Strategic Managment Assignment Example | Topics and Well Written Essays - 1750 words

Strategic Managment - Assignment Example It is also necessary to establish strong groundwork that has the capability to support successful implementation of the growth strategies. This paper describes the basic growth strategies and critically analyses how they are implemented by Subway as it continues to grow. The paper examines the strategic capability of Subway and identifies its competitive advantage over its competitors. It also discusses which of these strategic capabilities contribute to Subway’s competitive advantage. Subways Strategic Growth According to Aaker et al. (2006), market segmentation is one of the significant growth strategies that a small business can effectively accomplish. It involves identifying a sub-set of the whole market and focusing all the sales efforts on it. It is a way of being specific with regards to whom to sell the products to. Successful businesses usually slice out a particular section of the market and maximize their efforts towards owning it. With such focus, it is possible to understand the changing customer desires and engage in customer focused production. Even though the strategy may eliminate part of the prospective customers, it helps to concentrate on the core customers thereby developing a vibrant growth path. The entrepreneur makes business choices through segmentation with regards to who to serve, who to evade as well as which segment to focus on to increase profitability. According to Hoyer & MacInnis (2006), segmentation is a customer focused growth strategy that generates great impact value schemes for new market sub-segments. The foundation of this strategy is to understand customers in a different point of view. It requires managers and product experts gaining new perceptions with regards to customer desires and preferences, which is a significant step in identifying the inadequately served consumer groups as well as unseen growth opportunities. The market sub-segments can be based on recently identified customer needs, purchasing patterns as well as the profit margin of the sub-segments. Innovations are focused on the most promising sub-segments where an organization intends to create high impact value offers. The new innovations are tested within the sub-segments, which allows upgrading business on the basis of the results of the tests (Hoyer & MacInnis, 2006). According to Crawford & Benedetto (2008), small businesses can focus on low end consumer sub-segments. The cost to the consumer can be minimized through eliminating non-essential characteristics on the products such as expensive value addition that does not affect the product’s utility. Many customers in these sub-segments are likely to welcome the new changes since they lower the cost and hence increase affordability. The segmentation growth strategy for sub-way began with the decision to operate in smaller and more specialist outlets-such as schools and factories-because of its smaller scale business formula. Market segmentation was also applied in Subway through the assessment of customer needs whereby it was established that an inc reasing market share came to Subway because it offered a low-fat alternative to burgers and French fries. This knowledge was used in 1998 to develop a marketing campaign that focused on a line of seven low-fat sandwiches that significantly boosted sales. Further, the customer sub-segment that required full calorie meal was satisfied through the development of a range of big-eater sandwiches-for example, steak and cheese, which also helped to increase sales significantly. According to Aaker et al. (2006), product