Final- Company Analysis for BUS 4999

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Company Analysis for BUS 4999
Team Members:
Zane Gallman
Ambre Franc
Joel Brown
Julieanna Rosa

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TABLE OF CONTENTS
SUMMARY OF THE COMPANY Page 3
KEY PERSONAL Page 5
ORGANIZATIONALSTRUCTURE Page 8
MISSION,GOALS AND OBJECTIVES Page 9
ORGANIZATIONALCULTURE AND LEADERSHIP Page 11
CURRENT STRATEGIES Page 12
INDUSTRY/COMPETITION Page 17
MARKETING AUDIT Page 19
FINANCIALREVIEW Page 22
ANALYSISOFMODELS Page 29
SWOT Page 29
FOUR FACTORSOF THE COMPETITIVENESSENVIRONMENT Page 35
PORTER’SFIVE FORCES Page 39
BCG MATRIX Page 41
ABEL’S STRATEGY OF DEVELOPMENTAND EVOLUTION Page 42
HOFER’SMARKET LIFE CYCLE Page 43
PRODUCT LIFE CYCLE Page 44
HALL’S COMPETITIVENESS Page 45
VALUE CHAIN ANALYSIS Page 46
MCKINSEY’S7S Page 47
STRATEGY OPTIONS FOR DOMESTIC V. GLOBAL COMPETITION Page 49
HUSSEY’S DIRECTIONAL POLICY MATRIX Page 50
PORTER’S DYNAMIC DIAMOND Page 51
MAIN PROBLEMS AND ALTERNATIVE STRATEGIES Page 52
WHO, WHEN ANDHOW Page 54
FINALCHOICES Page 55
APPENDICES Page 56

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SUMMARY
TravelCenters of America (TA) is one of the largest full-service travel centers in the
United-States. Their main Customers are mainly professional truck drivers but they also serve
regular high way customers as well. As of November 2015, TA has over 254 locations. Although
stores are concentrated on the East Coast, TA has stores all over the U.S. and few stores in
Canada. TA’s current headquarters is located in Westlake, Ohio. TA operates in the specialty
retail travel service industry, against rivals like Love’s Travel Stops & Country Stores and Pilot
Flying J. The company is traded on the New-York Stock Exchange (NYSE).
Historic
Phil Saunders founded the company in 1972, they were originally called Truck stops of
America. Until the 1990s, the company changed owners frequently. In 1993 The Clipper Group
bought Truck stops of America which then merged with the National Auto/Truck Stop chain in
1997. Following that merge, the company’s name changed to TravelCenters of America.
Since 1997, TA has been in the process of buying new Travel Stops across the U.S. and in the
early 2000s, became international after the acquisition of truck stops locations in Ontario,
Canada. In 2007, TA experienced a break through as it acquired one of its direct competitors
Petro Shopping Centers. To this day TA still continues to use the Petro name at the acquired
locations.
Presentation

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TA’s core business functions revolve around fuel and truck repair services. Along with
the fuel and truck repair services Travel Centers of America also operates restaurants,
convenience stores, office centers, financial services centers, laundry and medical services
based on the location. TA is Also publically traded over the NYSE so anyone interested in
investment with the company may purchase their stocks. Over third quarter of 2015, total
revenues were up to 1.5 billion dollars (vs. $2b in 2014). From those revenues, 68% was Fuel,
31% was on non-fuel products/services and 1% was for rent and royalties.

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KEY PERSONAL
Phil Saunder: Creator of TA. In 1972, Phil Saunders created TA under the name Truck shops of
America. He sold the company the same year to Standard Oil of Ohio which would be bought by
BP in 1987, then sold to The Clipper Group in 1993 which changed the name to Travel Center of
America in 1997.
Thomas M. Obrien: Chief executive officer, President, Managing director and Director.
Thomas Obrien has been the Managing Director since 2006 and the President and Chief
Executive Officer since 2007. Mr. Obrien has also been Executive Vice President of Reit
Management & Research since 2008. He was Senior Vice President of RMR prior to that time
since 2006, and he was Vice President prior to that since 1996. Mr. O’Brien was the President
and a Director of RMR Advisors, Inc. and President and Chief Executive Officer of each of the
RMR Funds since their founding beginning in 2003 until 2007. From 2002 through 2003, Mr.
O’Brien served as Executive Vice President of Hospitality Properties Trust, where he had
previously served as Treasurer and Chief Financial Officer since 1996. Prior to 1996 Mr. O’Brien
was a Senior Manager with Arthur Andersen LLP.
Andrew J. Rebholz: Chief Financial Officer, Executive VP, and Treasurer.
Mr. Rebholz Has served his positions with Travel Centers of America since November 2007. Mr.
Rebholz has also served as Senior Vice President of Reit Management & Research LLC, since
November 2007. Previously, Mr. Rebholz served as our Senior Vice President and Controller

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from January 2007 to November 2007, as Vice President and Controller from July 2002 to
January 2007 and as Corporate Controller prior to that time.
Mark R. Young: Executive VP, and General counsel.
Mr. Young is the executive Vice President and General Counsel and has served in this capacity
since August 2007. He has been Senior Vice President of Reit Management & Research LLC, or
RMR, since 2011. From November 2001 through November 2006, Mr. Young was Assistant Vice
President and Associate General Counsel of Reit Management & Research LLC and from
November 2006 through July 2006, Mr. Young was Vice President, Leasing and Associate
General Counsel of RMR. Prior to November 2001, Mr. Young held various positions at CMGI,
Inc., Staples, Inc., Wilmer, Cutler, Pickering, Hale and Dorr LLP and Sullivan & Worcester LLP.
Michael J. Lombardi: Executive VP of sales.
Before joiningTravel Centerof America,Mr. Lombardi worked in the retail marketing division of BP for
over thirteen years as well as working for over seven years with Ford Motor Company in a senior
position in global marketing and customer service. Mr. Lombardi joined Travels Center of America in
2006 as SeniorVice Presidentof Salesthen was promoted to Executive Vice President of Sales in 2007.
Barry A. Richards Executive Vice-President.
Mr. Richards joined TravelCenters of America in 2000 with over 25 years in the food service and
hospitality industries. Since then, Richards has served in numerous operating leadership
capacities. He began his duties for TA as a District Manager in the Southeast part of the
U.S. He quickly ascended into roles of Regional Vice President and Senior Vice President, Food

