Westlake Lanes: How this business can be saved? Harvard Case Solution & Analysis

Westlake Lanes: How this business can be saved? Case Study Solution

Problem Identification

The core issues of the company are the declining revenues, and increasing costs of doing business. There are many reasons behind declining revenues, and increasing costs such as the competition in the entertainment industry was increasing that contributed to less popularity of the company in the market. Similarly, the sudden death of the owner enabled the board members to emphasise on the liquidation of assets to get back their investment.

This intention of the board members caused them to make poor decisions in the business.As there was no on-site manager that could take care of the daily operations at Westlake, the employees felt uncontrolled, and independent, and no-one was monitoring the expenses or planning for the financial budget, and creating strategies to boost up revenues, and make some necessary changes to the current flow of work in Westlake.

Communication in the company was just lost, and employees had no responsibility regarding any work they performed. For most of the time, employees were reading magazines and were busy with their mobile phones during the work hours. There was no effective formal communication between the employees and the board. The problem was not the employees, but was lack of communication, absence of power authority or the on-site manager who could make decisions, provide directions to the employees.

Apart from that problems existed from leadership level to the managerial level. Effective communication is the key to success for any organisation. Meanwhile, there were many challenges and issues that existed within the organisation need to be looked in depth from beginning to end.

Industry Analysis

Porter’s Five Forces

Bargaining Power of Supplier

The bargaining power of supplier is low since there are multiple suppliers in Westlake Lanes for food and beverages, equipment, and shoes. It can be determined that supplier could not have the power to manipulate the prices that could have an impact on the company as the company could get another supplier easily in the market. So, this is an advantage for the company that it could renegotiate the suppliers over the prices to benefit from the economies of scale, and competition in the industry to be more cost effective.

Bargaining Power of Buyer

The bargaining power of the buyers is high in the entertainment industry. Since customers could be a source of competition in the market. Because the customers in the market are price sensitive so if the company changes the prices of the services so a dramatic change in the declining of customers might be seen. Therefore, it can be determined that buyers into the entertainment industry have high power to manipulate the prices, and force company to decrease the prices as well.

Threat of New Entrant

The threat of new entrant in Westlake Lanes is low, because the Westlake Bowling Lanes is the only entertainment club that is located in the Downtown Raleigh near to the residential areas, and restaurants. Since it is located at the prime location, so the threat of substitute is low. Also, the company has been operating in that area for around 30 years, and this is a competitive advantage for the company.

Threat of Substitute

The threat of substitute is moderate in the industry. As the customers have many alternatives to choose from the entertainment industry such as rock-climbing clubs, race clubs, and many other sites for entertainment could pose a direct or indirect threat as a substitute to the company. So, it can be determined that company has a moderate threat of substitute given that customers who have a passion for the bowling would not switch to rock-climbing.

Rivalry

The extent of competition in the market is low for the company since there are no bowling clubs near to Westlake lanes, but there many other alternatives available for the customers that could pose an indirect threat to the company. Therefore, it can be determined that company has the extent of competition into the market because it has no direct competitor in its area.

Westlake Lanes How this business can be saved Harvard Case Solution & Analysis

 

 

Conclusion

The company has been operating into Westlake for 30 years.It has been operating into the most attractive industry, and it also has the potential to grow, and expand given that it has competitive advantage as it has posed entry barriers for the new entrants because it has a good customer base in the market.Although, there are other alternative substitutes for customers in the industry, they are not a direct threat to the company. However, it is another concern that customer is price sensitive. So, it can be concluded that the company has no significant threat except price sensitive customers that it could mitigate by formulating customer oriented strategies to satisfy the customers.....................

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