It might include a consideration of legislation, such as consumer laws, regulation, such as control of certain companies, political pressures and the government view of certain activities. Factors that could affect are Government legislation such as taxes on products and interest rates. This will affect the business when determining the selling price of the products. In order to make a profit after taxation, the price will have to be increased; however the price must also be appealing to the customer and rival that of your competitor.
Healthy and safety legislations will have to be taken into account especially since my business deals with food. Improving the health and safety rules according to the regulations set by the franchise would do this. This might involve the analysis of a variety of economic factors and their effects on business. They might include: consumer activity such as spending patterns, economic variables such as inflation, and government policy such as exchange rates. Fixed and variable costs of the business and the effect of changes in product and labour markets.
Other economic factors include income growth, debt & saving levels (which impact available money) and consumer & business confidence. These areas are global, but it is also important to look at factors affecting my own industry. Economic issues are the focus of future potential of profit making. This can involve the level of demand and the price in which the product will be sold for. This needs to be compared with other organisations prices in order to lure consumers.
Despite the fact that this is a franchise and costs are already set up, if however the cost of floor rises, then for my firm or other food retailers the price of floor is a crucial economic measure as without it we cannot make our product and sell them at a cheap price. Interest rates can affect consumer-spending patterns. The current interest rate is has increased to 2%. At this level it encourages consumers to save rather than spend their money. This will affect my production levels.
Reduced amount of stock will need to be ordered until the interest rate decreases or people are willing to spend more. In addition to this, interest on my debts will increase, and having an increase in debts will inevitable mean that it will be harder for me to pay back my loans. The current employment rates have increased in the past few years due to economic factors. Not only does this suggest that I have a wider selection for recruitment, being able to choose the most multitasked workforce. I also have the negative effect that money consumers are without money and are unable to spend.
This can be a decrease in sales of the whole market, and competition will become fierce in attempt to get loyalty from remaining consumers. In addition exchange rates can affect my business if deciding to import goods form abroad, or basing the factory in overseas. This can easily increase cost and promote a move back to the United Kingdom. Laws on competitive pricing, patterned ideas and quality standards can all affect the way in which my business is run. These laws can limit the company's expansion and take longer than expected.
Social factors influence people's choices and include the beliefs, values and attitudes of society. So understanding changes in this area can be vital. Such changes can impact purchasing behaviour. If the majority of society become less healthily aware about what they eat and I only sell healthy, nutritious food, my business will not make much profit over those who cater for both healthy and non-healthy. Social factors are concerned with health and environmental issues. Packages that can be recycle to help improve the environment, will increase customer satisfaction and loyalty.
In addition improving the health and safety within the companies working areas will motivate consumers and encourage people to want to work for the business. Other social factors I must examine are consumer attitudes to my product & industry, environmental issues (e. g. organic food versus food made in a lab), attitudes to health, wealth and age (the elderly don't want to be treated different from others). Added complications when looking at social and cultural factors are differences in ethnic and social groups. Not all groups have the same attitudes – and this impacts how they view products and services.
E. g. Muslims eating pork. Also the fact that Muslims eat Halal would affect my business because meat that is sold at Subway is prepared normally and not using the traditional Halal method. Thus, I will lose sells on these major ethical and cultural groups. However, another factor to consider is that location is dependent on the amount of customers I lose, if there are many Muslims in the area then sells will decline, if not many I will benefit on other ethical groups buying my products. Therefore location can still play a part with profit, especially to my target audience.
More consumers are becoming middle class, which means that a lot of the products wanted by the audience are luxury products. This can increase my product range allowing me to meet more consumers' wants. However this can also increase my costs, and if it is not successful, put my business into debt. The business must notice any changes in spending habits, or characteristics of consumers. Technological advances can both affect the products and/or the production methods. Advances in technology can have a major impact on business success and my business may suffer because there is not enough capital to keep up with other competitors.
This will be more evident as the firm already produces its own brand foods. Furthermore mobile tills and electric pay points within the store are new general store aesthetics. Although expensive in the short-term, in the long run, it will increase customer satisfaction and customer loyalty. Increased security methods may include real-time CCTV cameras and hidden cameras around the store to reduce pilferage; this can be mainly located by the cashier tills, as it is highly likely consumers could cause nuisance around these areas.
Production methods may introduce, faster production, meaning products are out in the market much quicker and a cheaper price. In addition quality is not sacrificed. Production methods will make producing quicker and possible with a higher quality level. Giving way to the innovation of products. Although with this new advancement I will need staff that can use it e. g. – EPOS till ware and also the capital to by and or train people to use it. Although a new production technique may be so expensive that the business may not be able to remain profitable.
Despite being a franchise, costs will be increased as new production techniques have already been sought for a quicker, quality service to the consumer. Thus increasing the profits and reputation it already has worldwide. Global recognition of this company has already improved its status, if improved technologies such as EPOS systems are used when I set up my firm, it will increase motivation amongst staff and thus customer satisfaction. Green issues involve the interest of the organisations and its interaction with the environment.
We need to monitor how we treat the environment with production methods especially, in order to comply with the current laws. These external factors that affect my business can have a positive effect, however, I believe in the short-term will have a negative effect. For example, in light of technological improvements, my business will need to have money, to take advantage of them. Unwilling bank societies maybe likely to refuse more loans, and therefore, consumers will always be one step ahead of me, producing more quality products much quicker.
This will in turn reduce my customer base, and rapidly reduce my sales. Increase in interest rates, will encourage consumer saving, and having an overall decrease in spending will mean that business will need to run on a low income revenue, this is negative for my business as I am relying on impulse buying and for a necessity food to buy when at lunch during a break at work 9for those fast-food lovers) and if consumers don't have any spare money a majority of my sales will fall into liquidation.
The SUBWAY chain's target market is adults between the ages of 18 and 49 who eat quick meals and are looking for good-tasting options. Also, the SUBWAY chain wants to increase its "consideration set" among frequent fast-food consumers who lead an active lifestyle and are seeking a balance of nutrition, taste, and value. The target audience is an important factor when setting up my business, as I will be relying on this to make my business a success.
My business is a sandwich store that sells food, food is one of the five basic needs and this means that everyone needs food in order to survive. Although this is the case it doesn't mean everyone will eat the food that I will provide. For example young children will not come to my shop to eat large subs so therefore I will need to attract them by selling them a specially tailored kids meal containing simple food with everything inside. In this way I am maximizing my target range.
Here is a plan about how I hope to attract other age groups: Young Children: I will be selling them the KidsPak consisting of simple food with a small sub sandwich with different choices of fillings called Deli-Style Sandwiches and a drink. Teens: I hope to encourage teens to my shop by selling a delicious variety of sub sandwich fillings of their choice, promoting certain menus such as 7 under 6 with less than 6 grams of fat. Also selling sweet desserts such as cookies.
Adult: I plan on encouraging adults who are fast-food consumers, who lead an active lifestyle and are seeking a balance of nutrition, taste, and value. For example a great choice of salads for those who are watching their calories. Healthy, nutritious meals for those who are health conscious will be available rather then going to stores where fast-food is full of fat such as McDonalds. If they want to eat something during their break at work, a quick meal is available at Subway.