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Operations. Then in 2009, he was named to his current role as Executive Vice President,
Operations.
(Source for Key Personal: http://www.ta-petro.com/about-us/for-investors/Leadership)

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ORGANIZATIONAL STRUCTURE
The organizational structure for Travel Centers of America is set up full of talented and
proven executives and managers. The current president and CEO Tom Obrien has been in his
position since 2007 and has done a good job with taking the company to where it is today. Tom
Obrien was a big pusher for their acquisition of Petro, which has profited Travel Centers of
America greatly by allowing them to increase their market share along with their locations. The
other top Executives Andrew J. Rebholz, Michael J. Lombardi, Mark R. Young, and Barry A.
Richards all have quality experience in related industries and together they all build a strong top
management team that the company needs to remain successful.

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MISSION, GOALS, AND OBJECTIVES
Mission:
“Refuel. Replenish. Refresh.”
Travel Centers of America’s mission as a company is to service all highway commuters
with the best possible service that can be attained. Travel Centers of America prides themselves
on having the best service facility’s on the roads with a range of services to be offered. By
offering a range of services including everything from restaurants to fill up stations they are
able to provide the consumers with all the necessary needs for their highway travels. With over
30 years of experience, Travel Centers of America has established itself as a leader in the
specialty travel retail industry.
Goals and Objectives:
As of September 30th, 2015 CEO of Travel Centers of America Tom O’Brien stated that
the goals and objectives for the future of company would be growth by acquisition. After
September, TA will purchase more than 150 more Convenience stores to go along with their
250 plus current properties they currently operate. In a conference call in September, CEO Tim
O'Brien explained their growth strategy to investors by stating “The company's growth
strategy rests on three legs: New development, largely of sites the company has been sitting
on; diversifying through convenience stores and internal growth.”
1. New Development: According to Tim O’Brien the CEO of Travel Centers of America, the
company has been sitting on many sites they plan to develop in the upcoming year. By

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integrating these new facilities into Travel Centers of America portfolio, they could
potentially see their largest profit growth in years.
2. Diversifying Through Convenience Stores: Truckers and drivers spent seven percent
more on fuel at Travel Centers of America than any other company in their industry.
While they have a seven percent advantage in fuel purchases the fuel industry is subject
to change based on the growing ecological trends. TA knows they must make the
convenience store aspect of their business larger in order to continue growth. By
investing in more convenience stores and making them a more integral part of their
business along with the fueling they will potentially see growth in profits for the years to
come.
3. Internal Growth: For Travel Centers of America, Internal Growth is something they look
to achieve in the years to come. In regards to internal growth, the company will want to
hire more executives who have more insight into the convenience store aspects of the
business. As stated above for Travel Centers of America to remain profitable they will
have to invest and grow the convenient store aspect of their business. By hiring
executives with insight into the industry they will be able to market, place, and
distribute better in their convenience store sector.

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ORGANIZATIONAL CULTURE AND LEADERSHIP
Travel Centers of America is set up full of talented and proven executives and managers
who pride themselves on having a positive management culture. Many of the executives have
been obtained through the acquisitions of Petro, Reit Management, and their predecessor and
remain around to help provide the company with the best chance to make the acquisitions
work through their expertise. The only problem stated in annual reports from Travel Centers of
America would be the possible lack of cohesion between the executives from the acquisitions.
This is stated to be a possible risk for the company and could end up causing problems in the
long run in regards to culture if they cannot see eye to eye on their plans for the future of the
business.

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CURRENT STRATEGIES
Grand/Corporate:
Travel Centers of America’s current strategy is a growth strategy. Their strategy of
growth is being done via vertical integration and purchasing of new land to open more
convenience stores. Travel Centers of America has taken notice of the recent decline in the
price of oil and has begun to focus on different forms of growth for their company. As stated by
the CEO Tom Obrien “The company's growth strategy rests on three legs: New development,
largely of sites the company has been sitting on; diversifying through convenience stores and
internal growth.”
Business:
TravelCenters of America (TCA) is in the fuel, food, and relaxation business for the long
haul. The company's network of nearly 280 interstate highway travel centers in more than 45
US states and Ontario, Canada, is one of the largest of its kind in North America. Its TCA and
Petro locations provide fuel, fast-food and sit-down restaurants (Country Pride, Buckhorn
Family), convenience stores, and lodging. With professional truck drivers as its main customers,
some outlets also offer "trucker-only" services, such as laundry and shower facilities, TV rooms,
and truck repair. TCA leases 185 of its locations from Hospitality Properties Trust (HPT), its
largest shareholder.

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Functional:
Marketing:
Product
Travel Centers of America locations provide fuel, truck service, fast-food and sit-down
restaurants (Country Pride, Buckhorn Family), convenience stores, and lodging.
Price:
Travel Centers of America has competitive pricing with other companies in their
industry. Whether it be with their convenience store items, fuel, food, or lodging they maintain
a competitive pricing strategy to that of their competitors. They focus on their brand and the
products they offer in order to bring the customer rather than attempting to be a low price
competitor.
Promotion:
Travel Centers of America’s main focus is to continue to grow its brand so it can better
compete within its industry. With the lowering price in fuel, Travel Centers of America has
made its way through hard times by vertical acquisitions and the growing of its brand by
focusing more on updating and expanding their convenience stores while still focusing on their
other services such as fuel. As for promotional strategies to promote their brand Travel Centers
of America focuses on their membership cards, their Road King Family Magazine, and their
roadway Billboards.

