PARTIAL CASE STUDY ANALYSIS 1

Partial Case Study Analysis

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PARTIAL CASE STUDY ANALYSIS 2

Partial Case Study Analysis

I. Introduction

Wawa is a fast growing food retail business entity that has witnessed various
transformations from its inception to date. Initially, the company produced iron stove plates and
fire backs (Avalos et al., 2010). Overtime, the company moved to the provision of dairy products
and it changed to a food market to meet the changing consumer needs. It also expanded its entity
to include Wawa Gas and the provision of quick cash through automated teller machines
(Wilson, 2019). However, due to the increased competition and the lack of differentiation in the
market, the company opted to shifty its operations to a Blue Ocean Strategy to maintain a
competitive edge in the market. The Blue Ocean shift involved the change from a convenience
store to a service restaurant that also provided convenience items and gas for its consumers
(Olenick, 2019). With this shift, Wawa also eliminated tables and serves at its quick service
restaurants to allow consumers to pick what they needed and exit the store. The differentiation
strategy at Wawa specifically for food involved the provision of ready-to-go fresh salads and hot
alternatives such as egg whites, turkey sausages, smoked bacon, roast chicken, variety of soups
for dinner and high quality coffee at lower prices than the established entities in the market
(Olenick, 2019). The strategy also involved the automation of the process through the provision
of ordering kiosks, which made it easy to serve consumers fast and efficiently and also
eliminated long queues. The overall outlook of the store was also modified to improve the ease
of access to goods Wawa also provided sufficient parking for the consumers. The store
associates also provided exceptional services for the consumers, which improved the appeal to
the customers and enabled them to build consumer loyalty to the brand. Wawa is currently
positioned as a quick service restaurant through the provision of high quality services that appeal
to the end consumers. Therefore, the following case study analysis offers an in-depth analysis of
the evolution of Wawa to determine the current operational environment of the company through
the analysis of the changes experienced in the company and the current operational environment
to determine the factors both at the external and the internal environment that drive the growth,
the performance of the company and its future prospects as quick service restaurant.

Statement of the Problem

Wawa faces various issues including the possibility of high competition from other
companies that have also adopted a similar strategy like Wawa’s. Following the successful shift
of the company and a modification of its business operations, various companies have started
considering a similar shift, which is likely to cause increased competition for the firm.
Additionally, the business model adopted by the company is subjected to high risk and low profit
margins, which may affect the ability of the company to thrive amidst the growing competition
from other companies who have adopted a similar model as Wawa.

Opportunity for Resolution

PARTIAL CASE STUDY ANALYSIS 3

The company can resolve the impeding problems by aligning value, profit and people as
it did in the past. Notably, the evolution of Wawa from an iron foundry which produced fire
backs and stove plates to textiles, dairy farm and currently a retail entity describes the constant
changes experienced by companies in an attempt to meet the changing demands of their
consumers (Wolcot, 2017). Differentiation of its products and quality production characterized
the business activities of Wawa and provided the framework for its success against its
competitors in the 1900s. For instance, as a dairy farm, Wawa produced quality milk, free of
contamination and with a guarantee of limited transmission of diseases such as tuberculosis to
the humans (Olenick, 2019). The company also successfully adapted to the changing demands in
the market by pasteurizing and homogenizing milk according to the state laws. The changes in
consumer preferences also saw an increase in the number of supermarkets, which gave
consumers the opportunity to purchase goods under one roof, also affected the relevance of
Wawa dairy products. However, Wawa strategically adapted to these changes by moving into the
retail store business and establishing the Wawa Food Markets. These grocery stores
differentiated their products and offered branded products from the company, which had gained
popularity among the consumers. Wawa’s popularity increased and in about 12 years, the
company had opened over 200 retail stores (Olenick, 2019). However, the automation of
supermarkets negatively impacted on Wawa as the company was unable to compete effectively
with the automated supermarkets and scaled down to a convenience store. Despite the high
number of convenience stores in the market, Wawa managed to maintain a competitive edge
through exceptional customer service and through emotional investment in the community,
contributing to consumer loyalty. The company also improved their services and offered more
convenient parking for their consumers, increasing their popularity in the market. The company
eventually expanded and introduced Wawa gas which guaranteed quality, efficiency and low
cost of the products by eliminating charges on credit cards (Wilson, 2019). Through the
introduction of the fuel stations, Wawa attracted customers that would refuel and shop at their
stores and it also introduced free Automatic Teller Machines (ATMs), making shopping
convenient. However, competition increased with the financial crisis of 2008, which forced most
companies to adopt a similar strategy as Wawa. Therefore, Wawa decided to move from the high
competition and adopted differentiation and low costs through the Blue Ocean Strategy.

