Competition<\/p>\n
Table 1: Quick service restaurant industry competition analysis (Duprey, 2020; QSR Magazine, 2022; Subway Restaurants, 2022; Starbucks Corporation, 2022; Campos, 2021)<\/p>\n
Subway<\/p>\n
Burger King<\/p>\n
McDonald\u2019s<\/p>\n
Starbucks<\/p>\n
Recent innovation or creativity<\/p>\n
Subway Grab & Go\u00ae platform<\/p>\n
Whopper Melt<\/p>\n
Drive-thru technology investments<\/p>\n
Dynamic menu boards from Dynamic Yield\u2019s acquisition<\/p>\n
Adopting new, industry-leading, and more effective coffee brewing tools, like the new Starbucks Cold Brewer and the Mastrena II espresso machines.<\/p>\n
Profitability of recent innovation or creativity<\/p>\n
25% of the company\u2019s entire North American footprint<\/p>\n
No impact on profitability or brand image<\/p>\n
300 million more sales in 2022<\/p>\n
Virtually no impact on sales or profitability and a greater negative impact on operating costs<\/p>\n
Profitability of company – or growth within the market sector over the last five years.<\/p>\n
Moderately profitable on average, except during the pandemic<\/p>\n
Moderately profitable in general over the past five years<\/p>\n
Highly profitable over the last five years, even during the pandemic, because of the drive-thru restaurants it has in its franchisees <\/p>\n
Highly profitable over the last five years except during the pandemic<\/p>\n
Collaboration<\/p>\n
Collaboration between a company and its franchisees allows a company to leverage the experience and brand image built by others and allows small business owners to make a healthy profit in their first few years of business because of this. One of the benefits of franchising is that they have previously discovered what works or not. They have successfully navigated the ups and downs of starting a new business and have created a method for prosperity as a consequence (Francis, 2022). One gains as a franchisee from the period of adjustment that existing franchisees have previously undergone. People always return to eateries they are familiar with and confident in. Regardless of whether they have ever been to a specific place or not, they recognize what to anticipate when visiting a franchise. Before they ever serve their first meal, a franchisee who opens a restaurant inside a well-established franchise system receives rapid notoriety. Customers are prepared for a franchisee’s restaurant when they launch one. Collaboration between a firm and its franchisees enables a business to capitalize on the expertise and brand reputation developed by others (Francis, 2022). Franchising, as a result, enables small business owners to turn a solid profit in their first few years of operation.<\/p>\n
Collaborating with a franchiser will be very helpful for most small business owners because the franchiser will help them a lot in fundamental areas of business, such as starting up the business, growing it through leveraging procurement and supply chain relationships, and training and support. The procedures of creating a strategy, obtaining funding, and putting everything together are essential to the launch of any firm. With a franchisee, the launch process has been refined through time, and one may benefit from having a team of professionals behind them at every stage. One may take advantage of the franchisor’s long-standing connections to suppliers by purchasing a franchise. Franchises frequently develop partnerships to supply the company with the goods and equipment it needs to run the restaurant since they rely on a degree of uniformity throughout several locations, which ends up saving both money and hassle. The value of an established support and guidance network is one of the main benefits of franchising in the hotel industry. Franchises are profitable because of their tried-and-true operating model, which can be copied and used in other sites to provide a sense of continuity. With training that covers everything from leadership tactics to everyday activities to customer relations and more, a franchise will set the stage for people to manage their restaurants\u00a0as smoothly as they can from the get-go.<\/p>\n
Action Plan<\/p>\n
Blueprint<\/p>\n
