Wawa: Building a New Business Within an Established Firm SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Wawa: Building a New Business Within an Established Firm
Wawa, a $4 billion privately held firm, is arguably the most successful convenience store operator in the United States. Explores how senior management decided to build an entirely new gasoline retailing business within the 100+-year-old firm's core business of high-quality prepared foods and beverages. Charges students with defining the business and organization strategy necessary to "mainstream" the newly proven gasoline retailing concept throughout the company.
Swot Analysis of "Wawa: Building a New Business Within an Established Firm" written by Robert C. Wolcott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wawa Gasoline facing as an external strategic factors. Some of the topics covered in Wawa: Building a New Business Within an Established Firm case study are - Strategic Management Strategies, Entrepreneurship, Innovation, Strategy, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Wawa: Building a New Business Within an Established Firm casestudy better are - – increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, geopolitical disruptions, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Wawa: Building a New Business Within an Established Firm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wawa: Building a New Business Within an Established Firm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wawa Gasoline, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wawa Gasoline operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Wawa: Building a New Business Within an Established Firm can be done for the following purposes –
1. Strategic planning using facts provided in Wawa: Building a New Business Within an Established Firm case study
2. Improving business portfolio management of Wawa Gasoline
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wawa Gasoline
Strengths Wawa: Building a New Business Within an Established Firm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wawa Gasoline in Wawa: Building a New Business Within an Established Firm Harvard Business Review case study are -
Diverse revenue streams
– Wawa Gasoline is present in almost all the verticals within the industry. This has provided firm in Wawa: Building a New Business Within an Established Firm case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Wawa Gasoline are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Wawa Gasoline is one of the most innovative firm in sector. Manager in Wawa: Building a New Business Within an Established Firm Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Wawa Gasoline has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wawa: Building a New Business Within an Established Firm Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Wawa Gasoline has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Wawa: Building a New Business Within an Established Firm HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Wawa Gasoline is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Wawa Gasoline is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wawa: Building a New Business Within an Established Firm Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Wawa Gasoline in the sector have low bargaining power. Wawa: Building a New Business Within an Established Firm has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wawa Gasoline to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Wawa: Building a New Business Within an Established Firm Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Wawa Gasoline has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wawa Gasoline has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Wawa Gasoline has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Innovation & Entrepreneurship field
– Wawa Gasoline is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Wawa Gasoline in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Wawa Gasoline is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Wawa: Building a New Business Within an Established Firm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wawa: Building a New Business Within an Established Firm are -
Capital Spending Reduction
– Even during the low interest decade, Wawa Gasoline has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the segment, Wawa Gasoline needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Wawa Gasoline supply chain. Even after few cautionary changes mentioned in the HBR case study - Wawa: Building a New Business Within an Established Firm, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wawa Gasoline vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert C. Wolcott suggests that, Wawa Gasoline is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Wawa Gasoline has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Wawa Gasoline has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Wawa: Building a New Business Within an Established Firm should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Wawa: Building a New Business Within an Established Firm that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Wawa: Building a New Business Within an Established Firm can leverage the sales team experience to cultivate customer relationships as Wawa Gasoline is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Wawa Gasoline has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Wawa: Building a New Business Within an Established Firm HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Wawa Gasoline has relatively successful track record of launching new products.
Lack of clear differentiation of Wawa Gasoline products
– To increase the profitability and margins on the products, Wawa Gasoline needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Wawa: Building a New Business Within an Established Firm, is just above the industry average. Wawa Gasoline needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Wawa: Building a New Business Within an Established Firm | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Wawa: Building a New Business Within an Established Firm are -
Creating value in data economy
– The success of analytics program of Wawa Gasoline has opened avenues for new revenue streams for the organization in the industry. This can help Wawa Gasoline to build a more holistic ecosystem as suggested in the Wawa: Building a New Business Within an Established Firm case study. Wawa Gasoline can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Wawa Gasoline has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Wawa: Building a New Business Within an Established Firm - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wawa Gasoline to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Wawa Gasoline can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Wawa Gasoline can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Wawa Gasoline can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wawa Gasoline can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Wawa: Building a New Business Within an Established Firm, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Wawa Gasoline can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Wawa Gasoline has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Wawa Gasoline to increase its market reach. Wawa Gasoline will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Wawa Gasoline in the consumer business. Now Wawa Gasoline can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wawa Gasoline can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wawa Gasoline to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Wawa Gasoline to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Wawa Gasoline can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wawa: Building a New Business Within an Established Firm suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Wawa Gasoline to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Wawa: Building a New Business Within an Established Firm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wawa: Building a New Business Within an Established Firm are -
Technology acceleration in Forth Industrial Revolution
– Wawa Gasoline has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Wawa Gasoline needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wawa Gasoline with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Wawa Gasoline demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Wawa: Building a New Business Within an Established Firm, Wawa Gasoline may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Wawa Gasoline needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wawa Gasoline can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Wawa: Building a New Business Within an Established Firm .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Wawa Gasoline.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wawa Gasoline in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Wawa Gasoline high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Wawa Gasoline
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Wawa Gasoline.
Environmental challenges
– Wawa Gasoline needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Wawa Gasoline can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Wawa Gasoline business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Wawa Gasoline in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Wawa: Building a New Business Within an Established Firm Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Wawa: Building a New Business Within an Established Firm needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Wawa: Building a New Business Within an Established Firm is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Wawa: Building a New Business Within an Established Firm is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Wawa: Building a New Business Within an Established Firm is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Wawa Gasoline needs to make to build a sustainable competitive advantage.