Therefore, the company can maintain a competitive edge over the other entrants in the
market through differentiation and adoption to the changing consumer preferences and the
consumption patterns. For instance, the food industry has shifted from dine-ins and takeaways to
door to door deliveries that enhance convenience and efficiency. Therefore, the company can
meet the changing consumer needs through the introduction of fast and efficient delivery
services across its stores to maintain a competitive edge and meet the needs of the consumers.
However, other companies also have delivery services for food items; therefore, the company
can tap into the changes in technology to introduce efficient delivery systems. For instance, the
company can adopt the robotic delivery services to ensure that goods are delivered to the
consumers in a timely manner and that the customers get value for their money.
PARTIAL CASE STUDY ANALYSIS 4

Business Objectives

The main objective of Wawa is to provide high quality products, while focusing on the
satisfaction of the consumer. From its inception, the company focused on enhancing the quality
of products delivered by ensuring that all the quality standards were met and that the company
operated within the frameworks of the provisions of the law. For example, “in 1929, 24 years
after Wawa introduced its safe milk and dairy, Pennsylvania enacted laws governing the
processing and storage of milk that required all bulk sale milk be pasteurized. In response, the
Wood family invested $250,000 ($3.5 million, adjusted for inflation to 2016) in a modern dairy
processing plant (still in operation today) to pasteurize their milk” (Olenick, 2018 p. 2). The
company’s objective is also geared towards the provision and maintenance of value among the
consumers, therefore, the provision of automated services with fast service and convenience is
the core strategy of Wawa. For instance, in its Blue Ocean Strategy, the company focused on
automating the service points through the introduction of service kiosks, making it easy for
consumers to order food on time and to prevent long queues at the service points. As a result, the
company focused on fulfilling its mandate of the provision of quality services for the consumers
within a short time and reducing the long queues at the delivery points of service.

Additionally, Wawa’s objective is linked to embracing change and adapting to the

shifting trends in regards to the needs of the consumers and their preferences. As a result, the
company has undergone various transformations from its inception to meet the needs of the
consumers and to ensure the delivery of high quality services (Knowles, Lynch, Baris, &
Ettenson, 2020). Hence, over the years, the company has managed to adapt to the changes in the
market to its latest change to a Blue Ocean company, with limited competition and
differentiation of its products in line with the needs of the consumers. Therefore, the company
has successful managed to fulfill the needs of the clients while providing high quality services
that appeal to the changing demands in the industry.

The company is also focused on doing the right thing and doing it in the right way
(Avalos et al., 2010). Notably, the services of Wawa are characterized by standardization of
products to ensure that the consumers get the best in the market. The company also operates in
the food industry where the preservation of the client’s health is a key aspect of the provision of
quality services. Therefore, Wawa achieves this through the provision of quality inspected
products that address the various concerns of the consumers. For example, Wawa introduced
doctor certified milk in the 1900s to reduce the likelihood of transmission of diseases such as
tuberculosis to their clients.

Wawa is also focused on winning through the provision of quality services that meet the
needs of the clients. Through their focus on the customer, they are able to attract several people
and retain them due to the genuine concern towards their clients. Notably, most business entities
only focus on serving the customer with limited after sales service. However, the employees at
Wawa even follow up on the elderly clients if they do not show up at the store for long, giving
PARTIAL CASE STUDY ANALYSIS 5

the a differentiated approach towards client service (Olenick, 2019). As a result, the company is
able to attract and retain loyal consumers who understand the value of building a relationship
with the company. Therefore, the company is focused on the client satisfaction and their well-
being, which sets it apart from other entities whose services end at the counter.

