Organizational Analysis
Subway is an American restaurant that has a primary objective of selling submarines sandwiches and salads. This organization has adopted a strategy of franchising in order to have many outlets in the world with similar products. The fast food organization has had its fair share of success and challenges in the market (Harwell, 2015). Financial challenges and competition from companies such as MC Donald and other organizations that are in the fast food genre have threatened the success of subway. As one of the fastest growing franchises around the world Subway has commissioned its operation in more than one hundred and eleven countries. This has made it be the largest single brand fast food restaurant and operator in the world.
The strength of the financial position of the organization has been attributed by its many outlets. These outlets are considered as assets of the organization making the financial position strong. With the many outlets in many countries, the level of revenue has grown up (Harwell, 2015). The revenue has increased not only in the American market but also in other countries. This is because it has been able to strategize its self in different countries. For example, in India subways, restaurants do not serve pork or beef in their sandwiches. It has respected its citizen’s culture serving them only vegetable sandwiches (Harwell, 2015). By honoring the culture of different communities across the world has led to many outlets being opened in the countries increasing the margin of sales resulting to higher returns. As it has its operation in different countries it has been able to separate its market ensuring that it has gained the most in each country despite currency differences strengthening its financial position (Randall & Randall, 2011).
As the organization grows in size there have been challenges affecting its financial position. Management of some outlets has not performed to the expected levels resulting to financial losses. This has threatened the financial position of the organization (Randall & Randall, 2011). Due to currency differences, the exchange rates have been fluctuating from time to time. During the financial year of the organization, the exchange rates may be unfavorable due to the devaluation of a currency affecting the stability of its financial position.
The financial condition of the organization has been sound for some time as it has had a purchasing power of its outlet. An initial investment in a subway depends on of factors such as the outlet size, location among others. The fees and the royalties paid to the subway have increased its market share. The advertising strategy of the organization takes a huge amount of cash. Through advertising, people have been aware of its existence and have led to its popularity (Randall & Randall, 2011). By having a management that is unison in all outlets in various countries will be helpful to improve the financial condition of the organization. This will also make sure that the management team performs to the required standards. Adopting same and consistent financial measures in the organization will leave create no room for cash embezzlement. This can also be achieved through internal and external audits of all outlets (Randall & Randall, 2011). In order to improve the organization success has to drop the strategy of opening more stores that cannibalize each other 9 Harwell, 2015). Subway has to appeal to its consumers by evolving into something different by having better concepts and various better products to ensure that their customers are not lost to their competitors.
Reference
Harwell D (2015). The rise and fall of subway: How the world’s biggest food chain lost its “fresh” appeal. Retrieved from http://business.financialpost.com/news/retail- marketing/the-rise-and-fall-of-subway-how-the-worlds-biggest-food-chain-lost-its-fresh- appeal
Randall, D., & Randall, S. (2011). So you want to own a Subway franchise?: A decade in the restaurant business / c by Dylan Randall and Shayne Randall. Durham, CT: Strategic Book Group.
