Westlake Lanes: How Can This Business Be Saved Spreadsheet Supplement Harvard Case Solution & Analysis

Introduction

The general manager of a bowling alley, Shelby Givens was worried about the current situation of the company. The company is located in downtown Raleigh, North Carolina and was founded by the grandfather of Givens Dane Sugar. The founder of the company himself was an enthusiastic bowler. After the death of the founder, the sales and profitability of the company decreased followed by high cost. By the end of 2008, Westlake Lane was dependent on loans in order to survive in the bowling industry. The new general manager of the company Givens was hired to make the financial and operational condition of the company in a better situation. As of now, Westlake is not in a stable position to pay off the company loans.

Issues identification:

The primary issue faced by the general manager of the company is based on choosing two business alternatives that might help the company to cover the loans and financial crisis. Furthermore, she needs to convince the board members to give her support about the ideas she made to handle the situation. The company is almost near to bankruptcy because of the bad financial position. In addition to this, the employees in the company are not contributing much in terms of productivity. The board members need to decide whether they should accept the proposal given by GM, liquidate in order to pay-off pressing loans or maintain its existing operations.

Analysis:

External analysis:

Porter’s five forces model:

Threat of new entrants in the industry:

The threat of new entrants in the bowling industry is found to be low this is because new companies can easily enter into the market due to the low barriers to entry and low capital investment cost. On the contrary, companies might face hurdles from the location perspective. The Westlake Bowling is located at the main location in the city to target its target market properly as it is the only bowling alley in the town. In addition to this, the company is dominant because of its long standing in the market as the company is a part of the bowling industry for more than 30 years. With this, the company has maintained its brand image and reputation in the market.

Bargaining power of buyers:

The bargaining power of buyers is found to be moderate because of the fact that the demand for the company’s service is elastic in nature. Currently, the sales of the company have dropped dramatically in terms recreational traffic, food & beverages and league participation. Besides that, the overall revenues of the business have fallen not more than by 3%. In addition to this, other activities than bowling ultimately increase the bargaining power of buyers. Individuals below 16 and above 55 comprise of the largest geographical segment and thus, possess a higher bargaining power. Individuals below 16 have a strong bargaining power because of their parents and the individuals above 55 are powerful because of their income levels.

Bargaining power of suppliers:

The bargaining power of suppliers is found to be low as there are many suppliers of the company that includes bowling and shoes equipment providers, drinks and foods providers and many more. If one supplier raises its prices then, the company would not have any issue in switching to another supplier.

Threat of substitutes:

Threat of substitute in the bowling industry is found to be moderate as there are many alternatives available in the market like laser tag, rock climbing centers or sites for parties. These substitutes are not considered as direct ones, and the direct ones do not exist in the market till now.

Degree of competitive rivalry:

Degree of competitive rivalry for Westlake bowling is found to be low as there are no direct competitors in the industry. In addition to this, the degree of competitive rivalry reduced because of the company’s existence in the market for more than 30 years and the level of loyalty from its existing customers.

PEST Analysis:

Political:

The general manager of the company has faced various issues after taking charge of the business as she has to think strategically to bring the company out from the financial crisis. As far as the political situation of the company is concerned, she took advantage of the governmental policy based on rebate of fluorescent lights.............................

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Table 4431 supplement to the case. "Hide
by Richard G. Hamermesh, Alice Zalosh Publication Date: May 03, 2012. Prod. #: 4433-XLS-ENG

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