For Subway, the best plan for expanding the business and staying competitive is to pursue market penetration and product development strategies by targeting existing markets using a creative marketing strategy and making them more profitable for the brand. The percentage of an item or service’s entire anticipated market that is sold to consumers is known as market penetration. It is a measurement that may be used to estimate the size of the prospective market or to design a plan for boosting the sales volume of a particular item or service. To sell its product range in a fresh and innovative way that its customers have never seen before, Subway can develop and roll out a marketing campaign or initiative. The campaign’s success should then be evaluated so that it may be used in the future. An emphasis can be laid on making the franchisees more profitable and help them grow by boosting their marketing endeavors and showing them how to reach new customer segments through product creation and innovative marketing. Subway has much to gain from reaching existing markets and making its position more dominant since the franchise is present in almost every region in the world and has few regions left to which it can expand. <\/p>\n
Automation and Technology Adoption<\/p>\n
Subway and its constituent franchisees should also rely more and more on automation and leveraging technology such as artificial intelligence and voice assistance. Due to the evolving business model, restaurant layouts are altering for operational efficiency (Outside Insights, 2022). According to customer preferences, more restaurants are opening “ghost kitchens”\u2014kitchens without a storefront designed to sell takeaway food, pick-up, or via online delivery are developing smaller physical footprints by designating less area for indoor seating and more outdoor space (weather permitting) (Business Insights, 2022). Nowadays, full-service restaurants such as McDonald\u2019s tend to provide drive-throughs and set up specific locations for online purchases and picking-up. More advanced technology and digital solutions, such as touchless payment systems, contactless in-store ordering options, AI systems for drive-thru orders, and other innovations, could help restaurant businesses increase efficiency and control costs (Business Insights, 2022; Outside Insights, 2022). Looking ahead, automation needs to make its way into Subway restaurant operations, with robot and drone delivery services becoming more common and robots conducting routine kitchen tasks.<\/p>\n
Technology Grants by Subway: A Creative Solution to Increase Collaboration <\/p>\n
For the existing franchisees seeking to implement an increased focus on technology, especially the Grab and Go platform, Subway should offer them low-cost financing and grants to accomplish the same (Ruggless, 2022). This will incentivize the rollout of the Grab and Go platform and prevent the loss of large numbers of customers to McDonald’s drive-thrus. The Grab and Go platform is currently only available in highly developed regions such as the US (Ruggless, 2022). Implementing the required changes is an endeavor that requires significant support from Subway\u2019s corporate division. This is because technology costs money to purchase, and not all of the franchisees are ready with the cash up front to invest in Subway\u2019s new machines. Thus, the franchisees may need financial help, creating an excellent opportunity for Subway to leverage its collaboration with its franchisees. <\/p>\n
Figure 1: The Grab and Go vending machine <\/p>\n
Source: (Lawler, 2022).<\/p>\n
As demonstrated in Figure 1, the automated vending machines are large and expensive, putting their cost out of the reach of many of Subway\u2019s franchisees. This is because most of them are just hanging on, barely making a modicum of profit every day. As such, Subway is bound to assist its franchisees in popularizing its Grab and Go platform by offering them funds to do the required installation and acquire the necessary gadgets. New franchisees should be given further assistance to either secure funding from third-party technology providers or grants\/low-interest loans to purchase equipment. Therefore, the franchisees will inadvertently collaborate with Subway to popularise its nascent Grab and Go platform and improve the technology adoption of Subway’s target customer base. Through franchise collaboration in providing technology for the Grab and Go platform in its existing and future franchisees, Subway will be facilitating its revenue growth and gaining more of a foothold in the burgeoning automated quick service restaurant industry alongside McDonald’s. <\/p>\n
Encouraging Franchisees to Collaborate in Creativity with Subway and Profit<\/p>\n
