Gaga for Wawa: Blue Ocean Retailing

Author(s): KIM, W. Chan, MAUBORGNE, Renée, OLENICK, Michael

Summary:

Customers are gaga for Wawa, the restaurant / convenience store / gas station that inspires people to tattoo the firm’s logo. Founded in 1803, the company morphed over time from an iron foundry to a textile mill, to a dairy farm, dairy delivery business, grocery store, then convenience store. Dark clouds descended with the 2008 financial crisis. As competitors converged on Wawa, management recognized the need for a new direction. After the CEO asked his executives to review a selection of business books, they chose Blue Ocean Strategy to redefine industry boundaries, shifting away from the red ocean of competition to a blue ocean of differentiation and low cost. By 2017 Wawa was the 34th largest private company in the US, with 625 million customers and sales of $10.5 billion. It serves 222 million cups of coffee a year and 105 million hoagie sandwiches. Where the average 7-Eleven convenience store grosses $30,000-$35,000 per week, Wawa averages $116,000. It used Blue Ocean Shift to achieve breakout success and thrive for a decade after its strategic pivot.