CASE: Westlake Lanes: How Can This Business Be Saved? Richard G. Hamermesh
Answers by Ashley Brown
2) What are Shelby's biggest problems? Explain.
The biggest problem Shelby faces is Westlake’s poor financial health. Shelby was placed in a position to tackle a business with declining sales and increasing costs. Investors were not happy with the apparent decline in revenue, which had fallen over 40% over five years. Shelby needs to focus on how to increase revenue while simultaneously cutting cost. Cutting costs is a challenge due to the climbing rate of employee health insurance, maintenance costs, and utilities. There had been an 8% increase in the health insurance premium. Another financial issue she faces is the amount of unpaid invoices …show more content…
By the first quarter of 2010 Givens was able to raise revenues by 6% and decrease costs by 8.5%. The projected net income for 2010 was $20,000, which proved growth. There had not been a profit at Westlake in the past two years. Cutting costs was imperative to Westlake’s survival. Givens was able to decrease health insurance cost by 13% by selecting a different in-network plan. To cut costs, she also changed cleaning services for half the price. Givens also made other changes to lower cost which all impacted the 8.5% decrease in costs.
Westlake also has advantages such as its location in downtown, lively Raleigh. Westlake Lanes has been in business for over 30 years evidencing its customer loyalty and value to the community. Westlake is highly likely to grow more based on its demographics. Within 10 years the population grew 46.3% to 404,000 with one-third of those earning between $50,000 and $100,000 annually.
Whether the board decides to implement a kid-friendly approach or the upscale lounge approach, Westlake is bound to be successful with the appropriate business strategy in place. The business is profitable and is in a thriving location, a winning
Answers by Ashley Brown
2) What are Shelby's biggest problems? Explain.
The biggest problem Shelby faces is Westlake’s poor financial health. Shelby was placed in a position to tackle a business with declining sales and increasing costs. Investors were not happy with the apparent decline in revenue, which had fallen over 40% over five years. Shelby needs to focus on how to increase revenue while simultaneously cutting cost. Cutting costs is a challenge due to the climbing rate of employee health insurance, maintenance costs, and utilities. There had been an 8% increase in the health insurance premium. Another financial issue she faces is the amount of unpaid invoices …show more content…
By the first quarter of 2010 Givens was able to raise revenues by 6% and decrease costs by 8.5%. The projected net income for 2010 was $20,000, which proved growth. There had not been a profit at Westlake in the past two years. Cutting costs was imperative to Westlake’s survival. Givens was able to decrease health insurance cost by 13% by selecting a different in-network plan. To cut costs, she also changed cleaning services for half the price. Givens also made other changes to lower cost which all impacted the 8.5% decrease in costs.
Westlake also has advantages such as its location in downtown, lively Raleigh. Westlake Lanes has been in business for over 30 years evidencing its customer loyalty and value to the community. Westlake is highly likely to grow more based on its demographics. Within 10 years the population grew 46.3% to 404,000 with one-third of those earning between $50,000 and $100,000 annually.
Whether the board decides to implement a kid-friendly approach or the upscale lounge approach, Westlake is bound to be successful with the appropriate business strategy in place. The business is profitable and is in a thriving location, a winning