mangmant and business

Critical Thinking Assignment 1 Due to Thursday 5 August 2021, 11:59 PM -Hit & Miss One Small Franchise Produces One Big Idea SUBWAY has enjoyed top franchise rankings consistently for Something else happened. Demand for the $5 footlongs was so more than a decade. With 30,000 sandwich restaurants in nearly 80 great that franchise owners began to experience shortages of certain countries, the firm is poised to become the single largest fast-food ingredients. They couldn't get enough bread, turkey, ham, or tuna. One chain in the world. But SUBWAY is made up of many small busi- franchisee recalls being in a panic. "The whole thing took on a life of nesses-franchises-and sometimes what seems to be an insignifi- its own, " notes Jeff Moody, CEO of SUBWAY's advertising arm. cant idea on the part of one franchisee can change the shape of the With one motion, Stuart Frankel struck a chord with consumers entire organization. who were looking for ways to enjoy themselves and stretch each dollar Stuart Frankel is one such franchisee, and his idea was simple: on at the same time. "There are only a few times when a chain has been weekends, charge a special price of $5 for a footlong SUBWAY sand- able to scramble up the whole industry, and this is one of them, " notes wich. Since this was a price decrease of about $1 per sandwich, it took restaurant consultant Jeffrey T. Davis. "It's huge." Sometimes a small awhile for Frankel and two other local Florida SUBWAY franchisees idea is really big. to convince corporate leadership that the idea was a good one. The economy was sluggish, food costs had crept upward, and SUBWAY Questions for Critical Thinking shops were virtually empty because consumers were eating at home 1. Why do you think Stuart Frankel's idea was so successful instead of dining out. Frankel's employees stood idle at their stations with consumers? Would it have been as successful during as sandwich sales declined. But after pressing hard, Frankel got the OK different economic circumstances? Why or why not? from corporate headquarters. From there, a chain reaction began. 2. A franchise company is only as good as its franchisees. "I like round numbers, " quipped Frankel about the $5 price. And a franchisee's success is based in part on the decisions SUBWAY customers liked the number too. As soon as the special pric- and support of corporate leadership. If the $5 footlong ing was announced, they returned in droves. Sales increased by double promotion had failed, how do you think the outcome digits. Employees made sandwiches as fast as their fingers could fly. would have affected Frankel's franchise business? How Meanwhile, SUBWAY's corporate marketing team pushed the $5 pro- might it have affected SUBWAY? motion nationwide-franchises from New York to New Orleans began offering $5 footlongs. When the initial four-week time span for the Sources: "Subway Brand Ranked Number One Provider of Healthy Options in Zagat promotion was up, marketing executives extended it to seven weeks. Survey," http:/www.subway.com, accessed April 2, 2010; "Subway Restaurants Again When that time lapsed, they decided to extend it indefinitely but with a Named #1 Worldwide Franchise Opportunity for 2009," http:/www.subway.com, accessed April 2, 2010; Matthew Boyle, "The Accidental Hero, " BusinessWeek, November limited number of sandwich variations. 10, 2009, http:/www.businessweek.com