Subway should ensure that employees are creative \u2013 they should be encouraged to come up with new ideas to utilize technology to improve the experience at Subway and create new products and services for the customers. While training the franchisees at the start of new franchises, Subway should urge its franchisees to let their staff members know that their employers appreciate their opinions and promote an open and cordial work atmosphere. Although it seems easy, staff members sometimes feel that it is preferable to stay abreast of their job responsibilities, blend in, and avoid being noisy or outspoken since they have become accustomed to feeling invisible (Kremer et al., 2019). A brief training\u00a0session for individual franchise\u00a0leaders is acceptable for established franchisees. Employers should go above and above to communicate to their staff that their uniqueness and their ideas are valued (Kremer et al., 2019). They should express their view of them as distinct, fascinating individuals rather than nameless pawns. As a result, employees will reward Subway and their bosses with their opinions and suggestions. Such suggestions will most likely leverage the collaboration between Subway and its franchisees and simultaneously lead to improvements in Subway\u2019s services and overall international product line. <\/p>\n
The Kaizen Principle in Quick Service Restaurants: A Trial at Subway<\/p>\n
Subway can foster the immensely useful Kaizen principle in their franchisees’ businesses by incentivizing its application in their restaurants. A continuous improvement strategy known as kaizen is founded on the notion that tiny, continual beneficial changes may have a big impact (Abdulmouti, 2018). It often relies on commitment and collaboration in contrast to methods that rely on drastic or top-down adjustments to bring about transformation (Abdulmouti, 2018). Lean or just-in-time\u00a0production, for instance,\u00a0depends\u00a0on kaizen. It was created for the industrial sector to boost productivity, inspire worker accountability and purpose, reduce errors, and decrease waste (Abdulmouti, 2018). It has been embraced in many other areas, including healthcare, since it is a wide notion that may be interpreted in many different ways. <\/p>\n
How this philosophy can be implemented at Subway includes emphasizing continuous improvement on a personal level and in every aspect of the business. Kaizen should then be taught to the franchisees, teaching them to make use of a variety of strategies and tools, including value stream mapping, which records, examines, and enhances the material or data flows necessary to produce a good or service, and total quality management, a framework for management that mobilizes employees at all levels to concentrate on quality enhancements. Regardless of methodology, the effective use of kaizen in an organizational environment depends on securing backing for the strategy from the CEO downward (Abdulmouti, 2018). Subway should reward employees who contribute to applying the Kaizen principles using bonuses and promotions, ensuring their franchisees do the same. <\/p>\n
Conclusion<\/p>\n
In order to outperform its rivals, Subway must use collaboration-based synergies, automation, and technology utilization in the face of rising labor prices and scarcity. Recently, most food and beverage franchises have prospered, including Subway and its rivals McDonald’s and Burger King. As a result, Subway has to collaborate with its franchisees to develop and expand to penetrate its current market further. For Subway, the ideal approach for growing the company and maintaining its competitiveness is to pursue market penetration and product development plans by focusing on existing markets and increasing the profitability of the brand. <\/p>\n
To grow its market share and income, Subway might take certain actions. First, Subway and the franchisees that make up its network should rely to a greater extent on automation and the use of cutting-edge tools like speech recognition and artificial intelligence. Subway should provide low-cost funding and subsidies to current franchisees who want to incorporate a greater focus on technology, notably the Grab & Go platform. Additionally, to guarantee that staff members are innovative, Subway should encourage them to develop fresh concepts for using technology to enhance the customer experience and develop new goods and services. By encouraging the adoption of the very beneficial Kaizen approach in their franchisees’ restaurants, Subway can also help its smaller business partners grow. By expediting its franchisees’ growth and development, Subway can penetrate more and more of its market and increase its revenues and efficiency. <\/p>\n
References<\/p>\n
Abdulmouti, H. (2018). Benefits of kaizen to business excellence: Evidence from a case study. Industrial Engineering &Amp; Management, 07(02). https:\/\/doi.org\/10.4172\/2169-0316.1000251<\/p>\n
Baker, K. (2022, February 25). How to understand market penetration and create a strategy with STP marketing. https:\/\/blog.hubspot.com\/marketing\/market-penetration<\/p>\n