Stakeholder Perspective

A systematic approach to stakeholder perspective reveals the requirement and expectations of

stakeholders in Wawa company. It further detects unclear or hidden requirements by defining the
stakeholders, analyzing their activities, understanding the gaps and performing something
different. According to the Wawa case study, its key stakeholders are its employees, customers,
shareholders, and suppliers. Each of these stakeholders has a different interest in the business.
Employees have a requirement for a good salary package. This is an expectation that must be
met by Wawa management. The customers want quality products that are served at reasonable
prices. The Wawa shareholders want high profits and revenues while the suppliers demand time
to complete their deliveries.

As Wawa adopts the Blue Ocean Strategy, the company must pay close attention to including
stakeholder requirements and expectations in its risk management steps in the operating activities
like food production and innovative projects. For instance, at Wawa, the customers raised an
ongoing need for speed and friendliness. This factor affects the supply chain by exerting pressure
on suppliers and employees. Systematically, the stakeholder requirement, in this case, causes a
conflict between the management, employees and suppliers. However, in such cases, most risk-
averse stakeholders would not want to engage in such businesses due to the available risk factors.
Also, the Wawa company presents a position of good employee management by giving
compensation to some hardworking employees; however, the company does not consider what
the target market (customers) demands. A customer is considered a major stakeholder in Wawa
business which contributes to profits and revenues in the company. Therefore, if Wawa fails to
consider the need of its customers in the food market, it ends up bearing a lot of losses.

Additionally, unlike customers, the shareholders have a single interest in high profits. At Wawa,
the shareholders are ready to do anything possible to realize good earnings. For instance, the
shareholders are at the forefront of supporting the Blue Ocean Strategy introduced as a leading
convenience store chain. With the advantage of online and technology, the strategy will focus on
unleashing associate ownership and humanism towards a blue ocean shift. This strategy works
best for the shareholders, and in their thought, it will ensure an upgrade of food service and
ensure the supply chain is affordable and leave behind more savings for their needs.

In analyzing this theory concerning the operations in Wawa, it is evident that Wawa
considers the key stakeholders in the success of the business entity, and it incorporates them in
the decision-making process. For instance, before Wawa adopted the Blue Ocean Strategy, talks
were held with managers and key stakeholders to determine the company's future. Through these
PARTIAL CASE STUDY ANALYSIS 6

consultations, a strategic decision was made to facilitate better operations within the company.
However, the relationships between stakeholders and the business entity are subjected to various
forms of disagreement, which may affect the performance of the business. As a result, it is
essential to address these issues to facilitate better cooperation in the business and enhance these
relationships. According to Parmar et al. (2010), “where stakeholder interests conflict, the
executive must find a way to rethink problems so that the needs of a broad group of stakeholders
are addressed, and to the extent, this is done, even more value may be created for each" (p.406).
Therefore, maintaining a good relationship with the stakeholders is key to facilitating the
company's better performance and providing an ideal environment for the company to thrive.

II. Discussion

Primary Activities

There are 5 primary generic activities of Wawa’s value chain analysis.

Inbound Logistics

The inbound activities at Wawa include dissemination of inputs, receiving and storing of Wawa's
products. Receiving and storing products involve conducting warehousing activities on products,
material handling, and the architecture concerning receiving and keeping the customer's
information safe. This is purely security and privacy concerns. According to the case study,
Wawa has outsourced most outbound logistics activities.

Operations

Activities that help Wawa retail business to transform raw materials into finished products are
the core initiators of processing in this business industry. For Wawa retail business, the activities
can mean performing customization of products, moulding products according to customer's
preferences, making food to make products and the entire cooking process involved in the
business. Also, customer service at Wawa involves using customer data to conduct significant
advertisements based on customers' behaviour and engagement pattern.

