Introduction:
Shelby Givens is the new general manager of Westlake Bowling Lanes in Raleigh, North Carolina. Over her one-year tenure as general manager, she has instituted a number of changes that has reduced costs and increased revenues. However, it will not be able to repay the board’s loan and the future viability of the business is uncertain in its current state. A decision has to be made on the future direction of Westlake Lanes.
Key Issues:
The key issues facing Shelby and management are as follows:
1. Shelby has to decide whether she wants to continue in her role at Westlake or find a suitable replacement.
2. If she decides to stay there are two choices she needs to make:
a. Turn Westlake into a family-orientated bowling and entertainment …show more content…
The buying power of customers is medium, there are only three other bowling alleys in a city of 400,000 to choose from. However, there is low switching costs and a lack of differentiation between them. The 20% price increase implemented by Westlake resulted in a drop of attendance around 10%, this shows that buyers are price sensitive and they have other options available to them.
Supplier Power – Low. Westlake has the option of choosing from a number of different suppliers and vendors and can get competitive rates. There are a number of potential food and drink vendors close to Westlake to choose from and there is low switching costs.
Threat of New Entrants – Medium. There is room for and no barriers from preventing another bowling alley opening in Raleigh. However, it is unlikely that another bowling alley could be accommodated downtown close to Westlake. That said, Westlake could face new entrants in the form of other entertainment venues downtown.
Threat of Substitutes – High. Due to the location of the business, there are a number of other entertainment options in an immediate area. These businesses although different in nature, compete for the same customers. Additionally, they compete with other venues to host events like birthday …show more content…
A significant investment is required for this option and the trend may not last long enough to make a return on the investment. Several upscale bars and restaurants have opened and had success but questions arise if a bowling alley would have the same success and attract repeat customers.
This alternative has the potential to bring in considerable profits and a good ROI for Westlake. With profit percentages of 15, 7.5, and 2, Westlake would expect to earn profits of $360,000, $180,000 and $48,000 respectively. The expected profits would more than double, what the kid-friendly option would return. However, due to the high investment cost this option is more risky and does not offer as good of a return as the kid option. In the worst-case scenario, the amount of years it would take to break even is five years longer in this option. See Appendix
Shelby Givens is the new general manager of Westlake Bowling Lanes in Raleigh, North Carolina. Over her one-year tenure as general manager, she has instituted a number of changes that has reduced costs and increased revenues. However, it will not be able to repay the board’s loan and the future viability of the business is uncertain in its current state. A decision has to be made on the future direction of Westlake Lanes.
Key Issues:
The key issues facing Shelby and management are as follows:
1. Shelby has to decide whether she wants to continue in her role at Westlake or find a suitable replacement.
2. If she decides to stay there are two choices she needs to make:
a. Turn Westlake into a family-orientated bowling and entertainment …show more content…
The buying power of customers is medium, there are only three other bowling alleys in a city of 400,000 to choose from. However, there is low switching costs and a lack of differentiation between them. The 20% price increase implemented by Westlake resulted in a drop of attendance around 10%, this shows that buyers are price sensitive and they have other options available to them.
Supplier Power – Low. Westlake has the option of choosing from a number of different suppliers and vendors and can get competitive rates. There are a number of potential food and drink vendors close to Westlake to choose from and there is low switching costs.
Threat of New Entrants – Medium. There is room for and no barriers from preventing another bowling alley opening in Raleigh. However, it is unlikely that another bowling alley could be accommodated downtown close to Westlake. That said, Westlake could face new entrants in the form of other entertainment venues downtown.
Threat of Substitutes – High. Due to the location of the business, there are a number of other entertainment options in an immediate area. These businesses although different in nature, compete for the same customers. Additionally, they compete with other venues to host events like birthday …show more content…
A significant investment is required for this option and the trend may not last long enough to make a return on the investment. Several upscale bars and restaurants have opened and had success but questions arise if a bowling alley would have the same success and attract repeat customers.
This alternative has the potential to bring in considerable profits and a good ROI for Westlake. With profit percentages of 15, 7.5, and 2, Westlake would expect to earn profits of $360,000, $180,000 and $48,000 respectively. The expected profits would more than double, what the kid-friendly option would return. However, due to the high investment cost this option is more risky and does not offer as good of a return as the kid option. In the worst-case scenario, the amount of years it would take to break even is five years longer in this option. See Appendix