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Place:
As of September 2015 Travel Centers of America operates 256 locations in the United
States and Canada. Along with the 256 they currently operate they plan to acquire 150 more
stores in late September to continue to grow their brand. Travel centers of America locates all
of their locations near highways and interstates so that they can service the travelers of the
road and their main consumers which would be truckers.
Finance:
Over the past three years, Travel Centers of America has seen decent growth financially
especially as of 2014 but they also have a good amount of debt. As of last year, Travel Centers
of America’s debt to equity ratio was 45.62 which indicates high risk for investors. Although
they do have a lot of debt, with the Economy rebounding they have found a way to keep their
companies sales growing in a declining fuel industry. For example, In Travel Centers Annual
Financial report for 2014, they reported even with the decrease in gas prices Travel Centers of
America was still able to profit around 19 percent per gallon with that value expected to
increase to 23 cents next year. Travel Centers of America is able to profit more on their fuel due
to directly purchasing their fuel from refiners rather than paying wholesalers which in return
has made them able to profit more.
Operations:
Their operations revolve around obtaining their inventories whether it be fuel, food, or
miscellaneous products through distributors, suppliers, and/or wholesalers who provide the

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best prices and values for Travel Centers of America. Travel Centers of Americas operation
strategy is service focused, in that their inventory items all provide a service for the consumer.
Human Resources:
Travel Centers of America has an up to date and pretty good human resources
department. They have a 24 hour phone number for any questions, comments, or complains as
well as an online report form for those who do not prefer to call. This indicates that Travel
Centers of America wants to hear what the customers or employees have to say and are
interested in the comments, concerns, or good words coming from anyone involved with their
company.
Information:
Travel Centers of America offers many way for you to able to access information about
all aspects of the company whether you are an investor, supplier, renter or simply a customer
of Travel Centers of America. They offer a very in depth company website that offers everything
you would need if you had an interest in any way with Travel Centers of America. For example,
on their website they offer annual reports for viewers to view in order to see all aspects of their
business, even including how they are doing financially. Along with their company website, they
also are a public company leaving their information to be able to be viewed and easily
assessable through many websites such as Morningstar.com or Yahoo financials.

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Management:
The management team for Travel Centers of America is very diverse and full of
executives from within Travel Centers of America and also from the company’s previous
acquisitions of Reit Management and Petro. The management team works together to plan,
organize, lead, and control the Travel Centers of America brand. By keeping previous and
acquiring new mangers from previous acquisitions they are able to operate their business and
help grow a changing and improving brand. Their management might be seen by some as weak
due to possible lack of cohesion between the executives due to the acquisitions but to be able
to continue to succeed the executives will need to work together and be able to make the best
decisions for the future of the company.

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INDUSTRY/COMPETITION
Travel Centers of America operates in the specialty retail travel service industry. Within
their company they offer everything from fuel, truck service, fast-food and sit-down
restaurants, convenience stores, and lodging. The Travel Center industry is a multibillion dollar
industry that is in the mature stage of the industry life cycle. Due to the Industry being in its
mature stage the barriers of entry into the industry would be hard and not recommended due
to the already established companies in the industry already owning most of the industry.
Moreover, I would state that the industry is not competitive due to the high cost of entry into
an already heavily established industry.
In regards to competition, Travel Centers of America’s main competitors are Love’s
Travel Shops & Country Stores and Pilot Travel Centers. Both Love’s Travel Shops & Country
Stores and Pilot Travel Centers are larger than that of Travel Centers of America and have
higher customer bases and profits due to them both having more stores and with that comes
more customers. Travel centers of America had an estimated annual revenue of 7.78 billion
compared to love’s at 22.2 billion and pilot at 33 billion for 2014. Furthermore, Both of their
main competitors are also privately owned companies who are ranked in the top 15 largest
private companies with Pilot Travel Centers ranking in at number 7 and Love’s ranking in at
number 13, while Travel Centers of America ranks in the top 300 public companies. In
comparisons to stores operated Travel Centers of America Operates 256 stores, loves operates

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315 stores, and Pilot operates more than 650 stores. All of these companies operate in North
America. With the industry being so competitive this has lead Travel Centers of America to
ramp of up its purchasing of new locations and development of new locations to further
compete with their two larger competitors.

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MARKETING AUDIT
Objective:
Travel Centers of America’s objective is to focus on increasing the value perception of its
services and brand name. In order to achieve this, Travel Centers of America must provide the
best products, services, and facilities all while continuing to expand their business. This is
evident due to their recent expansions in locations, Upgrades of facilities, and releasing of new
marketing materials.
Target Markets:
Travel Centers of America focuses its marketing strategy on professional truck drivers
and interstate and highway travelers.Travel Centers of America main target market focus however
wouldbe professional truck drivers. They tend to these customers by offering "trucker-only" services,
such as laundry and shower facilities, TV rooms, and truck repair.
While theymainlyfocusontruckdriversastheirmainconsumersthey also do tend very well to
cater for the highway and interstate commuters. They do this by offering a multitude of services
including fuel, fast-food and sit-down restaurants (Country Pride, Buckhorn Family), and
convenience stores. These services help bring the customer back through quality choices and
exceptional service.