Outbound Logistics

Successful completion of the operations process leads to activities that involve distributing
finished products to other retailers, buyers and other channel partners. The activities involved
during these processes include warehousing - this is where accountability of available, expected
and released raw materials (food products such as wheat flour) is noted. Also, there are
wholesalers and retailers' order fulfilment activities, scheduling of deliveries, distribution
network and processing of every order.
PARTIAL CASE STUDY ANALYSIS 7

Marketing and sales

These activities are ways in which a product can reach a buyer, or the knowledge and existence
of the Wawa brand can be realized. The activities promote marketing and sales outcome.
Selection of distribution channel is a marketing activity that Wawa engages in during planning
and strategizing to reach the market. Another activity is an advertisement. In every business,
advertisement is about increasing the brand's awareness (Olenick, 2019). Marketing, sales force
management, pricing and promotion are activities that Wawa retail business involves during
marketing and sales.

Services

Wawa retail restaurant provides delivery services. This follows the newly upgraded online
servicing. Moreover, other services such as customization of foods such as cakes and chocolate,
packaging and preservation, post-sales reviews, training and customer services are offered as
primary activities.

Secondary Activities

These are support activities that anchor primary activities at Wawa retailers' business. The
support activities are divided into several value activities specific to Wawa retail business and
the current Blue Ocean Strategy. There is the general company structure, technological
development through research, human resource management and procurement services.

Procurement and purchasing

Procurement activities are undertaken to purchase the Wawa retail business value chain products.
However, the activities exclude purchase input itself. At Wawa, purchase input may include
machinery used in the business, raw materials for making and processing food, buildings, kitchen
equipment and office equipment (Olenick, 2019). Like any other business, procurement at Wawa
will also involve procedures, vendor management, partners in the supply chain, information
systems and ongoing performance evaluation.

Human resource management

According to the case study, human resource management activities have increased with the
adoption of the Blue Ocean Strategy. The activities include skill assessment, training of people,
recruiting and hiring, compensation, selection and other roles widely played by the Human
resource department. At Wawa, HR is essential as a defining factor to the success of its new
strategy through employing and recruiting key players in the value chain.

Technological development

Technology plays a vital role in the value chain of the Wawa retail business. For instance, the
economy was tough after the global financial fall, and competitors were catching up at Wawa.
PARTIAL CASE STUDY ANALYSIS 8

Through Blue Ocean technology and strategy, Wawa is determined to steer clear of the
impending red ocean (Olenick, 2019). By applying the blue ocean approach, Wawa got inspired
in a natural wake of getting to the top of its strategy by employing technology that will embrace
the current buying and selling behaviour in the digital market.

Company infrastructure

The firm activities that support operations at Wawa include finance, planning, accounting, legal
services, general management and quality management. The company infrastructure at Wawa
supports the entire value chain through the scope varies given at Wawa.

Porter’s Value Chain Analysis

Direct competitors in the food retail industry have specific advantages and drawbacks in the
market. The competition has brought specific advantages and disadvantages for Wawa company.
The main purpose for conducting Porter's Five analysis is to determine how competitive forces
shape the Blue Ocean Strategy adopted by Wawa Retail business. Besides competition,
consumers and sellers have a number of benefits or disadvantages to a business. This discussion
addresses the possible outcomes and current issues with the Blue Ocean Strategy by analyzing
competition in the industry, the potential of new entrants to adopt a similar strategy, the
bargaining power of providers and customers in the industry and the threat to substitutes.

 Competitive rivalry

According to Wawa business in the newly adopted strategy, the Blue Ocean Strategy,
technological advancement becomes the significant differentiating element. It is essential in
assisting customers and employees in customizing their methods to fit the market. A product
development strategy must be used if the current market growth changes for Wawa retail
business.

The business shifted to this strategy to escape the rivalry in the food industry in the target
market. According to the case, restaurants try to perform better in the industry, but there are
many strong competitors. It's not like McDonald's against Burger King. It's not like Costco
against Sam's Club, and it's not like Wawa against all the mentioned competitors. The intensity
of competition brings about the adoption of the new strategy. However, other popular and big
restaurants like McDonald's already apply a similar strategy.

