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Eco/561 Business Proposal

Business Proposal ECO/561- Economics August 11, 2011 Dr. Etta Egbe Business Proposal The objective is to create a business plan that will provide convenience to patients, visitors, and staff at Singing River Hospital. At the same time reduce service cost, achieve ideal production levels, and add revenue to Subway at Singing River Hospital. Moreover, the business proposal will identify methods to minimize cost for Subway. Our business proposal consists of supplementing visitors and staff-related retail Subway food services at Singing River Hospital and is not created to substitute for patient meals.

Following this further, healthy low fat menu choices will be offered to patients on restricted diets. This will benefit the food service and increase satisfaction to patients. Additionally, food will be prepared fresh, consist of nutrients, and offer a wide range of healthy choices. At the end of the business proposal, Subway at Singing River Hospital will have a strategy to follow to make the franchise successful. In a high profile hospital such as Singing River Hospital it is imperative to have a strong brand in place. Customers desire the highest quality product, service, freshness, and appropriate food safety procedures.

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To increase revenue a diverse menu will be available to visitors and staff. A diverse menu is important because customers will come visit the restaurant on a regular basics. Also catering options are offered throughout the day to satisfy customer needs. At Subway we understand that individuals enjoy saving buck or two; therefore, an affordable and value menu is in place for customers. In addition, menu prices are the lowest in the sandwich category. Subway chains take pride in providing excellent customer service at all restaurants. Friendly service will be practiced to every customer.

This practice is essential and will increase revenue by bringing customers back to enjoy another meal with us. For the simple fact, customers want to be appreciated for his or her service; customer service is key. Last but equally important, because hospital systems adopted a closed system, we will offer our service 24 hours seven days a week. Pursing this further to increase revenue flyers will be distributed to patients and staff rooms. To maximize profits, Subway at Singing River Hospital main focus is to establish individual prices in which marginal cost equal marginal revenue (McConnell, Brue & Flynn, 2009).

It is clear that customers will pay more for sandwiches with more meat rather than a sandwich will less meat in it. In the sandwich business, sandwiches with single meats are priced at five dollars each. On the other hand we will raise the price of single meat sandwiches to see if it can hold the demand. For the simple fact, as sales increase we must account for labor cost, discounts, and other variable cost. For example, if 20 sandwiches are sold we will profit a hundred dollars, 40 sandwiches, profit would be 200 dollars, 60 sandwiches, profit will be 300 dollars, and for 80 sandwiches sold the profit will be 400 dollars.

The marginal profit determine as each incremental increase in sales. Marginal profit is defined as the change for each sandwich sold (McConnell, Brue & Flynn, 2009). Following the example above we have determined a unit is an increment of 20 sandwiches. To increase sales from zero to 20 sandwiches the marginal profit is 100 dollars. To increase sells from 20 to 40 sandwiches, marginal profit would consist of 50 dollars. Raising sales from 40 to 60 sandwiches the marginal profit is 100 dollars. However, increasing product sales from 60 to 80 sandwiches results in a marginal profit of negative 25.

In this case the profit maximizing quantity is 60 sandwiches. This is the limit before the marginal profit becomes negative. The more sandwiches sold the higher variable cost are. Variable costs include raw materials, shortage, commissions, and labor. In addition, when large quantities are sold discounts are given to customers who follow with lower per unit for the revenue. Without this information it will recommended that an accountant is hired at a salary of 45,000 per year. The accountant salary will include taxes and benefits. Also computer equipment and accountant programs will be needed.

Identifying appropriate strategies for products and services is the most important decision a business can make (Nagle, 2007). Firms compete to meet the demand of customers in several ways. However, our focus is to make a distinction between price competition and nonprice competition. Price competition involves discounting the price of an n product to increase consumer demand. Following this, nonprice competition focus on differ strategies to increase the market share. At Subway both strategies will be use to compete with competitors. Also we will do a survey with customers from ages 13 to 60.

Also customers will be asked to rate our customer service, cleanness of the store, and the quality of the sandwiches. In addition each customer will be asked if he or she will come back to visit the restaurant and if recommendations be giving to family and friends. Also we will compare our sandwiches to competition and customer what he or she like and dislike most about Subway sandwiches so the necessary improvements can be made. Government regulations will be considered and followed because we do not want to be fine or closed for not meeting government standards.

Subway at Singing River will offer store loyalty cards, advertising, and extension of store hours (24 hours). Food prices fluctuate substantially. Therefore, Subway implemented flexibility into menu pricing to accommodate changes in the market (Subway, 2011). A major marketing strategy is to market to older as well a younger audience at Singing River Hospital. Customers want to feel as if he ore she is receiving good value services for their money. Subway will launch local and national campaigns to increase product differentiation. Our first campaign will be launched is the SWOL campaign.

This campaign is a local movement to raise awareness and educate communities on the need to prevent childhood obesity. Today Subway offers a healthy menu for children, which come with grade A milk, fruit juice, instead of fries. Also Subway will lead the way with the Josh Music campaign. This campaign will market to individuals form ages 30 and older. Josh Music campaign will illustrate health benefits of products. The marketing differential effect of Subway will put us ahead of competitors. Product differential can improve revenue, which will equal to success.

Generally speaking there are other ways to minimize cost for products at Subway. First we will examine our restaurant needs. Second , build relationships with wholesale vendors. Products will be purchased from a wholesale distributor. In addition, we will minimize cost by purchasing products once at the beginning of the month. A marketing and catering plan strategy will be implemented. Employee will be trained on properly handling products to prevent losses. Conclusion In final consideration this business proposal will assist Subway at Singing River in moving to the next level in opening more franchises in hospitals.

This is continuation process and competition will enter hospitals. However, Subway must remain poise and continue providing superior customer service, maximizing profits, and continue to meet customer needs. References McConnell, C. , Brue, S. , & Flynn, S. (2009). Economics: Principle, problems, and policies (18th ed. ). New York, TX: McGraw Hill/Irwin. Nagle, T. T. (2007). The Strategy and Tactics of Pricing (5th ed. ). New York, NY: John Hogan. Subway. (2011). Subway Fresh Buzz. Retrieved from http://http://www. subwayfreshbuzz. com/


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