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Products:
Travel Centers of America offers a variety of products and services to appeal to every
consumer who choose to shop or stay at their locations. These products and services include
fuel, truck service, fast-food and sit-down restaurants (Country Pride, Buckhorn Family),
convenience stores, and lodging. Each of these products and services appeal to their everyday
consumers and hope to bring joy and happiness to the consumer as they purchase one or more
of their products or services.
Pricing:
Travel Centers of America has a competitive pricing strategy. No matter the product
or service they offer, they maintain a competitive pricing strategy so they can compete directly
with their competitors Love’s and Pilot. They focus on their brand and the products they offer
in order to bring the customer rather than attempting to be a low price competitor. In regards
to gasoline one of their main drivers of capital they have been able to cut cost and compete
better with competitors due to buying their oil and gasoline products right from refineries
rather than wholesalers.
Place:
Travel Centers of America has 256 locations in the United States and Canada. As of
September 2015 they plan to start purchasing and developing around 150 more stores to add
to their already large roster. They locations are all located along interstates and highways so

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that they can cater to their target market of professional truck drivers and interstate and
highway drivers.
Promotion:
Travel Centers of America’s main promotional efforts are to focus on continuing
to grow and expose their brand to their target markets. As for promotional strategies for their
brand Travel Centers of America focuses on their membership cards, their Road King Family
Magazine, and their roadway Billboards. These three types of promotion have tended to work
very well for their business. To better improve promotion for the future Travel Centers may
need to focus on possible sponsorships of athlete and commercials.

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FINANCIAL REVIEW
Liquidity
Current Ratio:
Current Ratio (or the Working Capital ratio) is used by companies to show their ability to
pay the current liabilities that they have, current ratio is helpful because it determines if a
company has a sufficient level of liquidity to pay liabilities during the short term. In theory,
the larger the ratio the more liquid the business will be foreseen to be. The current ratio for
TCA in the years 2012, 2013, and 2014 were 1.39%, 1.55%, and 2.11% respectfully. IF we
were to compare that to the industry average during those consecutive years at 1.55% we
can say that TCA is very efficient with using their assets according to their balance sheet.
Quick Ratio
Quick ratio is used (just as the current ratio is) to measure short term obligations. So if a
quick ratio is high, that potentially means the company is more invested into liquidity. In
the years 2012, 2013, and 2014 TCA had quick ratios of 0.72%, 0.89%, and 1.46%

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respectfully. IF compared to other companies in the Global Specialty Retail industry during
those consecutive years at an average of 0.84%, I’d say TCA has a high quick ratio.
Indicating that they have more liquidity than other companies within the industry.
Liquidity Ratios: B+
Overall: TCA has had an upward trend of growth when analyzing their current and quick
ratios. With high fiscal years in 2013 and 2014, TCA put themselves ahead of the industry
with this rapid growth, allowing them to be a viable competitor in the Global Specialty
Retail Industry. In this case TCA has more cash and cash equivalents, while also achieving
their goal of less liability. That’s the reason why TCA deserves a B+ in this category.
Profitability
Net Profit Margin: Net Profit margin is the measure of dividing Net Profit of the year by
the Net Sales of that same year and multiplying by 100. The net profit margin is used in
determination of the overall success of a business, generally a high net profit margin or one
in excess of 10% is considered to be exceptional in the Global Specialty Retail Industry. In

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2012-2014, TCA’s Net Profit Margin was 0.4%, 0.4%, and 0.75% respectfully compared to
the rest of the industry at 5.4%.
ROI: ROI or Return on Investment is a financial ratio that helps an investor understand
the benefit that will be obtained from investing in such company. If an investment has a
positive ROI while there are no other opportunities within the industry with an even higher
ROI, that investment should be accepted. A higher ROI means that investment gains
compare favorably to investment costs, so to calculate ROI it would be how much you
gained from that investment subtracted by how much it cost you, then divide again by how
much the investment cost you. In 2012-2014 TCA’s ROI reports were 5.63%, 5%, and 5.65%
compared to the industry at 7.9%.
ROE: ROE or Return on Equity is the measurement of a company’s profitability by
dividing Net Income by Shareholder’s Equity. This is a useful number because it calculates
how much profit is created with each dollar of shareholder’s equity. In 2012-2014 the ROE
reports for TCA were 9.58%, 7.83%, and 11.93% compared to the industry average of
23.1%.
GPM: Gross Profit Margin shows the amount a company earns from its sales before it
subtracts the price of selling and administrative expenses. The importance of this is that it
gives a detailed analysis of a company’s pricing structure and how they compare to others
in the industry. In 2012-2014 the Gross Profit Margin numbers for TCA were 13.58%,
14.51%, and 16.95% compared to the industry average of 21.9%.
EBT: EBT or Earnings before Tax is a metric that determines pretax profit margin, but it
isn’t the best source to analyze profit. It is recommended that “By removing tax liabilities,

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investors can use EBT to evaluate a firm's operating performance after eliminating a
variable outside of its control.” TCA’s Earnings before Tax in 2012-2014 were 0.42%, 0.03%,
and 1.23% compared to the industry average of 1.35%.
Operating Margin: Operating margin gives a detailed outlook on how much a company
makes after paying all variable costs that come with production (Operating Income) and
then divide that by how much revenue they made in the fiscal year. An increase in a
company’s operating margin means that they have profitability, and it is improving. Travel
Centers of America had reports of operating margins at 0.52%, 0.27%, and 1.46%
compared to the industry average of 4.69%.
Profitability Ratios: C+
Overall: Surprisingly even though the numbers were mostly single digits and low
percentages this isn’t bad for Travel Centers of America. The reason for this is because in
previous years the industry was rising while TCA was actually in decline and didn’t exactly
have a comparative advantage to combat their low Profitability outlook. Also another
reason for the low Profitability outlook in this case compared to the industry is that TCA
relies heavily upon gas outlook. So with various price changes in gas taking affect, in-
between the years, and elevating the Cost of Goods Sold it made TCA have a lower
Profitability. A way for the company to curve this would be to cut costs and maybe diversify
themselves from being solely a truck stop attraction.

