Introduction
The following is a proposal for the Wawa Company. This proposal aims to present a compelling case on the international market the company should enter first. Wawa is a chain company that is a convenience store with a gas station that provides goods and services. It is mostly located in few regions in the United States, and over the years, its services have been satisfying. Hence, the company made a good name in the current locations. It seeks to venture more into the international market. The proposal aims to select and analyze an appropriate country to set up its business as in the international market.
France was chosen based on various elements that it possesses, which are favorable for the company. The suitability of this country was based on its location, climate, history, and topography. Moreover, the proposal considers the country’s language, religious influence, customs and traditions, cultural dimensions, and social institutions. Its population growth rate, income distribution, and natural resources provide clear information on how suitable the country is for the start of the business. The paper analyzes the laws, nibbling, and packaging of goods, distribution of labor, tariffs, and intellectual property. It analyzes how Wawa can enter the market and what it needs to focus on to be successfully positioned. According to all the information presented in this study, the possibility is that Wawa can strive in the market or not.
A Cultural And Social Analysis
France, located in Western Europe, has a 551 965 kilometer square with 99.48% of land and 0.52% of water (Lioubimtseva & da Cunha, 2020). France’s climate and geographical location make it suitable for various business activities. Its climate varies from one region to another. In the west, the climate is oceanic. In the north, north-east, and lower Rhode valley, the climate is continental, and the Alps and Pyrenees experience Mediterranean climate and mountain climate.
The terrain is mostly flat with gently rolling hills around the west and north, and it is mountainous while approaching the south. Due to its terrain and climatic conditions, France can participate in various economic activities and is well known for natural resources such as coal, iron ore, uranium, potash, fish, and gold. France is known for various activities such as its influence in fashion with its designer clothing dominating the world market, its fine wines, especially the Champaign and Burgundy. It has an exclusive history of football, French cars, and their exhibit in Europe its Gourmet food, among others. This diverse climate and people in the country make it an ideal location for Wawa. The country’s climate favors the establishment of a convenience store as most of the population is middle class.
France has various religions such as Muslim, Jewish Buddhist, and Christianity, the main religion. The people coexist with French values such as equality, liberty, and fraternity being upheld with the utmost respect. Aside from that, the French Cuisine is outrageous with its cooking recognized worldwide, which creates a platform for Wawa to learn, create a variety, and expand its services and products. French culture allows a light breakfast which typically can drive one to a Wawa fast food or convenience store if there is one (Dallacker et al., 2018). Most French meals are served with appetizers which are convenient to Wawa. The French have a rule of high hygiene and quality services, especially the food sector, which gives Wawa an upper hand. It offers exclusive services and sees towards customer satisfaction.
Over the years since Wawa was established, its main regions and targets have been around the United States with limited access. Expanding Wawa to more countries around the globe would be a big move not only to the company but also to the regions accessing their services. Wawa mainly takes part in convenience stores, fast foods, and gas stations; hence France is preferable since it has a thriving economy and a vast culture in food technology and entertainment. Its history would give Wawa a good position in the market, especially during fashion weeks, car exhibits, and sports events, especially football. The climate distribution in France also makes it suitable for Wawa to thrive in the market.
Comparing France and Pennsylvania, which happens to be the headquarters of Wawa located in the United States, it is most likely to thrive more in France basing on the economic position of both countries. Compared to the few locations that Wawa is located, France’s economy is well developed and free-market-oriented. According to the world economy, it takes the seventh position globally and third in Europe in the economy, making it suitable for Wawa since the services rendered and the products are exclusive.
A Political/Legal/Economic Analysis
France has a high population with about 67 million people on record as of March 2017 in which its growth rate is influenced by immigration (Feng, 2018). Its life expectancy is below 82.2, making it the most populated country in Europe. It has an age structure with 0-14 years at 17.5%, 15-64 years dominating 61.5%, and 65 and above at 21% (Feng, 2018). Unemployment in France ranges mostly between the ages 15 and 24, with the males having an unemployment rate of 21.4% and females 20% (Feng, 2018). Logically, many younger people tend to visit places serving fast foods more than older people. Based on the above analysis, Wawa has a high chance of having many customers in their shops.
Salaries in France are considered to be slightly higher with a median gross payment of around 22000 Euros. Typically, a person may earn 49,500 EUR yearly, which boosts the country’s GDP ranking it as one of the richest countries in the world. Although the statistics of income are appealing, France has an unequal distribution of wealth. It has an average inflation rate of 3.3%, marking it slightly higher than that of the previous years hence recording an increasing inflation rate (de Charsonville et al., 2017). The continued rise of inflation rates will greatly impact the economy if the issue is not addressed in time.
In international trade, France exports vehicles, pharmaceutical products, food products, especially wine electronic components and hydrocarbons, and imports many consumer goods and vehicles. Some of the key businesses in France include Agriculture which traditionally was the primary economic activity before the industrial revolution. France also exports agricultural products globally. In fact, it ranks second after the United States. Massive wheat ranches are located in the country’s northern area, while the country’s southern region is famous for its horticultural products and vineyards. It majorly produces sugar beets and is the biggest supplier in the globe.
It is also the second-largest producer of wine and cheese globally. Western France mainly deals with pork, apples, poultry, and dairy products. France takes part majorly in technology which is another significant element that supports the economy of the country. Due to this, Wawa has a high chance of venturing its business activities technologically and hence fit in the competitive world that is becoming digitized faster. The farms available give an assurance of raw products from the country hence cuts costs on importations of some products.
France ranks as the most technologically advanced country in the world. It has an ideal and sustainable ground for technological research and innovation and sets a firm establishment for more business ventures and opportunities. These conditions have led to the uprising of most of the biggest technology firms in the globe. For instance, Publicis, a company based in France, is ranked as the third-largest firm globally that deals with advertisements.
