Brief History
Like nearly all merchants, Wawa felt the pain of limited consumer spending as the financial crisis of 2008 progressed. Companies were actively copying Wawa’s products in reaction to the recession. Faster pumps with shorter lines and did not charge credit card fees became increasingly prevalent. Stoeckel summoned top management to evaluate the company plan in 2009 before the competition caught up (Olenick et al., 2018). He glanced around the marketplace and noticed that Wawa’s competitors were merging. Stoeckel responded by handing out popular business books and requesting that CEOs study them with an open mind (Olenick et al., 2018). Senior executives produced a crucial Blue Ocean Strategy analysis to evaluate their present business to produce as-is strategy canvases.
They concluded that the food service sector was the weakest of their three products (food, gasoline, and convenience), but it also had the most room for expansion. Buyers did not trust that a convenience store or gas station could provide high-quality food, but Wawa recognized an opportunity to change that with its blue ocean equipment and approach (Olenick et al., 2018). Wawa would transform itself from a convenience store with gas that also sold food to a fast-service restaurant that sold convenience goods and gas to achieve a blue ocean transition.
Transitioning to a fast-service restaurant that also offered a limited variety of items and gasoline necessitated a significant change in the store’s appearance, cuisine, and layout. Wawa was able to prosper by removing features that appeared to be costly but offered little value, like tables and waiters, from its quick-service locations (Olenick et al., 2018). According to the Blue Ocean shift, food freshness and healthfulness had to be developed, and food quality improved. On the other hand, Wawa did not stop there in providing a quantum increase in buyer value. It wanted to pair the improved food offering with cheaper costs, creating a new value-cost frontier that rendered typical quick-service restaurants obsolete.
SWOT and Blue Ocean Strategy
Questioning established market assumptions and limitations and breaking the usual value-cost trade-off by producing new kinds and degrees of value are all part of the transition from market-competing to market-creating movements. The key to reinventing industrial conditions rather than accepting them is to broaden the creative palette and reframe the opportunity (Olenick et al., 2018). This necessitates defining and addressing non-customers. Cognitive (attached to the current quo), motivational (skepticism, hesitancy), resource (limited budget, skill), and political problems are common (tensions, silos, turf wars). The Blue Ocean model’s success is based on a broadened vision, practical tools, and a shift in humanistic culture (Olenick et al., 2018). Employee anxieties and uncertainties must be addressed, and creativity, confidence, dignity, and ownership must be cultivated at the human level. Creating, reviewing, and deploying a Blue Ocean innovation strategy takes years. They will be successful if employees are encouraged to participate in activities spanning from visioning and market research to presentations and feedback on innovation decisions.
SWOT Framework
Strengths:
- The company has an extensive geographical reach, a large client base, and a strong brand identity.
- The company’s focus on continual product development allows it to retain a solid market position while also increasing customer satisfaction.
Weaknesses:
- The company has been hampered by a lack of financial and technological resources, which has hampered its capacity to expand its service both locally and internationally.
Threats:
- Wawa is up against significant competition with worldwide and domestic companies and continually changing show business practices and client preferences. As a result, the service’s status as a mighty brand name and an essential participant may be jeopardized.
Opportunities:
- Because of the increased internet penetration, businesses may take advantage of this opportunity by creating an engaging digital platform for promoting their products and attracting the most customers.
Recommendation to Protect and Expand Blue Ocean
The authors have devised a five-step process and tools for implementing Blue Ocean plans. Begin by determining if the organization is a pioneer (value creation), a migrator (value enhancement), or a settler (value imitation), as well as what your business position will be following the new changes (Olenick et al., 2018). Even with significant investment in R&D, many businesses are unable to develop the novel value that customers will pay for and hence compete as settlers. Companies must achieve a balance between profitable, established items and investing in future bets due to innovation. An influential, trustworthy, sympathetic, and action-oriented leader must conduct this cross-organizational strategic dialogue.
Wawa has always relied on innovation in business methods to keep afloat in the blue ocean. Blue ocean’s methods have helped the company grow from a convenience store to a leading brand in rapid meal service. Collaboration with other food producers to reduce costs and increase profits—after all, Wawa aimed for the freshest, highest-quality, most flavorful food at a reasonable price (Olenick et al., 2018). Wawa has partnered with McLane to offer convenience store products, Taylor Farms to give fresh salads, Safeway Group to supply pre-made dishes, and Amoroso Bakery to supply bread. This cooperation aided the company’s cost-cutting efforts. Thus, the company should adhere to the innovation strategy that allowed it to make the first transition. In addition, long-term cooperation with other companies will reduce the cost of certain services and attract new customers.
Action plan
Value drivers
The Blue Ocean Approach is a hybrid strategy that aims for both distinction and low cost at the same time. This mix guarantees that innovation is technology-driven, futuristic, and grounded in what customers care about. Because many goods offer a variety of functionalities that customers do not value or utilize, value innovation does not have to be a technological improvement.
Implement value innovation
Customers derive value from an offering’s utility minus its price while building new markets. Similarly, the value provided for the organization equals the offering’s price less its cost. Value innovation is realized only when the entire system of usefulness, price, and cost is matched.
Eliminate factors taken for granted
Examine what characteristics the market expects to be included in the product or service but are not required and do not provide much value. The company can save money by removing non-essential and extraneous elements from the offering that do not value the client.
Reduce factors below the current standard
It is critical to cut features considerably below industry standards to save money. The market may still require these qualities, but not to the extent that they are now available.
Raise factors that are currently not meeting market desires
Raise variables much above industry averages to eliminate the trade-offs that current alternatives require customers to make.
Create factors never offered
Create features that have never been available before and would be extremely valuable. The implementation of additional offers will attract new customers for whom the business products were not previously available.
References
Olenick, M., Chan Kim, W., & Mauborgne, R. (2018). WAWA: Retailing reinvented through blue ocean strategy. INSEAD.