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Activity or Efficiency Ratios
Asset Turnover Ratio: Asset turnover ratio is the metric that presents how much
revenue is being earned for every dollar the company spends when it comes to assets. It
embodies how well a company uses the assets it has to make money. TCA’s Asset Turnover
ratio for 2014 was 5.80%.
Inventory Turnover: Inventory Turnover is the measurement of how well a company is
able to turn its products into cash. So the way to figure this formula would be to take the
Cost of Goods Sold during a period of time and divide that by the inventory that was on
hand during that same period of time. The Inventory Turnover in 2014 for TCA was
34.73%.
Days in Inventory: Days in Inventory is how many days on average a company turns its
inventory into sales. Value of DIO varies from industry and company because of the
multiple factors that it applies to. In general though, a lower DIO is better. DIO for TCA in
2014 was 10.51%.
Accounts Receivable Turnover: Accounts Receivable Turnover is the measure of the
average collection period with sales. The higher a number means the company will make
sales that they have become cash faster. The Accounts Receivable Turnover ratio in 2014
for TCA was 49.3%.

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Overall: I’d give the overall outlook for Travel Centers of America Activity and Efficiency
Ratios a solid B. The reasoning behind this is that you can see that there is a decline in
almost all aspects of the inventory and asset turnover percentages, which is actually good.
But the rise in the amount of days in turnover, and the decline in millions of the Accounts
Receivable Turnover is a cause for concern, when looking at the future output needed to
sustain stability in the company. This is an opportunity for Travel Centers of America during
this time to improve their operating and logistic strategy.
Activity and Efficiency ratios: B
Long-Term Debt to Equity Ratio
Long-Term Debt: Measures the total debt of the company (both short & long-term
obligations that are outstanding) and then divides the total amount with shareholder’s
equity. Basically this number is the difference between liabilities and assets. In summary
this ratio looks at Travel Centers of America’s amount of money remaining for stockholders
once all their debt has been paid off. The more leverage you have the higher the ratio
should be, but in this case Travel Centers of America ended with a ratio of 1.15, since their
company was being aggressive in financing growth with debt. This is after having 3 years of
conservative growth overall in 2012-2014 with showings of 1.07, 1.07, and 1.15
respectfully.

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Overall: Travel Centers of America in this case has a high Long-Term Debt to Equity
Ratio, and in this case (and within this industry) that means they have more leverage. In the
upcoming years, if this trend continues, with them having positive growth in the next few
years, it’s foreseen that they will keep pace with the industry and not have to suffer from
long term debt issues when compared to the industry.
Long Term Debt to Equity Ratio: B+

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ANALYSIS OF MODELS
SWOT
II. Limted
Options
I. Growth
III. Survival IV. Change
Weakness Strengths
Threats
Opportunities

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STRENGTH 
General: TravelCenters of America would be considered as a strong brand as it operates in over
43 states in the United States and also has a few locations in Canada. There are two brand that
operate through this company: TA and Petro. 173 stores operate under the TA brand while 75
operate under the Petro Brand. As of now, the company owns and operates 218 TA & Petro,
and 30 are franchised.
Human Resources: TravelCenters of America is very dedicated to knowing what type of
improvement in their services should be done or whether or not their customers are satisfied
and what’s their position toward other competitive brands. Every year TravelCenters of
America conducts a survey under the name « Voted Best survey » where truck drivers give their
feedback regarding the different type of services that TravelCenters of America proposes and
also what is the best brand between TravelCenters of America and their main competitors. The
company has been doing this survey for over nine years, and the last report was given in
October 2015.
Marketing: TravelCenters of America’s marketing strategy is different from most companies.
Their main way to advertise is by using advertising billboards on the roadways. However,
TravelCenters of America puts a lot of effort into trying to gain their customers loyalty: they
created a membership card that allows customers to get discounted prices on food, gas and
goods. Recently, the company decided to create a journal called RoadKing magazine that
focuses on the truck driver lifestyle with news, stories, tips etc. This year, the company issued
an annual special edition of RoadKing magazine called RoadKing Family magazine that focuses
more on families featuring cooking recipe, games for kids.

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Operation: TravelCenters of America currently has 254 different locations across the United-
States and Canada. Due to an effort to improve operations, TravelCenters of America has
focused on how to lower expenses and improve guest experience. The main difference
between TravelCenters of America and their competition revolves around the wide range of
services that TA offers to its customers. These services include fueling, full service restaurants,
QSR’s, truck service repairs, and travel stores. TA and Petro also propose amenities such as
information centers, banking services, Wi-Fi internet access, video game rooms, laundry areas,
private showers, exercise facilities and also big screen television rooms with comfortable
seating. They are all also open 24 hours a day 365 days a year.
)))In regards to their number one source of revenue their fueling operations, TA & Petro, buys
their gas and diesel products straight from the refineries. By doing this they are able to save a
considerable amount of money due to not having to deal with purchasing their fuels from a
wholesaler.
Management: In order to improve their services, TravelCenters of America’s management
conducted a survey where people would rate every type of service offered by TA to see what
they should better focus on to give their customers better satisfaction. This survey has been
going on for the past nine years and allows the customers to vote on their experiences, who
they felt were the best employees, the stores customer service process, parking lot situations,
fueling times, best restaurants, and how clean the amenities were. In addition, this survey also
asks to compare TA and Petro versus their competitors. This type of survey allows the
management team of TravelCenters of America to clearly understand the want and need of
their customers and to bring satisfaction to their customers.

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Information: Information is a key responsibility for a company regarding the supply chain
importance for both gas and food. As mentioned earlier, the TA’s survey plays a big role
regarding customer satisfaction and this information helps with improving the business as a
whole.
WEAKNESSES
General: TA’s overall business is good. However, the company is operating in the very tangible
market of petroleum. Considering the geopolitical aspect of their main resource, a company like
TA could suffer from a conflict over the petroleum and won’t be able to have any leverage on it
due to it being more of a conflict between the government than the companies (USA, OPEC
etc.)
Marketing: TravelCenters of America and Petro are limited in their marketing plan. Their
marketing plan to attract customers relies mainly on billboards on the roadways to advertise
about the different products that are offered by the company. While they do have a Facebook
page and a twitter account, they do not offer too much optimism in their marketing due to only
containing 12,596 likes on Facebook and 4000 followers on their twitter page.
Operation: TA’s main weakness is that like any company that offers fuel as an item of sale, they
are exposed to price changes and are also effected by the interruption of the supply. Due to
their dependence on suppliers, their operations can be directly affected at any time a shortage
comes or prices raise. Therefore, companies like TA have no real power over their suppliers.

