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Bagel Store Versus Subway

We face a new business threat from Subway’s entry of to our locality. The new Subway outlet is located on the same block as our Bagel store. This means that our regular clients will have the choice of either coming to our store or trying out the products offered by Subway.

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Subway deals primarily in salads, pizzas, and submarine sandwiches. Subway stores are franchises and operate in different locations globally. Subway as a brand continues to grow at a tremendous rate worldwide. It presents a formidable challenge to our operations.

Our bagel store has long-standing relationships with the locality with a sizeable customer base largely made up of regular patrons. They mean the most to our survival. We must do our best to protect this segment from infiltration by Subway.

If we can maintain them, we will continue to get the one-time customers, most of who rely on referrals from locals on the best stores to patronize, while in the area.

Our business model

Over the years, we have established ourselves as the consummate Bagel store. Our selling point remains to make and serving hand-rolled bagels where all services meet the Bagel franchise service standards.

This continues to appeal to clients who appreciate the rich process of making bagels that we use. Our unique flavors appeal to the different tastes of those who love bagels.

We also have the reputation of strong customer support and service among our clientele. Our key weakness remains to expand our delivery markets to homes and corporate organizations

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Subways business model

Subway as a business boasts a strong presence in the domestic market, and the opening of a Subway store within the same block as ours means that they have identified the strategic nature of the location. They will be offering alternatives to our bagels.

By providing sandwiches and other products, our customers will now have the choice of either taking our bagels or Subways products, making their products direct competitors to ours.

We will not have a big problem retaining bagel lovers with our current outlay, but we are likely to see a greater degree of competition for the younger patrons who are experimental and love their freedom of choice.

Either way, if we do nothing, then we must anticipate some loss of numbers as the Subways restaurant establishes itself.

Strategy options

To stem the tide of competition that Subway presents, we have the option of developing a loyalty program to rope in the easily swayable younger clients to protect our walk-in business.

It means that we will take advantage of our greater understanding of the local market and the relationships we have built over the years to entrench ourselves. Such incentives may include a discount offer for every first time customer introduced by a long time client.

Our second option is to pursue a market growth strategy to bring in corporate clients and to strengthen our home deliveries section. Subways strategy is to develop the walk-in business first and after a few months to begin working on the deliveries business.

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By strengthening our deliveries business, we will be able to move ahead to expand our market share before they arrive such that by the time the market attains an equilibrium, we will be either doing as well or better.

In actual sense, it seems that we will have to pursue both strategies if we intend to maintain our margins. If we successfully maintain our clientele base from the walk-in business and the same breath strongly develop our deliveries section, we will end up with much better margins.

We must pay great attention to our customer service standards since it is the cornerstone of our business strategy. As we do this, we must continue to appeal to our customers at the emotional level as a business that offers handmade bagels done with love.

Our goal is to retain and grow our market share as we adapt to living with a competitor very close to us, who seeks to eat into our market share.


To implement this strategy, we need to organize for a customer service refresher course for all our staff beginning with the frontline staff. We also need to find out quickly our weaknesses in the deliveries business to strengthen our efforts in that area.

It is feasible for us to attain a 300% growth in this business area over the next six months based on industry projections. There will need to keenly monitor the purchasing patterns and volumes of our clients so that we can tell early whether we are losing any of them to Subways.

Since we are aiming at the retention of market share in our walk-in business, it will be okay for us to anticipate a period of flat growth over the next six months.

On the other hand, by expanding our deliveries section, our return on investment in this segment should be 150% since 50% of the growth will finance the expansion. This will translate to an overall increase of 20% for our business in the next six months.

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In the meantime, we must continue to monitor and anticipate the likely strategies Subway will implement to gain a foothold in the market here.

Optimistically, they will attract fresh clientele not familiar with this section of the town who may choose to sample out our products resulting in business growth for us.

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