 Potential of new entrants

The risks to accessing the new strategy at Wawa Retail Business are low because of the fact that
Wawa professionals internally drive the whole idea. Besides the popular and existing brands,
new brands are looking into investing in the food industry. Consumers tend to shift to a new
upgrade, more so where technology is currently used. Powerful customers and shareholders can
put pressure on companies to boost quality and reduce prices. New entrants will face huge
PARTIAL CASE STUDY ANALYSIS 9

opposition from stakeholder perspectives, such as the need for low prices, quick and efficient
deliveries that may not meet the demand for suppliers and concerns for quality. Supplier power is
no issue for Wawa's business (Olenick, 2019). This applies to Mcdonald's, Burger King, Costco
and Sam's Club. Supplier power may work against the new entrants in the market. Therefore, the
potential for new entrants is low.

 Bargaining power of suppliers

The main suppliers of Wawa are Amoroso which delivers ready-to-bake dough, McLane and
other food processing companies. The market is flooded with several suppliers making their
deliveries and pricing more affordable. However, powerful suppliers may exert pressure on
Wawa to increase their purchase price. Due to a high number of supplier players in the food
market, the bargaining power of Amoroso and McLane is low, resulting in affordable stocking
prices.

 Bargaining power of buyers

The Wawa retail business has friendly and considerable prices for all its customers. This pricing
is tagged along with the quality and quantity of food items. The blue ocean strategy at Wawa
drives several programs that aim to benefit customers in different ways, such as having
promotions, redeemable cards, vouchers, etc. These programs are used to gain customer loyalty
making Wawa customers have low bargaining power.

 Threat of substitute

There is much competition in the food industry involving similar products. Wawa has several
similar companies, such as McDonald's and Burger King, in the industry. However, starting a
restaurant or food retail business is easy and cost-effective. Currently, Wawa and the entire food
retail industry are faced with a high number of companies with similar products, which are
substitute services and products. Therefore, Wawa has to continuously invest in the blue ocean
strategy.

III. Recommendations

According to the case results, Wawa never wants to be in a crowd of competitors. It includes
innovation, collaboration, customer involvement and the new blue ocean strategy in its planning.
Although innovation has always stayed a steer in Wawa's business program, inventing modern
and digital business systems will work efficiently with the blue ocean strategy (Olenick, 2019).
The innovations should include online services where orders are remotely delivered to
customers. Social media is also another advent that will greatly impact Wawa.

For cost-cutting and revenue/profit enhancement, Wawa business must collaborate with other
food providers. The collaboration will deliver freshness of Wawa food, efficiency in the food and
high quality of its products and services. For instance, more collaborations like McLean should
PARTIAL CASE STUDY ANALYSIS 10

ensure maximum service delivery. Collaboration enhances the chances for success in various
markets due to borrowed skills and knowledge from collaborators.

Employee engagement can help Wawa to move fast into the blue ocean strategy. Utilization of
fair processes in including employees in the organization will efficiently deliver quality at
Wawa.
PARTIAL CASE STUDY ANALYSIS 11

References

Avalos Santibañez, K. M., Mendoza Pérez, K. D., Merino Linares, K. R. V., & Vidaurre Ramos,
E. J. (2019). Wawa Store.

Knowles, J., Lynch, P., Baris, R., & Ettenson, R. (2020). As Stores Reopen, Which Customers
Are Most Likely to Return?. MIT Sloan Management Review, 62(1), 1-10.

Olenick, M. (2019). Wawa: Retailing Reinvented Through Blue Ocean Strategy. Routledge.

Parmar, B. L., Freeman, R. E., Harrison, J. S., Wicks, A. C., Purnell, L., & De Colle, S. (2010).
Stakeholder theory: The state of the art. Academy of Management Annals, 4(1), 403-445.

Wilson, C. (2019). Convenience Stores with Gasoline. Increasing Access to Food: A

Comprehensive Report on Food Supply Options, 18.

Wolcott, R. C. (2017). Wawa: Building a New Business Within an Established Firm. Kellogg

School of Management Cases.