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OPPORTUNITIES
Market environment: TA’s competitive advantage revolves around the quality and the larger
amount of services that they offer. These services not only help them bring in professional truck
drivers, but also families and non-professional drivers. TA must continue to develop and
revolutionize their services over the next few years to keep bringing in more customers. Freight
volumes are also expected to increase by 29% over the next 11 years, which favors more
business for Travel Centers of America. The overall U.S. Economy also keeps growing which can
lead to more travelers on the road which in the end is an economic opportunity for TA.
Economic: the 2015 3rd quarter sales for cars has been one of the best in history the United
States. Meaning that the number of cars in circulation keeps growing, which make more
customers for the industry. Also the increasing freight volumes will be a major economic
opportunity for the industry.
The bigger, the greater is TA’s known strategy. The company keep acquiring competitors
through vertical integration and opening new locations which is the best strategy in order to
grow in the already consolidated truck stop/convenience store industry. The more locations
you have, the more customers you are able to attract.
Socio-cultural: TA is not only a gas station they offer a variety of amenities to their consumer
as explained above. Providing customers with not just fuel but also other unique amenities
allows TA to have an advantage over other competitors. This is a main competitive advantage
for the customers TA is focusing on.

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THREATS
Political-legal environment: the most critical point in the political-legal environment revolves
with the petroleum industry. Political conflicts between the United States and the OPEC
(Organization of Petroleum Exporters Countries) countries have a direct impact of gasoline
prices, which in return affect the whole gas industry. If a real crisis were to occur, like when the
economy collapsed in 2008, companies like Travel Centers of America linked to the petroleum
industry could encounter problems.
Economic: As long as the U.S. Economy continues to recover, the industry should continue to
rise. Nevertheless, the prosperity of the Economy is never a given. The frequency between
crises are getting closer every time. If a new economic crisis should take place over the country,
the businesses will suffer. Therefore, freights volumes should not remain the same and
companies like TAs would lose customers.
Socio-cultural: even if the problem hasn’t shown up yet, the ecological trend could somehow
affect the industry. For example, recent studies revealed that diesel fuel is less ecological than
regular gas. With both types of fuel being bad for the environment, people will continue to
push for different types of sources for fuel. If movements against fossil fuels continue to rise,
companies could struggle from this trend which would affect their directly affect their industry
if they do not change to the new demands of consumers.
Market Environment: As is true with every business, if activity slows, it will get harder to keep
going. In an industry like TA’s, the capital intensity puts some more risk over the business. All of
the processes to run the activity is complex. Supply chain is tough, strategic partnership with
gas supplier is essential in order to offer the best price.

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Four Factors in the Competitive Environment
Macro
 Heavy political/Legal industry (regulations, laws, etc.)
 Must Comply with quality standards due to offering fuel services
 Food hygiene policies regarding the restaurant food services aspect of their business
 Grade: C+

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Economic
 Approximately 178 million gallons of gasoline consumed every day in the United States
(source: Department of Energy)
 Slow and steady expansion in U.S. economic growth
 Freights volumes expected to increase 29% over next 11 years (source: 2015 study by
American Trucking Associations and HIS Global Insight)
 Increases in fuel price
 Grade: B
Sociocultural
 Increase of the number of cars and trucks in circulation
 Grade: B+
Technological
 Ability to offer further services to consumers such as Wi-Fi, Business centers, video
game rooms, fitness facilities etc.
 Grade: B
Ecological
 CO2 emissions causing environmental issues
 Grade: C

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Global
 TA’s truck stop operation is one of only three nationwide truck stop networks in the
U.S.
 Multiple growth avenues: Fuel; C-stores; Truck repair/maintenance; Restaurants;
Alternate sources of fueling energy
 Grade: B
Industry
 Regarding the Porter’s five forces, the overall industry is unattractive considering the
number comptiors and alternatives along with the price of start of being very costly.
 Grade: C
Direct
 TA has a clear scale competitive advantage to smaller companies due to its position in
the market
 Differentiation of TA comes from its large facilities location (2-3x size of average
competitor)
 All of TAs travel centers are at or within ¼ mile of an Interstate Highway exit (likely
impossible to replicate)
 Grade: B+

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Internal
 TA’s Internal strategy is focused on expansion either by opening new locations (for
example: Mars 10, 2015 – opening in Brooklyn) or acquiring competitors through
vertical integration (for example: October 15, 2015 – acquired convenience store in
Western Wisconsin OR last announcement to acquired Quaker Steak & Lube in
November 2015)
 Grade: B

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Intensity ofrivalry
- Large number ofcompetition
- 2 similarcompetitors
- Growth rate offreightvolumes
are expectedto increase by29%
over the next 11years
Threat ofnew entrants
- Relativlylow
- Large mature market
- Well establishedbrand
names
- Capital intensive
- Regulatory andlegal
obstacles
Buyers' bargaining power
- Due to the premiumand
large serviceoffers by TAall
over the U.S., buyers bargain
is not substantial.
Threat ofsubstitutes
- Every gas station accross the
country nearby a highway
- Motel andresttaurants
spread aroundthecountry
- Electricity and hydrogen
providers ina near future
Suppliers' bargaining power
- Fuel marketis directly linked
to the petroleummarket
which fluctuates a lot dueto
geopoliticalissues
Porters Five Forces

