Inroduction:
The Pub, which was officially known as Tantramarsh Club, was made by Mount Allison University (Mount A. University).Theclub was operating in different sorts of activities and was providing different services, which include the DJ, Dance Floor, Bar area, Liqueur and special services like dance parties and DJ functions on weekends and special events.
The pub was also offering different typesof deals such as yearly membership, monthly membership and golden membership. The Pub experienced a significant growth in profit recently;however it was facing difficulties as per the changing in environment and needs of its customers. Moreover, the Pub’s target market included the students, faculty members and other stakeholders at the Mount A. University.
The problems, which the business was facing, include intense competition, changing preferences of the students and financial crises. However, the management was trying to overcome these challenges and considering the alternativesbut it still failed to overcome the difficulties. This paper will provide the alternative actions thatare required or suggested to the management, which are necessary for the management to overcome the present situation.
Part 1
Root Cause Analysis
Financial Problems
As far as the financial crisis is concerned, the main issues will be highlighted in this section. The first problem is that the government increased the minimum wage per employee and the government also refused to give health and liability insurance coverage, which wasincreasing the cost of the Pub. The sales werealso declining because of the increased competition and low promotional strategies, since the pub is restricted to promote the use of alcohol.
On the other hand, the pub is going to be bankrupt if it doesn’t take loan from the university thatis more than 100,000$,which will also increase its cost of capital. Moreover, the pub’s BODs are heavily relying on the inefficient staffs who are students in majority having no or less managerial expertise and experience. However,there are some unfavorable economic indicators which are also threatening the company to operate its business effectively, which includes health and money conscious people, high insurance cost, declining usage of alcohol beverages, rising minimum wage of workers and declining student population.
Pubs Relation with the University
The Pubwas a separate entity and it was notoperating its businessat arm’s length, however the pub was in discretion of the university and the university was able to terminate the lease of the pub if the management did notlisten to the university’s management. The university restricted the pub to invest in its new accessories such as tables, chairs and other bar appliances to make the experience better than ever. Moreover, the university was also neglecting the needs of the pub and other requirements, which were necessary for it to stay competent and profitable.
Determinants of the new location
The main problem with the new location was to wait in a long line for entry.Moreover,the capacity is restricted to 300 guests, which wasimpossible for the new location to cope up. However, the weekend dance parties accounted for almost 80 to 90% of the revenue but the pub would beunable to provide that much space to fulfill the requirements of the weekend parties and it has to rent out some more space which will increase its cost and decline its profits.................
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