WAWA: RETAILING REINVENTED

THROUGH BLUE OCEAN STRATEGY

By Group 1
Akhil Chaudhary MBA/05/005
Rahul Sardar MBA/05/035
Lal Ramdina MBA/05/027
Vimal Bijoria MBA/05/050
What can struggling retailers learn from Wawa’s Blue Ocean shift?

■ The increased competition in the market did not deter Wawa to abandon their PODs(Point of
Differentiation) instead it reconstituted the market boundaries to break away from the
competition and open new value-cost frontiers.
■ Wawa’s strategy was counterintuitive which was to deliberately position stores sub-optimally
close to one another whereas traditional stores positioned themselves with ample space between
them to avoid cannibalization and reduction in same-store sales.
■ Wawa’s customer service was another point of difference that it leveraged to build its brand
equity. By fostering and encouraging friendly atmosphere complimented by a high-quality
product, it was able to form a transactional relationship with its customers.
■ Wawa’s blue ocean shift highlights an important point about the strategy that it does not compete
head-to-head rather makes the competition irrelevant. There is a constant effort being made to
distance oneself from its competitors by introducing new, improved and differentiated products to
choose from
As they developed their Blue Ocean shift, how might the tradition
red ocean practice of benchmarking against competition help or hu
Wawa? Why?
Traditional red ocean strategies encompass the Blue ocean strategies focus on the following points:
following points. • Exploring opportunities & spot threats across
■ Focuses on rivals within Strategy & Execution alternative industries.
industry. • Looks across strategic groups within Strategy &
Execution industry.
■ Focuses on competitive position within • Redefines the industry buyer group. It involves
strategic group. redefining the consumer segments..
■ Focuses on better serving the buyer group. • Looks across to complementary product and
service offerings.
■ Core objective is to maximize the value of
• Rethinks or repurpose the functional-emotional
product and service offerings within the
established context. orientation of the Strategy &Execution industry.
• Actively strive to shape external trends over time
■ Strive to improve the price performance
within the functional-emotional orientation
under prevailing norms.
■ Spend energy & resources on adapting to
external trends.
Restaurants, convenience stores, and gas stations are some
of the lowest margin, highest risk business types. Wawa is
all three, but the company is thriving, with record revenue
and profits year after year. Why?
■ Taking advantage of the trust it carried from earlier businesses, it started a clustered model rather than the
franchise model as opted by the competitors.
■ It helped them in building an image in the mind of potential consumers that Wawa stores are everywhere.
■ Wawa’s Blue Ocean aligned value, profit, and people. Its food, non-food items, and fuel are all high-quality
and low cost. The company is exceptionally profitable.
■ Wawa’s people not only write glowing reports about their work environment, even on anonymous internet
bulletin- boards, but can retire with six- and even seven-figure savings due to the employee profit-sharing
plan, which keeps going up in value with Wawa’s passion to break out of red oceans and keep sailing
toward open, blue waters.
 If you were Wawa executive how would you
continue to protect and expand your Blue Ocean?
■ Innovation in business strategies has always been one of the peculiar ways of Wawa to stay in
blue ocean. From serving as convenient store to one of the top brand in quick restaurant service
is good application of blue ocean strategies.
■ Collaboration with other food providers for the cost cutting and profit enhancement- Wawa was
after all, aiming for the freshest, high-quality, delicious food which is reasonably priced. Wawa
has collaboration with McLane for convenience store goods supply, Taylor Farms to provide
fresh salads, Safe way Group for the supply of pre-made foods and Amoroso Bakery for supply
of bread. These collaborations helped the business in reduction of costs.
■ Employees Involvement-Wawa utilized fair process to include the tens of thousands of
employees needed for a successful strategic shift. Employees share the 40% of the company and
they are investing in the long-term success of the company. Employees are treated as the owner
of the business.
■ New Blue ocean shift-Wawa opened a new store in Washington, DC with a new look that
attracted a lot of people. This is largest store of Wawa to date. There is ample indoor and outdoor
seating, free wi-fi with no fuel pumps. Ordering Kiosks still exists because they support cost
reduction strategy of Wawa.
How does each Wawa business line build upon
and reinforce the prior components ?
The business lines they ventured into include:
■ Iron Foundry- Wawa started its innings in 1803, by producing iron stove plates and fire backs. They also
tried their hands in textile business.
■ Diary farm in 1902 where Wood started a processing and delivery facility which takes care of every step
from animal to bottling to homedelivery keeping sanitary conditions and temperature under control.
■ In April 1964, Wawa opened its first food market. This helped them in building an image in the mind of
potential consumers that Wawa stores are everywhere. As competition grew and players started expanding
to supermarkets to survive, Wawa held its nerves and in spite of copying the rivals, it traded down from
small grocery stores to convenience stores.
■ In 1996 company ventured into fuel business, which is more efficient and of high quality. For making a
mark in this field it installed high speed pumps and most importantly eliminated charges for credit cards so
that people get a good price. It helped in making the fuel cheaper.
■ They started a fast delivery restaurant business which provided quick ready to eat food at fuel pumps.
Wawa invested in healthy food items and also started serving hot food items. Wawa also focussed on coffee
which recalls all the varieties.