Westlake Bowling Lanes Harvard Case Solution & Analysis

Westlake Bowling Lanes Case Study Solution

PESTEL Analysis

Political Forces

The political forces impacting the company includes the US tax rate and the federal policies over alcohol sales.The US tax policy, the firms bears a 35% tax rate which is currently exempted due to the losses but would be imposed in future when the company would generate profits. The regulations to have a licence for selling alcohol have a positive effect on the company by resisting competitors to sale liquor.

Economic Forces

The growing city of Raleigh has several economic factors affecting the company. Due to its high economic growth, most of the companies are looking for Raleigh to shift their operations. The income of the household citizens of Raleigh on average basis is between $50,000 and $100,000 per year, which shows huge purchasing power of the people of the Raleigh.

Social Forces

Social forces affecting the company include the population growth, customer preferences and changing life style of people.The population of Raleigh is growing with a significant percentage of 46.3 percent per year since a decade. The average age of the Raleigh is approximately 32 years and one-third of the population is from 25 to 44 years.

About 50% of the population aging 25 years and older population of the Raleigh have a college or a higher education degree. The data shows the huge acceptability of the entertainment in the market. The restaurants and trendy bars in the Westlake Bowling Lanes make it attractive for the most of the adults in the Raleigh.

Technological Forces

The Westlake Bowling Lanes has an updated technology related to its score system making it attractive for the customers. However, there is no other innovations or the technological advancements has been observed in the industry yet. The companies can introduce other new technologies related to bowling games to enhance the customer experience.

Environmental Forces

Environmental forces do not have a potential impact on the industry’s operations, as the industry is based upon services. The only environmental force that may impact the industry is the fluctuating patterns of energy consumption. However, energy patterns could be shifted to solar projects and other sustainable energy sources to reduce the environmental concerns.

Legal Forces

Legal Forces affecting the company include the regulations regarding the liquor licence etc. The level of influence depends upon the size of the company. Large size minimize the legal forces affecting the operations of the company. The industry constitutes family owned industry reflecting high legal forces. The obedience of laws regarding minimum salary wages, employment laws and the health safety hazards regulations is important for the industry.

Internal Assessment

VRINE Analysis

VRINE analysis can be conducted to analyse the resources, capabilities and competitive advantages of Westlake. Major resources and capabilities of Westlake, which could be a sustainable competitive advantage in the long run for Westlake include its critical location, its experience of over 30 years in business, membership of BPAA, its liquor and food license, presence of few competition and low bargaining power of its suppliers.


The resources and capabilities at Westlake have a great value for the profitable future of the company. The membership of BPAA, liquor and food licence and the long life of business i.e. 30 years, helps the management to extend its operations.

The crucial location of Westlake enables the company to attract more new customers easily and provide it a competitive benefit over its competitors. Low bargaining power of supplier is also helpful in building a competitive advantage of Westlake in the future by reduction in costs and increase in prices.


There are number of resources and capabilities of Westlake which are rare in nature. The company’s long term existence in the industry is rare as most of the bowling companies are new in the industry. The location of the Westlake is also rare. It is only company that is located in downtown that reflects the huge target market for the Westlake Lanes.

Along with it company’s membership at BPAA is also rare in the market. Other competitors in the market do not possess a liquor and a food licence providing the company a rare competitive advantage over its competitors.


Long term life of the business can be imitated only by the entrance of other global competitors in the market. The location in the downtown is also cannot be imitated as the downtown location is too expensive and the newly formed organizations cannot afford such location, as well as there is not much space for building a bowling lane.However, the food and liquor licence and the BPAA membership can be easily imitated by the competitors.


The company’s competitive advantages can be easily exploited, as the company has not changed its strategic business model since its inception. The management at company can enhance their resources and capabilities by better advertising and marketing strategies, utilization of company’s current potential resources and developing employee morale to gain long term financial benefits in terms of increased revenues and profits.

Financial Performance Analysis

Horizontal Analysis

Horizontal Analysis of the financial statements determines the financial performance of the company during 2004 to 2009 by analysing the increase and decrease in each component of both financial statements in comparison with the previous year. It can be seen that the sales has been decreased by approximately 22 percent in year 2009 as compare to 3.5 percent in 2008. The beer sales was increased in year 2008 and 2005, while all the other sales has a declining impact. However a huge fall of 34 percent observed in the beer sales of the year 2009.

The costs of the sales are observed to be at a declining rate in year 2009 by 43.42 percent, however this decrease doesn’t much affect the gross profit to increase. The gross profit is observed to be decreasing with a 14.66 percent in 2009. The expenses are also declining with 8.86 percent. The operating income is also decreasing by 101.32 percent.

In Horizontal analysis of balance sheet, the total assets are decreasing by 11.73 percent in 2009 as compare to 2008. However, the inventory is observed to be increased by 42.71 percent, from $2,943 to $4,200 in year 2099 from year 2008. The cash and PPE are decreasing with a percentage of 69.47 and 3.3 percent in year 2009. The Total liabilities are increased by 28.67 percent in year 2009 as compared to year 2008. The increase in total liabilities reflects the decrease in shareholders’ equity by 61.71 percent...........


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