Hot Chocolate And Tea – Spaces To Be Owned:
Ultimately, I recommend Blue Ocean products and/or services which lead to new lines of businesses and an increased revenue stream.  The hot chocolate niche is ripe for a well-resourced player like Wendy’s.  Although it’s a smaller space than coffee, critically, it is an area that a large player currently does not own.  They could realize a Blue Ocean in this space by developing a variety of high or mid-range quality hot chocolates with an assortment of flavors.  It would be much better in this smaller space rather than having just a tiny piece and no real profile in the large Red Ocean coffee space.  Also, tea is ripe in the U.S. – and is already trending up via smaller regional players throughout this country.  Both hot and iced tea are not yet “owned space” of a major restaurant chain.  Wendy’s could use its considerable resources to move to own this space. 

Where To Go Next - And How?:
Wendy’s should considerably modify its strategy for its coffee offerings – its mid-range and long term prospects blow in the wind of too many macro and competitive factors.  They should be occupying a beverage space that is less crowded, and that is “blue.”  If they look hard enough, they may even find Blue Ocean seas within the fast serve coffee space, but even so, they should gravitate to other beverages like hot chocolate and tea which are wide open nationally.  Then the next question for Wendy’s would be how to leverage its large resources to focus on garnering share from regional and local players.  Think Wal-Mart and small “Ma and Pa” stores in the ‘50s, ‘60s, and ‘70s – that’s enough to go on.  Always remember -  it’s so much better to be in a calm blue bay than a huge and turbulent red ocean.