Operations Strategy: Comparison of Subway and Quiznos

Posted: October 17th, 2013

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Operations Strategy: Comparison of Subway and Quiznos

Introduction

Operational strategy is one of the most crucial elements for a company strategy. It can be described as the process where all parts of the business operations are integrated together for the long term overall performance of the organization. If companies decide to focus on their operational strategies, they can gain a competitive advantage over their competitors. Therefore, organizations need to establish a good operational strategy to increase the overall performance of their business operations. To analyze this, the operational strategies of two companies, Subway and Quiznos, will be compared in depth.

Method used in collecting data

In order to get the quality information, interviews from customers, employees and management from the two companies were obtained as the first method. In this case, the use of interviews and questionnaires was used. These people provided raw data required for the report. Additionally, they are the people who come in close contact with the strategies. The second method to be used to obtain information was the web search. Sources from the web provide update data that is helpful in writing the report. However, not all sources from the web are substantial. The use of journals articles from the web and other educative material was helpful. Lastly, the use of textbooks from the library was helpful with information necessary.

Discussion

The main operations of the two companies are in the fast food industries. This industry has a lot of competition among the different companies on who will attract a wide base of customers (O’Brien and Jan 2004). Therefore, the company with the best operational strategies always has a competitive advantage over the other companies (Bourne, John, and Norman 2003). In this case, an analysis of Subway Company and Quiznos Company operational strategies is done for the purposes of establishing the importance of operational strategy.

Based on the operational strategy matrix, there are four main areas for an organization to analyze and create a good operational strategy (Russell & Taylor 44). The first area is the performance objectives. This is where the company concentrates on performance thus bring quality to their customers. For instance are their services of high quality. The second area is decision areas. This is where the company utilizes all the resources to establish whether they are capable of performing. For instance, do they have competent staff members? The third area is resources usage. This is where the management of the company evaluates whether the resources of the company are utilized effectively. Marketing competitiveness is the last area. In this situation, the managers crate a strategy where the sales are moving at a faster rate (Brans, Jean-Pierre, Tawfik, Marc and Pascale 302).

Analysis

i) Subway Company Operational Strategies

According to the operational strategy mix, the first operational strategy of Subway Company is performance objectives. Subway Company has made it their priority to satisfy their customer fully. According to their strategies, they prepare their food based on the customer specification without consideration of money as compared to other companies like Quiznos Company. Additionally, they have a wide variety of healthy foods for customers to choose from. Moreover, they have strategically located their kitchen where customers can see what is being prepared for them (Mccarty 2007). In this case, Subway Company is attracting a large number of customers thus becoming successful in the industry.

The second operational strategy is the decision areas. In this case, Subway Company has decided to make decisions on how to utilize all their resources for customer perfection. For instance, they have made decisions to create eating areas for their customers inspite of it being a fast food company. Secondly, they have a decision to saturate there shops in one place ensuring that the only thing the customers can see is the industry. Additionally, they decide to arrange their resources inside the shops in such a way the customer can see their meals being prepared (Novel Guide 2011). For these operational strategies, it has led Subway Company having excellent business operations.

The third operational strategy is the resource usage. In this case, Subway Company has strategically used the resources to attract there customers. For instance, they have utilized the space of the fast food restaurant strategically. Space is a resource, which if not strategically used, can cause the business to close down. However, if strategically used, it can cause excellent performance in business. Employees are also company resources. In this case, Subway Company is training their employees on customer satisfaction. This has led to excellent business operations.

The last operation strategy is the marketing competitiveness. In this situation, an organization is supposed to attract as many customers as possible. Therefore, Subway Company had to employ the best marketing strategies. The slogan for the company is eat fresh. In this case, the customers are attracted to the fresh food. When the customer enters into the restaurant he or she can see the fresh vegetables being prepared to make the fast food. In this case, the customers trust the Subway Company in that their food is always fresh. As part of their marketing strategies, the Subway Company has decided to go green. Currently, the doctors are advising people to take healthy foods because fast foods are making them unhealthy. Being the only fast food company that is selling healthy foods, the company is using this as a marketing strategy to attract potential customers. This has resulted in attracting many customers to the company leading to excellences.

ii) Quiznos Company Operation Strategies

The company deals in selling toasted foods, but it has the option of not toasting which is only for customers. The first operational strategy of Quiznos Company is providing high quality food products. When the quality of their food is compared to their competitors, it is high. The problem with strategy is that they take too long when preparing their foods for the customers thus keeping a hungry customer waiting. Secondly, to maintain this quality they have to charge higher prices for foods. This has led them to losing their customers to their competitors (Linetsky, 2007).

The second operational strategy is decisional areas. In this case, the management of the company has decided not to involve intermediaries in the franchise. This has led the company to maintain the high quality of their foods. On the other hand, it results them to close many of their franchises. Additionally, the management of the company does not support the owners of the franchises making it difficult for them to stay open in the market (Novel Guide 2011). As a result, this has become a poor strategy for their company, allowing their competitors to have the competitive advantage over them.

The third operational strategy is the resource usage. In this situation, the management has decided to employ employees who will produce high quality foods. Additionally, they have focussed all their resource including money in maintaining high quality foods for their customers. However, this has become too expensive for their customers. As a result, their customers are running away to their competitors. Moreover, they are spending more than they are getting in revenues. Henceforth, they are making loses. This strategy is poor leading to the loss of customers and closure of their franchises.