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Threat of new entrants: the risk is relatively low for many reasons. First of all, the market is
already mature and highly exploited. A lot of companies have already undertaken the market
and have worked in it for a long time with established brands and networks. Secondly, entering
this market would be very expensive. Not only because of the location and accommodations
but also because of the high level of the working capital required to operate such a business.
Finally, selling a good such as gas is highly regulated and policies around the business are
complex and hard to handle.
Intensity of rivalry: The number of competitors is high. Depending on the state or the area,
different brands and companies are highly implanted. Considering TA, there are two main
competitors: Love’s and Pilot. Although, the business is not expected to experience a recession
leading to suppression of established names in the sector considering growth rate forecast of
freight volumes (29% increase expected over the next 11 years).
Suppliers’ bargaining power: obviously one of the most important characteristics of the
business. As long as petroleum is used to create gasoline, companies like TA are under the
power of manufacturing petroleum companies and petroleum suppliers from all around the
world. Leading to a complex situation followed by geopolitical issues.
Buyers’ bargaining power: With the services provided by TA being the most competitive and
largest in their industry, this variable is not consistent. Also, due to the business itself, location
is one of the keys competitive advantages in the market and TA is perfectly positioned.
Threat of substitutes: every independent gas station in the country is a potential competitor.
Even though TA offers more services, a client looking for gas or other services on the road can

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always have the choice between TA’s and any other service provider. Moreover, independent
motels, restaurants or any place to park in general are all potential substitutes to TA. As long as
trucks and cars are using gas to run, only gas providers can actually compete with the core
source of business for TA. However, considering new technologies and especially, new
resources such as electricity and hydrogen, new substitutes providing those resources could
become new competitors.
BCG Matrix
I would place Travel Centers of America the star section of the BCG matrix. They are
placed in the star section due to their high market growth along with their large market share in
their industry. As of September 2015, Travel Centers of America purchased 150 convenience

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stores to go along with their already 250 plus operational businesses. With these purchases
they were able to obtain the growth needed to better compete with their competitors Love’s
and Pilot travel centers. Travel Centers of America are labeled as a star due to their market
growth along with their market share inside the travel center industry.
ABEL’S STRATEGY OF DEVELOPMENT AND EVOLUTION
In an industry that mainly remains the same, there needs to be some sort of innovation.
The current situation for the truck stop industry is in a decline. The only way to move forward is
to anticipate change, join in and to follow the leaders of the industry which right now would be
their main competitors Pilot Travel Centers and Loves Travel Centers. It is inevitable that there

43 | P a g e
will be a change in the industry that will create more competition between their competitors.
For Travel Centers of America they must continue to put focus in their research and
development so that can develop new technology that will put them ahead of the game. Travel
Centers of America must also look into what their larger competitors are doing and take that
into mind while they continue to grow their business.
Hofer’s Market Life Cycle
As shown in the Hofer’s Market Life Cycle Graph above, we have placed Travel Centers
of America in an above average stage of growth along with their industry being in maturity.
Travel Centers of Americas purchased 150 stores in September of 2015 to go along with their
!
! ! ! !
! ! ! !
! ! ! !
! ! ! !
Strong'
Average''
Weak'
Low'
High'
Introduction' Growth' Maturity'
!
Decline'
!

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already 250 plus stores that are currently operating, this shows growth in the company. In
regards to the industry being mature, Travel Centers of America’s industry has been around for
years and the risk of new competitors catching up is very low.
Product Life Cycle
This model is used to show the growth rate in sales based on competition and stabilization.
The many factors that are involved in the company’s placement lead us to put Travel Centers of
America between growth and maturity on the product life cycle.
Introduction MaturityGrowth Decline
Unit
Sales
Time

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Halls Competitiveness
TravelCenters of America is a leader in their industry and have a certain amount of
differentiation when it comes to competitors in their industry by offering a range of different
products in their centers. They not only provide oil they also offer to their customers the
possibility to eat at a various type of restaurants, Shop at their convenience stores, use their
WIFI free of charge ,and even offer lodging for those who need it. By having key distribution
facilities all over the United-States and over 250 centers, Travel Centers of America is able to

46 | P a g e
deliver their services and products at a low relative delivered cost. Due to all of these factors,
TravelCenters of America falls within the zone of competitive battle and the cost power alley.
Value Chain Analysis
By analyzing Travel Centers of America’s value chain we have come to the conclusions
that their biggest strengths are inbound logistics and outbound logistics. As for their biggest
weaknesses we have determined that marketing and sales is their weakest link in the value
chain. We believe their operations and customers services aspects were strong but could use
some improvement in the future.

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McKinsey’s 7’s
Strategy: Travel Centers of America has a clear cut outlook on future plans, and a lot of that has
to deal with their investment into diversity, Also their strategy is firmly sent because the
company has adequate resources, and revenue that goes into the hundreds of millions. Since its
establishment in 1972 it has always had a strong positive strategic outlook.
Structure: Travel Centers of America uses a hierarchical structure that is led by a CEO with other
officers in different categories underneath. This helps the company not be micromanaged at a
corporate level and maintain efficient management teams. The CEO doesn’t have absolute
control, he still reports to a Board of Directors that helps regulate.
Systems: Travel Centers of America uses Technical and Human Resource systems to help
promote an active relationship between company and consumer. TCA utilizes technical systems
by encouraging the use of clean fuel at all stations, since 25% of its gross profit is from gas.

