|← Why We Need Trickle-Down Economy||The Turning to a Market Economy →|
Wawa food market was established in the 19th century as a retail point for farm products belonging to a single farmer. Throughout the 20th century, Wawa has developed into a large company and has diversified fast food shops. In addition, Wawa deals with gasoline sales at its stores. The company has a chain of stores and shops mainly throughout Philadelphia. Wawa sells some branded products produced by the company itself. The descendants of the founder of the business own the majority of the company’s shares. However, the employees also own a significant portion of shares in the company (Thompson & Price, 2004).
The company is expanding at a high rate, and it is establishing new stores across the United States. It owns more than five hundred stores in the country. The high expansion rate is posing a problem for the management of Wawa. The organization of the chain of stores gives autonomy to the individual managements of the particular stores. Although the stores are subordinated to the central management, the management procedures vary from one locality to another. The differences are caused by the loose and liberal kind of management that Wawa has adopted over the years. Each individual management makes its own decisions on the stocking of the stores and is not controlled by the top management. The lack of control is a problem for Wawa since the central management cannot control or determine the nature and number of particular product units in the store (Thompson & Price, 2004). This poses a problem for the management. If it wishes to provide uniform and quality services in its stores across the country, the company has to structure its management to ensure that each store is dealing with a specific product that fits the market demand. This calls for a comprehensive change in the management methodology to set up a system that can stock the stores with products that match the customers’ demands in the particular and unique localities.
To satisfy the growing customer base of the Wawa food market, the company decided to use services of another company to establish an electronically monitored supply chain. McLane Company keeps the inventories of the Wawa stores. The use of modern software database for the management of Wawa stores’ inventories facilitates the complex duty of overseeing the stocking of the stores. However, a contentious legal issue arises from this partnership as McLane Company has a major control of the company stores’ stocking. The Wawa management cannot oversee the stocking of their stores due to the business bulkiness. This renders the management unable to monitor some aspects of its supply chain. Furthermore, the control of the chain of stores is divided between the Wawa Incorporated and McLane Company. Solely McLane Company owns the system that controls the inventories of the Wawa market. There is an obvious concern that McLane Company is in a position to influence the performance of the Wawa Inc., while Wawa Inc. wishes to expand its sales to the international market. McLane Company is considerably concerned over the possible takeover of the company’s operation (Horwitz, 2012). There are several Legal barriers that prevent the Wawa food market from interfering with the MacLean Company operations.
To counter this problem, the Wawa food market has to find a suitable management that can handle the issue of supply. Recruiting more managers into the existing Wawa Incorporated for new supply departments will only complicate the current situation. The international market is a much rougher terrain to operate in because of the distance and the new suppliers that must be inevitably included in the company’s operation. If the Wawa food market incorporates more companies to handle the supplies to their stores, particularly in the international market, it is likely that it will lose the authority over their business operations. A solution that would enable the company to handle its own supplies to the stores must be found for the new market to avert a slow takeover of the company.
The ultimate solution to Wawa Inc’s problems is the establishment of an independent supplies department for the store chain. The supply department can be molded into an autonomous organization that will be a subsidiary of the larger Wawa Inc. It will then be possible to eliminate the need for the company to hire other independent companies to install the electronic systems and software to facilitate accounting in the supplies department. The new company can then acquire its own software for running the food chain supply department rather than having another company control the ownership of the software (Horwitz, 2012).
The implications of another company owning a key asset in the company’s supply sector poses a danger of a catastrophic malfunctioning of the business system if for some reason McLane Company decides to withdraw their services. Enough legal bondage cannot be established to ensure that McLane Company acts in good faith. Moreover, if McLane Company faces a problem such as a financial crisis, it is likely that the company will go down with the systems in the Wawa Incorporated. In addition, if McLane Company owns the whole supply system of the Wawa incorporation’s store, it is then likely that McLane Company will take over the operations of the whole chain of stores. If a company owns a key asset that is of significant importance to another company, then a proportionate corporate influence is obvious. Wawa Inc’s independence as a family business is, thus, threatened (Wawa Inc., 2012). The only solution that Wawa Incorporated can take to avert the eventual takeover of its operations by McLane is to forge its own supply mechanism rather than recruiting more managers. Using the human resource as a tool to control the situation could cause more harm to the company. Therefore, restructuring of the company’s supply system is a more viable option.