A large technology park called Sophia Antipolis is ranked as the primary technological center in France. It is located in Valbonne. The hub houses various offices that belong to several big technology firms, such as Orange, Lionbridge, IBM, Intel, Broadcom, Accenture, Cisco, Air France, 3Roam, Avanade, and Amadeus. These technology firms can help Wawa grow by smoothening its business processes such as online delivery and marketing operations.
France is also a popular destination globally and receives almost 100 million tourists each year, which is a good number that boosts the economy and makes it ranked as the fifth globally in tourism. These tourists are potential customers for Wawa, which makes France an excellent location for the company to expand its business. The tourism industry plays a major role as an economic factor in France, with significant impacts on the GDP of the country. A large percentage is from local tourists, while the remaining percentage is the remainder from foreign tourists. Most international tourists who visit France come from Germany.
The tourism industry represents a significant percentage of GDP in the country. The country’s attractiveness to tourists is related to the several attractive tourist attractions situated throughout the country. These tourist spots range from small picturesque rural towns to the country’s capital, Paris. In Paris, people usually visit the Eiffel Tower monument. It is one of the 37 UNESCO World Heritage Sites in France. These tourists are potential customers for Wawa. They also present an opportunity for the business to learn and adopt diverse cultures. Being able to serve people from different countries presents an opportunity for Wawa to include cultural diversity in their business.
The use of French is an obligatory requirement in all regions in the country, whether legal terms of a service or product, a user manual, a presentation, or an offer. Additionally, all receipts and invoices and receipts must be written in French. These measures aim to provide various information, including consumer safety, and it enables a person to purchase and make use of a product or service to have complete information on the product’s nature and warranty. Packaging regulations have various requirements such as the volume and weight of packages should be the minimum necessary, the safety and hygiene requirements, as well as consumer acceptance of the required product. Some of the requirements for labeling are an identity statement, a statement of net weight, the list of ingredients, the company name, and address.
Tariffs are the tax imposed by the government on imports. They have various effects, such as raising the price for consumers, which causes a significant reduction in imports, and can make other countries withdraw, which is not good for the economy. France being a part of the coordinated trade practice of the EU and taking part in exportation and importation, is protected by the EU Taxation and Customs Union. A Common External Tariff (CET) applies to other nations, such as Australia. Following the rules and regulations, Wawa has a chance of venturing its business in France since it is not a new business; hence can support itself in terms of tariffs and other taxes that might be needed.
Proposed Entry Strategy
For Wawa to enter the proposed market, it has to employ some strategies and make some adjustments. It needs to employ a greenfield venture where it launches a new wholly-owned subsidiary. The entry method is effective and comes with advantages such as gaining knowledge of the local market and local employees in the country who are well aware of the dishes served in France. It will allow Wawa to take full control of its foreign endeavors and evade intermediary expenses. There are several advantages that Wawa can acquire from a greenfield market entry. First, the company will have a high level of control over corporate processes.
Also, Wawa will have a high level of quality control over sales and products and services. Greenfield investment will also enable Wawa to have a high level of control over staffing and brand image, which can help maintain the company’s organizational culture. Economies of scope and economies of scale can also be accomplished in terms of production, development, research, and marketing. Greenfield investments also help in avoiding trade restrictions.
Wawa has a chance of growing fast in the country due to its reputation in the already established regions; hence advertising its brand in the media and internet could help market itself. The company needs to export more and participate in direct foreign investment. To wholly expand, it needs to allow licensing and franchising, enabling it to participate in the international market effectively. Methods such as acquisition, exportation, licensing, and franchising will enable it to have a fast entry into the market. Aside from that, it needs to partner and form a strategic alliance with other companies to share the cost and reduce investments and various risks.
Also, the economic policies in France can also make Wawa benefit from tax incentives targeted towards inviting foreign investors. Greenfield investment can also encourage competition in foreign markets. The subsidiary will also get extensive help from the other established businesses, which will help the company grow exponentially. Also, complete control over business operations can help Wawa create positive feelings among customers.
A greenfield investment is also good for Wawa because France has little competition in the convenience store line of business. It also enables the company to tailor its marketing and advertising efforts to the foreign market setting and the development of partnerships with local businesses to upsurge market penetration. Wawa can also install new state-of-the-art techniques and equipment as greenfield investment gives the company a high level of control over business decisions. It also allows Wawa to be flexible to change according to the current situation. Also, the maintenance cost of a new business is relatively lower than the cost of maintaining an existing workshop.
Conclusively, employing these strategies in France will help Wawa pick up fast based on France’s facts, which also wholly participates in the international market and has a good strategic position. France exports and imports a lot, and this could give Wawa a ground for exportation and importation. Since Wawa deals with gas stations and fast foods, it could be a great starting point since France has a great position in technology. It also develops vehicles that are good for the Wawa company in the gas sector. France could be the right place for Wawa to start its journey in the international market.
References
Dallacker, M., Hertwig, R., & Mata, J. (2018). The frequency of family meals and nutritional health in children: a meta-analysis. Obesity Reviews, 19(5), 638-653. Web.
de Charsonville, L., Ferriere, F., & Jardet, C. (2017). MAPI: Model for Analysis and Projection of Inflation in France. SSRN Electronic Journal. Web.
Feng, Y., Lagakos, D., & Rauch, J. E. (2018). Unemployment and development (No. w25171). National bureau of economic research.
Lioubimtseva, E., & da Cunha, C. (2020). Local climate change adaptation plans in the US and France: Comparison and lessons learned in 2007-2017. Urban Climate, 31, 100577. Web.