,Table of Contents
1. Introduction 2
2. Analysis Subway 3
2.1 Entrepreneurial Orientation 3
Autonomy 3
Innovativeness 3
Proactiveness 4
Competitive Aggressiveness 4
Risk-Taking 4
2.2 Organizational Design 5
Structural Dimension 5
Contextual Dimension 8
2.3 Corporate Social Responsibility 9
Past CSR Initiatives 9
Current CSR Initiatives 10
Future CSR Initiatives 12
3. Conclusion 13
4. Bibliography 14
5. Appendix 16
Word Count (excluding appendix & footnotes) = 4396 Words
1
, 1. Introduction
The story of the Subway brand started more than 50 years ago when Peter Buck changed the life of a
college student with a few simple words; “Let’s open a submarine sandwich shop.” It was Peter Buck that
gave college freshman Fred DeLuca the idea to open a sandwich shop to help pay his tuition. The partners
opened their first restaurant in Bridgeport, where they served fresh, affordable, made to order sandwiches.
The popularity of the sandwiches continued to grow over the decades but one thing remained the same
and that was their core values and principles: (1) always provide exceptional service to your valued
guests; (2) provide the highest quality menu items at a price everyone can afford and enjoy; and (3) keep
operating costs low and ensure you have great systems in place and never stop improving. Today, the
brand is the world's largest sandwich chain with more than 42.000 locations around the world. They have
become the leading choice for people seeking quick, nutritious meal options. From the beginning, Fred
has had a clear vision for the future of the Subway; ‘’as we continue to grow, we are guided for delighting
1
customers by serving fresh, delicious sandwiches made-to-order right in front of you.’’
But, why did we select Subway? Subway has the most locations of any fast-food chain on the planet and
all of the thousands of Subway locations across the world have been opened by franchisees; small
2
business owners, working independently from the parent company. Its franchising model helped it to
3
expand rapidly, but on the other hand, it has also impacted franchise owners negatively. The unique
franchise model encourages franchises to open thousands of inexpensive locations around the world; often
dangerously near existing Subways shops. With declining sales and too many locations, many franchisees
4
are struggling to make a living. Besides, challenges such as demand for healthy food, home delivery and
Fair Trade practices make it extremely difficult for Subway to source these products at a relatively
5
affordable price without logistical problems.
The combination of Subway’s unique franchise model and upcoming challenges in the fast food industry
call for further research. Based on corporate information and interview with a franchisee entrepreneur, we
investigated the entrepreneurial philosophy of Subway, by examining its performance compared with
entrepreneurial orientation (EO), organizational design (OD) and corporate social responsibility (CSR).
Based on this research objective, the following research question has been constructed: ‘’To what extent
is Subway((‘s) franchise model)) leading entrepreneurially?’’
1
Subway Corporation. (2019a). Company information retrieved on October 1, 2019 from:
https://www.subway.com/en-US/AboutUs/History
2
Taylor, K. (2018). Experts and Insiders Say Subway Is Haunted By a Fundamental Flaw That Is Forcing the Chain to Close
Hundreds of Locations. Retrieved on October 1, 2019 from:
https://www.businessinsider.com/subway-franchise-model-forces-locations-to-close-2019-9?international=true&r=US&IR=T
3
Narishkin, A & Cameron, S. (2019). Subway's 42,000 Locations Are the Most of Any Fast-Food Chain on the Planet, But
Franchise Owners Are Taking a Hit. Retrieved on September 26, 2019 from:
https://www.businessinsider.com/subway-fast-food-chain-locations-franchise-rise-fall-2019-8?international=true&r=US&IR=T
4
Taylor, K. (2018). Experts and Insiders Say Subway Is haunted By a Fundamental Flaw That Is Forcing the Chain to Close
Hundreds of Locations. Retrieved on October 1, 2019 from:
https://www.businessinsider.com/subway-franchise-model-forces-locations-to-close-2019-9?international=true&r=US&IR=T
5
Infinite Research. Trends and Challenges in the Fast Food Industry. (2017). Retrieved on October 1, 2019 from:
https://www.infinitiresearch.com/thoughts/trends-challenges-fast-food-industry
2
1. Introduction 2
2. Analysis Subway 3
2.1 Entrepreneurial Orientation 3
Autonomy 3
Innovativeness 3
Proactiveness 4
Competitive Aggressiveness 4
Risk-Taking 4
2.2 Organizational Design 5
Structural Dimension 5
Contextual Dimension 8
2.3 Corporate Social Responsibility 9
Past CSR Initiatives 9
Current CSR Initiatives 10
Future CSR Initiatives 12
3. Conclusion 13
4. Bibliography 14
5. Appendix 16
Word Count (excluding appendix & footnotes) = 4396 Words
1
, 1. Introduction
The story of the Subway brand started more than 50 years ago when Peter Buck changed the life of a
college student with a few simple words; “Let’s open a submarine sandwich shop.” It was Peter Buck that
gave college freshman Fred DeLuca the idea to open a sandwich shop to help pay his tuition. The partners
opened their first restaurant in Bridgeport, where they served fresh, affordable, made to order sandwiches.
