Global Business Opportunities

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The Subway story began in 1965 when Fred DeLuca opened his first sandwich shop in Bridgeport, Connecticut. Since that time, “There are more than 28,800 SUBWAY® franchises in 86 countries and territories worldwide (as of 02/01/08)” (www. subway. com, 2010). About 3,700 stores have opened outside of the United States. The first challenge was accepted when an entrepreneur from Bahrain offered the company to open SUBWAY® overseas, such as the Persian Gulf Island. Since then, SUBWAY® has adapted to many different cultures and languages.

Twenty-six years have passed since the first international SUBWAY® was opened, and since then the expansion to the international list just continues to grow. I think because of Brazil’s factors such as an expanding economy, improved economic and policy reforms, increased agricultural production, geographic factors, social activities and demographic trends, economic development and cultural characteristic, created global business opportunities for the SUBWAY® chain in Brazil. Innovative government programs and a booming economy made it possible for regular Brazilians to become fast-food restaurant owners, such as SUBWAY®.

Juan Forero (2010) in his article for The Washington Post has written that “Brazil’s $1. 3 trillion economy is bigger than those of India and Russia, and its per-capita income is nearly twice that of China” (Forero, 2010). In addition, Brazil’s natural resources such as crude oil are projected to make the country “one of the world’s biggest crude producers. ” A growing population and tourism are adding more strong points to expand SUBWAY® operations in Brazil, and demonstrates a strong development area. Potential Markets

SUBWAY® restaurants gained popularity not only in the United States, but also became very valuable in international markets. By offering sandwiches that simply taste good and adapting to different cultures, customs, and eating preferences, but without losing its original concept, SUBWAY® was able to educate potential customers about their most famous sandwiches, and tailor their menu to specific country dietary customs. As a result SUBWAY® was able to build their brand name globally. SUBWAY’s® target market is young Brazilians who prefer a tasty, nutritious, fast- made sandwich with great health benefits.

Moreover, SUBWAY’s® owners can choose their own food suppliers, and have an access to the most fresh and low-cost local ingredients, which helps customers to perceive and appreciate their brand. According to Chancey from QSR magazine ( 2010) interview with Don Fertman, SUBWAY’s director of development, SUBWAY’s® original top 10 high-growth potential territories were Australia, New Zeeland, Japan, United Kingdom, Spain, Italy, France, Germany, Puerto Rico, and the Benelux countries, however, because of the global recession, SUBWAY’s® analysts were looking at Brazil, Russia, India, and China as the stimulus for the future business success.

As of today, Brazil has 436 stores and is rapidly growing. Absolute and Comparative Advantage The SUBWAY® restaurant chain in Brazil has absolute and comparative advantages. It has an absolute advantage because Brazil is a farm production country and has plenty of resources available at low costs. I think that Brazil’s absolute advantages are geographic factors such as good climate and tremendous potential to convert unused land to agricultural activities. Brazil remains one of the biggest countries in the world that contains at least 547 million hectares of undeveloped virgin land and rainforest.

It has comparative advantages because SUBWAY® represents a great example of a fast food franchise that allows owners to choose their own food suppliers, and has an access to the most fresh and low-cost local ingredients. They are really proving their advertising slogan – “Subway – eat fresh”. Business Opportunity Analysis SUBWAY® has tremendous success not only for their low-cost start up, but also for a non traditional approach to operate their restaurants. They offer great business opportunities to entrepreneurs who are looking for non-traditional or healthier Sub offerings.

Some of the entrepreneurs are leaning more towards to an upscale trend, which became very popular in Brazil amongst young consumers. Besides, one of SUBWAY’s® biggest advantages are being first in almost every country, which gives them better name recognition, and other factors are strong Brazilian economic growth and expansion. I would like to summarize by taking into consideration the following components such as geographical, agricultural, expansion and economic growth, government incentives and programs, SUBWAY® should respond actively and take advantage of business opportunities in Brazil.

Customer trends show a huge demand for fresh and healthy fast-food items, and customized sandwiches are very popular in Brazil. Using low-cost agricultural products as a comparative advantage create more ambient and convenient locations, focus on targeting middle and upscale class groups using the brand name. Build more stores in the areas with good potential growth or in the business areas and help new owners to grow. Help to find government programs and incentives to motivate new owners.

Use creative design by including bright colors and cultural Brazilian elements. Focus more on market needs and demands. Create more value on money products. Module 2: ANALYZING INTERNATIONAL COMPETITORS Potential Competitors Brazilians unlike American are not a victim to unhealthy fast food intake. Fast food restaurants are often seen as impolite by Brazilians which is expressed by the limited about of fast food restaurants that are in the country. There are two major fast food chains in Brazil: Bob’s and Habib’s.

At the Bob food chair the customers are provided and limited to hotdog, hamburgers, milkshakes and sundaes. Habib’s specializes in Middle East food such as tabouleh, sfiha (a small, round flatbread topped with minced beef or cheese) or kibbeh (a croquette of beef shaped like a rugby ball with either an olive or some catupiry cheese inside) along with Brazilian sandwiches like bauru or beirute. Currently neither Bob’s or Habib’s provide the people of Brazil with a options to of eating a different kind of food than the norm, while also providing them pleasant cuisine experience.

Subway has the ability and the resources not only to provide the people of Brazil with their regular Brazilian sandwiches such as the Sfiha and kibbeh, but also to provide the people of Brazil which a wider variety of meals all serve in a well kept environment. (RDJ) Competitive Advantages We feel that subway can maintain a competitive advantage over the local fast food restaurants creating a comfortable environment for all customers while providing them with a wide range of food to meet every need.

While the local restaurants might offer customers food at a low price we believe that once people are exposed to a great dining experience at Subway they will not feel the need to criticize fast food restaurants, “their views will change when exposed to the subway, way”. People in Brazil seem to prefer a fine dining experience and we will make sure that all is provided so that customers will be satisfied. Subway offers an alternative to greasy food which is very beneficial to a person’s health.

Our restaurants aim to provide people will not only delicious food which is affordable, but also food that is healthy so one does not have to feel guilty after eating out at one of our fine restaurants. (RDJ) International Strategies Our approach to Brazil would be to design a fast food restaurant so upscale that it would change the way that Brazilians think about fast food. We will create a restaurant so customer friendly, keeping in mind all the likes and disliked of the people in Brazil and incorporating it in our restaurant. A subway experience in Brazil will change the view of fast food restaurants.

When we are fully accepted we will expand all across the country providing our goods to all who want to experience. Subway will create a fast food revolution! Action Plan One of the benefits for Subway is our ability to appeal to the Brazilian demand in the way they want a fast food restaurant to be. Subway will make sure that all its location in Brazil is operation in a way acceptable to the people of Brazil. At subway we aim to please and with our reputation that we have established over the many years we have been in business; we find it no different to please the people in Brazil the way we have been pleasing Americans for years.

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