Subway value chain analysis

Value chain analysis example

Some examples of Subway's marketing and sales activities are- sales force, advertising, promotional activities, pricing, channel selection, quoting and building relations with channel members. Only by understanding what factors drive the costs, managers can focus on improving them. Step 5. The research and development department of Subway is classified in this category. Some examples of operational activities are machining, packing, assembling and testing. A broken chain link illustrating poorly managed business' value chain. Analysis of in-bound logistics requires a company to focus on every aspect of transformation from raw material to finished product.

However, it requires the company to firstly map the activities and then associate costs to make necessary adjustments. If Subway aims to obtain cost advantage, it needs to identify each element within the value chain can be optimised to get the whole effect A Value Chain Analysis Example for Subway is that it can use the analysis as a tool to negotiate the best prices and maximise the in-bound and out-bound transportation processes.

Subway value chain analysis

The company can also achieve its cost minimisation objectives by analysing hiring and training costs with their relative return. Below you can find an industry's value chain and its relation to a firm level VC. Due to its linkage with multiple value chain activities, Subway should carefully consider its procurement activities to optimise the inbound, operational and outbound value chain. Different activities will have different cost drivers. Costs for labor-intensive activities will be driven by work hours, work speed, wage rate, etc. Here is a pictorial presentation of Porter Value Chain model: 3. The Value Chain Analysis can help Subway identify those activities and develop those areas to get a strong competitive edge over rivals. When a company is capable of producing goods at lower costs than the market price or to provide superior products, it earns profits. If Subway aims to obtain cost advantage, it needs to identify each element within the value chain can be optimised to get the whole effect A Value Chain Analysis Example for Subway is that it can use the analysis as a tool to negotiate the best prices and maximise the in-bound and out-bound transportation processes. The effective Value Chain Analysis requires Subway to realise that all activities or functions do not require same scrutiny level. Effective and wisely integrated marketing activities can develop the brand equity of Subway and help it stand out from the competition. It may include- intellectual capital, assets, skills or distribution network.

Value chain represents the internal activities a firm engages in when transforming inputs into outputs.

However, Subway must avoid making false commitments about product features that cannot be fulfilled by the production department.

Subway strategy analysis

Effective and wisely integrated marketing activities can develop the brand equity of Subway and help it stand out from the competition. Managers can use the following strategies to increase product differentiation and customer value: Add more product features; Focus on customer service and responsiveness; Increase customization; Offer complementary products. The effective Value Chain Analysis requires Subway to realise that all activities or functions do not require same scrutiny level. Effective value chain implementation does not only require familiarity but detailed expertise. Costs for labor-intensive activities will be driven by work hours, work speed, wage rate, etc. When the company knows its inefficient activities and cost drivers, it can plan on how to improve them. Step 3. Organisational policies. Competitive Advantages through Value Chain Analysis of Subway It is important for Subway to base its competitive advantage on activities in which it has access to the rare or scare resources.

Some outbound logistics activities are material handling, warehousing, scheduling, order processing, transporting and delivering to the destination. Analysis of primary value chain activities can improve the performance of Subway as explained below.

Restaurant value chain

Value chain represents all the internal activities a firm engages in to produce goods and services. However, Subway must not take it as a rigid, standalone framework by assigning the equal importance to all activities. The power of negative e-WOM due to poor support service cannot be undermined in the current technologically advanced era. Definition Value chain analysis VCA is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation. Different activities will have different cost drivers. Subway should pay specific importance to its outbound value chain activities when its offered products are perishable and require quick delivery to the end customer. Step 1. Activity based costing is used to calculate costs for each process. The modern customers consider post-sale services as important as marketing and promotional activities. Analysis of operational activities is important for improving productivity, maximising the efficiency and ensuring the competitive success of Subway. This is because the source of differentiation advantage comes from creating superior products, adding more features and satisfying varying customer needs, which results in higher cost structure. Owing to the consequences of an impressive development of technology and globalization that we are living in this age. Some examples of Subway's marketing and sales activities are- sales force, advertising, promotional activities, pricing, channel selection, quoting and building relations with channel members. Its goal is to recognize, which activities are the most valuable i.

After understanding the relative importance of identified value chain activities, Subway should highlight areas where value can be added, cost efficiency can be achieved, differentiation basis can be set, or processes can be optimised.

It illustrates the basic VCA for an automobile manufacturing company that competes on cost advantage. Effective infrastructure management can allow Subway to optimise the value of the whole value chain. The heavy dependence of Subway on employees' talent will increase the importance of this value chain support activity.

Because, when outbound activities are timely managed with optimal costs and product delivery processes put a minimum negative effect on the quality, it maximises the customer satisfaction and increases growth opportunities for the firm.

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Value Chain Analysis