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Style: Travel Centers of America uses a central figure CEO and various Senior Vice Presidents
within its different categories of the broad ranging travel center business. Such as Sales,
Environmental Maintenance and Operations which are all essentials, but needed to be headed
by various individuals who have more expertise than one central figure with absolute control.
Equally sharing leadership but still showing qualities of Corporate Business Responsibility, with
strong Corporate Social Responsibility.
Staff-Travel Centers of America uses employee recognition as an incentive, but there is a huge
difference (basically a cultural split) when you compare corporate to store. Micromanagement
is what is used, as a manager is placed at every location with staff reporting directly to the
manager only. Travel Centers makes sure representation is always positive of their company
with seminars conducted regularly to implement the idea in the employee’s daily activities.
Shared Values- TCA has more of an emphasis on employee satisfaction along with customer
satisfaction. Travel Centers of America used their buyout of Petro to prove they are socially
responsible, because they made sure to not destroy and rebuild and used what was previously
there and kept Petro’s name so as not to deter potential customers because there was “new
ownership”. Now that they’re the largest full service/stop travel centers in North America they
went to make it known they’re loyal not only to the people but the environment.
Skills- Again in reference to the difference between corporate headquarters and store locations
is the difference in their actual responsibilities when related to skill. While the stores operate to
bring income through activities they’re trained for, the corporate level uses highly qualified and

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degreed individuals to expand operations domestically. However at the store level education
assistance is offered, so skills can be expanded further with teaching.
Strategy Options for Domestic v. Global Competition
Defender- Take advantage of Domestic stability due to the growing car market in the
United States, Travel Centers of America can appeal to various consumers instead of specifically
truck drivers. While fuel consumption is a large part of business, the other amenities that Travel
Centers of America offers also are extremely important to the business objective. Due to this
there is little doubt that TCA belongs in the defender strategy. TCA needs diversify product and
not be so focused on gas but broaden their horizon to other fuel resources like electric car plug
ins and ethanol stations. This would help expand business to those traveling that have those
types of vehicles and in return gain the business more money in the long run. The restaurant
aspect of the business is a step in the right direction, also the expansion of business
domestically through the acquisition of pre-existing business helps Travel Centers of America to
grow at a steady pace.

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Hussey’s Directional Policy Matrix
Generate Cash
Basedon Travel Centersof America’sprofitabilityportfolio,itwasdetermined that the industry
ismoderatelyattractive,becausethe companyhasalreadyestablisheditself as a mainstay in the Global
Service Retail Industry. Selective Growth by the leadership and Gas Price Fluctuations will have future
effectson this business, however with the revenue trend proving a steady rise in the last half-decade
(showingpositive growth) becauseof these acquisitions,itseemsthatTravel Centers of America should
keep to the path they’re on.

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Porter’s Dynamic Diamond
Above is our Analysis of Travel Centers of America in context to Porters Dynamic
Diamond model.

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MAIN PROBLEMS AND ALTERNATIVE STRATEGIES
After further analysis of Travel Centers of America we’ve come to the realization that
they have a few problems that need to be corrected to continue the company’s success and
growth.
Problem 1: America is getting more ecological
Alternative Strategy: For the future of their business, TA could be the first major Travel center
to initiate new sources of more ecological energies such as electric fueling stations.
Pros: Travel Center of America would be able to gain the first mover advantage into this type of
market. This would attract more customers to their company and in return generate more
profits in the long term. Furthermore, charging ones car only costs 540$ on your electricity bill
every (average number) year which would be substantially cheaper than purchasing gasoline.
Cons: Implementing this strategy would be very costly at first but in the long term with the
growing ecological trends could generate great profits. For example, right now buying an
electrical charger is expensive, a regular car charger price is between 500$ and 1000$.
Problem 2: Lack of marketing
Alternative Strategy: Lack of marketing is a big problem for Travel Centers of America. Their
main sources for marketing they services relay strictly on their roadway billboards, loyalty
cards, and their Road King Magazine. An alternative strategy to better improve their marketing
could be through major television commercials and possible sponsorships of athletes.

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Pros: By developing a marketing strategy and advertising more about the company,
TravelCenters of America will be able to attract a larger audience such as regular interstate
drivers, which will generate more profit and will be favorable for the company to keep growing.
Cons: the main con for this strategy would be the cost of developing such a big strategy.
Marketing Strategies are never cheap especially commercials and possible sponsorships so
Travel Centers of America would need to find a way to budget this marketing strategy.

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WHO, WHEN, AND HOW
Our firststrategy of implementingelectrical chargerstoourfacilities would take place between
five totenyears and we would acquire a new executive in the electronics industry to help with all the
aspects of the implementation of this strategy. For the first couple years, Travel Centers of America
would only implement these new chargers to the areas of the more prevalent electronic car usage to
track the demandfor theirnewservice.Byusingatrial basis they will not only be able see if customers
will use the service but they will also be able to see where the electronic car industry will go.
The second strategy should be implemented as soon as possible, and would be initiated by
hiringa marketingfirm toproduce theirtelevisionadvertisementsandsearch for possible athletes who
couldrepresenttheircompanyinthe rightway.TravelCenters of America wants to keep growing along
withgainingmore profitsandbyimplementingabettermarketingplantheywill be able to growth they
want to achieve.

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FINAL CHOICES
For growth to continue for Travel Centers of America they must anticipate the future
trends and initiate a strategy to market and produce these trends. By America, and the rest of
the world becoming more ecological Travel Centers of America should focus on this growing
market by adding electrical chargers to their travel centers to focus on the growing market of
electrical car users.
Travel Centers of America should also ramp up their marketing strategies for their
services and locations if they want to continue to grow their customer base. Their current
strategy is very limited and increasing their advertising avenues may cost them a lot at first, in
the future they could benefit greatly.

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APPENDICES
Financial Ratios
Liquidity
Company(2012) Company(2012) Company(2012) Industry (2014)
Current Ratio 1.39% 1.55% 2.11% 1.56%
Quick Ratio 1.72% 0.89% 1.46% 0.84%
Debt to equity Ratio .99 1.00 1.09 113.51
Profitability
Activity and Efficiency Ratios
Long Term Debt to Equity Ratio

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Financial Highlights (10K)

Final- Company Analysis for BUS 4999

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