The popularity of the sandwiches continued to grow over the decades but one thing remained the same
and that was their core values and principles: (1) always provide exceptional service to your valued
guests; (2) provide the highest quality menu items at a price everyone can afford and enjoy; and (3) keep
operating costs low and ensure you have great systems in place and never stop improving. Today, the
brand is the world's largest sandwich chain with more than 42.000 locations around the world. They have
become the leading choice for people seeking quick, nutritious meal options. From the beginning, Fred
has had a clear vision for the future of the Subway; ‘’as we continue to grow, we are guided for delighting
1
customers by serving fresh, delicious sandwiches made-to-order right in front of you.’’
But, why did we select Subway? Subway has the most locations of any fast-food chain on the planet and
all of the thousands of Subway locations across the world have been opened by franchisees; small
2
business owners, working independently from the parent company. Its franchising model helped it to
3
expand rapidly, but on the other hand, it has also impacted franchise owners negatively. The unique
franchise model encourages franchises to open thousands of inexpensive locations around the world; often
dangerously near existing Subways shops. With declining sales and too many locations, many franchisees
4
are struggling to make a living. Besides, challenges such as demand for healthy food, home delivery and
Fair Trade practices make it extremely difficult for Subway to source these products at a relatively
5
affordable price without logistical problems.
The combination of Subway’s unique franchise model and upcoming challenges in the fast food industry
call for further research. Based on corporate information and interview with a franchisee entrepreneur, we
investigated the entrepreneurial philosophy of Subway, by examining its performance compared with
entrepreneurial orientation (EO), organizational design (OD) and corporate social responsibility (CSR).
Based on this research objective, the following research question has been constructed: ‘’To what extent
is Subway((‘s) franchise model)) leading entrepreneurially?’’
1
Subway Corporation. (2019a). Company information retrieved on October 1, 2019 from:
https://www.subway.com/en-US/AboutUs/History
2
Taylor, K. (2018). Experts and Insiders Say Subway Is Haunted By a Fundamental Flaw That Is Forcing the Chain to Close
Hundreds of Locations. Retrieved on October 1, 2019 from:
https://www.businessinsider.com/subway-franchise-model-forces-locations-to-close-2019-9?international=true&r=US&IR=T
3
Narishkin, A & Cameron, S. (2019). Subway's 42,000 Locations Are the Most of Any Fast-Food Chain on the Planet, But
Franchise Owners Are Taking a Hit. Retrieved on September 26, 2019 from:
https://www.businessinsider.com/subway-fast-food-chain-locations-franchise-rise-fall-2019-8?international=true&r=US&IR=T
4
Taylor, K. (2018). Experts and Insiders Say Subway Is haunted By a Fundamental Flaw That Is Forcing the Chain to Close
Hundreds of Locations. Retrieved on October 1, 2019 from:
https://www.businessinsider.com/subway-franchise-model-forces-locations-to-close-2019-9?international=true&r=US&IR=T
5
Infinite Research. Trends and Challenges in the Fast Food Industry. (2017). Retrieved on October 1, 2019 from:
https://www.infinitiresearch.com/thoughts/trends-challenges-fast-food-industry
2