The last operational strategy is marketing competitiveness. Quiznos Company has the best advertisements as compared to their competitors. They are using the super bowl as their main avenue to advertise their products. This has improved the brand name thus attracting many customers to their franchises. In this case, there has been an increase in sales over the sporting season. However, the sales are still not enough to match the amount of money the company is spending on advertisements. On the other hand, they have been suffering lawsuits leading to them loosing money and decreasing the popularity of their brand name (Rilley 2010). This makes the efforts they are spending to advertise in the name of increasing their brand recognition useless. Therefore, this is a poor operational strategy for the company.

Summary

i) Subway Company

According to the above analysis, it is clear that Subway Company has the excellent operational strategies. This is because the management of the company has been able to mix the different operations to produce the best for their customers. For instance, they decide to concentrate on their customers needs. Therefore, their main aim is to satisfy their customers at all cost. In this case, they have used the four operational strategy matrix combinations to perfect their mission. At first, they have made decisions that are strategic and related to their mission. In this case, they are dedicated to providing fresh, healthy foods to their customer. Additionally, they are making sure that their orders do not take before the customer gets them.

Secondly, they have allowed intermediaries to provide their services. In this case, the intermediaries can satisfy their customers because they are getting first hand contact with them. Additionally, they are taking advantage of their resources. They have used money to train their employees on customer satisfaction. Lastly, their slogan is marketing their products for them. People like eating fresh foods. Their slogan ‘Eat fresh’ is attracting many customers. Lastly, they are proving to customers that their foods are fresh by showing them that they are using fresh vegetables to prepare their foods. As a result, they have grown rapidly, and they are still increasing their customer base.

ii) Quiznos Company

Based on the above analysis, Quiznos Company has the worst operational strategies. This is because instead of expanding, they are loosing many customers to their customers leading them to most of their franchises to close down. One of their strategies is to concentrate on maintaining high quality foods. This is not a bad strategy but the problem is that the company is not employing the combination of the operation strategy mix effectively. For starters, they are not supporting their franchises in times of need. In the end, it is making the franchise have poor customer satisfaction leading to closer.

Secondly, they are not using intermediaries to prepare their foods. In this case, they are not coming into any contact with customers. What they do not know is that in the food industry customer satisfaction is one of the most fundamental aspects of this business. In this case, they are losing many customers to their competitors. Moreover, they are using all their resources to concentrate on maintaining high quality products. It is the best option to maintain high quality foods, but the problem is that they are forgetting other areas that need improvement. This results them to lose customers to their competitors. Additionally, they are spending more than they are earning in revenues leading to close down their franchises. However, they are making initiatives in advertising their foods, but it is not enough.

Recommendations

i) Subway Company

Subway Company has an excellent operations strategy as compared to their competitors. However, it will wrong to say that they have a perfect operational strategy. This means that they still have a long way to go before they become the best in the world. The first recommendation is that they should start concentrating on improving the already existing stores. In this case, they should consider improving the quality of their food products before they consider expanding to the other territories. Secondly, they should consider improving their marketing competitiveness. In this situation, they should make their products known globally through proper advertisement strategies. When they employ these strategies, they will become the leading fast food all over the world.

ii) Quiznos

In order for Quiznos Company to gain competitive advantage over their competitors, they need to create a new operational strategy that will attract more customers to their restaurants instead of chasing them away. First, as they are maintaining their high quality products they should start concentrating on other customer needs. For instance, they should involve intermediaries because they come in close contact with their customers. Secondly, they should consider training their employees on provide fast delivery on orders to their customers (Slack, Chambers & Johnston 22). This will mean that they can maintain their high quality products and at the same time, they can provide customers satisfaction. Lastly, the management should try to support franchises that are in need so that they cannot close down. If they follow these recommendations, they will have a strong operational strategy that they will attract more customers to their franchise gaining competitive advantage.

Works Cited

Bourne, Mike, John Mills, and Norman Faull. Operations Strategy and Performance: The Resource-Based View. Bradford, England: Emerald, 2003. Web.

Brans, Jean-Pierre, G Coppin, Ph Lenca, Tawfik Jelassi, Marc Roubens, and Pascale Zaraté. “Management on the Future, Mcda, Dynamic and Ethical Contributions: Feature Issue.” European Journal of Operational Research. 153.2 (2004): 267-530. Print.

Linetsky, Barry, T. Quiznos Agency Against Creative Destruction in a Philosophic Vacuum. The Strategic Planning Group. August 2007. Web. January 12, 2012.

Mccarty, M. Fast Foods Market Forecast – The Subway Example of Strategic Product Positioning. Ezine Articles. September 17, 2007. Web. January 12, 2012.

Novel Guide. Subway Restaurant. 2011. Web. January 12, 2012.

Novel Guide. Quiznos Restaurant. 2011. Web. January 12, 2012.

O’Brien, Christopher, and Jan Olhager. “Structuring and Planning Operations.” International Journal of Production Economics. 85.3 (2004): 2004. Print.

Rilley, Allyson. Quiznos Veteran Named CEO. Business Wire. October 5, 2010. Web. January 12, 2012.

Russell, R. & Taylor, W. B. Operation Management. New York, NY: John Wiley and Sons, 2006. Print.

Slack, Nigel, Chambers, S. & Johnston, R. Operations and process management: principles and practice for strategic impact. New York, NY: Prentice Hall/Financial Times, 2009. Print.