Business Insights. (2022, July 5). Quick-service restaurant challenges: Automation trends | Citywide Banks, a division of HTLF Bank. CityWideBanks. https:\/\/www.citywidebanks.com\/business-insights\/unpacking-quick-service-restaurant-challenges-automation-trends-labor-shortages<\/p>\n
Campos, D. (2021, February 11). Committing to the core: How McDonald\u2019s innovated to survive (and thrive) during the COVID-19 Pandemic. Digital Innovation and Transformation. https:\/\/d3.harvard.edu\/platform-digit\/submission\/committing-to-the-core-how-mcdonalds-innovated-to-survive-and-thrive-during-the-covid-19-pandemic\/<\/p>\n
Duprey, R. (2020, July 31). McDonald’s drive-thru came through in a big way in Q2. The Motley Fool. https:\/\/www.fool.com\/investing\/2020\/07\/31\/mcdonalds-drive-thru-came-through-in-a-big-way-in.aspx<\/p>\n
Francis, J. (2022, November 22). 10 reasons why i am thankful for franchising. FranchiseWire. https:\/\/www.franchisewire.com\/10-reasons-why-i-am-thankful-for-franchising\/<\/p>\n
Kremer, H., Villamor, I., & Aguinis, H. (2019). Innovation leadership: Best-practice recommendations for promoting employee creativity, voice, and knowledge sharing. Business Horizons, 62(1), 65\u201374. https:\/\/doi.org\/10.1016\/j.bushor.2018.08.010<\/p>\n
Lawler, Opheli Garcia. \u201cA subway vending machine full of grab and go sandwiches could be in your town soon.\u201d Thrillist, 15 Nov. 2022, www.thrillist.com\/news\/nation\/subway-smart-fridges-customer-experience.<\/p>\n
Merckaert, G. (2022, June 29). Pitfalls of starting a restaurant franchise \u2014 Is Your F&B concept fit for expansion? Are you ready to deal with franchisees? Apicbase. https:\/\/get.apicbase.com\/pitfalls-restaurant-franchise\/<\/p>\n
Outside Insights. (2022, November 17). 6 Automation trends impacting restaurant operations. QSR Magazine. https:\/\/www.qsrmagazine.com\/outside-insights\/6-automation-trends-impacting-restaurant-operations<\/p>\n
QSR Magazine. (2022). Burger King sheds light on \u201creclaim the flame\u201d Comeback plan. Retrieved December 3, 2022, from https:\/\/www.qsrmagazine.com\/fast-food\/burger-king-sheds-light-reclaim-flame-comeback-plan<\/p>\n
Ruggless, R. (2022, November 15). Subway taps into unattended Grab & Go vending fridges. Nation\u2019s Restaurant News. https:\/\/www.nrn.com\/quick-service\/subway-taps-unattended-grab-go-vending-fridges<\/p>\n
SpendEdge. (2022, November 8). Risk assessment for client in the fast food industry. https:\/\/www.spendedge.com\/casestudy\/extensive-risk-assessment-plan-fast-food-industry-spendedge<\/p>\n
Srivastava, A. (2022, September 16). Restaurant franchising industry 2022: Everything you need to know. https:\/\/www.ny-engineers.com\/blog\/restaurant-franchising-industry-2022-everything-you-need-to-know<\/p>\n
Starbucks Corporation. (2022, March 16). Starbucks convenes 2,000 retail leaders from across US and Canada to enable leadership excellence as company reinvents for the future. Starbucks Stories. https:\/\/stories.starbucks.com\/press\/2022\/starbucks-showcases-innovation-for-growth-and-a-more-connected-and-sustainable-future-at-2022-annual-meeting\/<\/p>\n
Subway Restaurants. (2022, November 14). Subway\u00ae Expands its non-traditional presence through flexible and innovative concepts. Retrieved December 3, 2022, from https:\/\/www.prnewswire.com\/news-releases\/subway-expands-its-non-traditional-presence-through-flexible-and-innovative-concepts-301676916.html<\/p>\n
Tmad, T. (2022, June 9). 7 Advantages of franchising in the restaurant industry. Teriyaki Madness Franchise. https:\/\/franchise.teriyakimadness.com\/advantages-of-franchising\/<\/p>\n","protected":false},"excerpt":{"rendered":"
14 1 Signature Assignment Recommendations for Increasing Value, Creativity and Innovation in Subway Student\u2019s Name Institutional Affiliation Course Professor\u2019s Name Date Signature Assignment Recommendations for Increasing Value, Creativity and Innovation in Subway Introduction Subway, as a franchise, faces stiff competition from other franchises and food chains in the same industry as this fast-food behemoth. The […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10],"class_list":["post-106747","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/106747","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=106747"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/106747\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=106747"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=106747"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=106747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}