Westlake Lanes Case Essay

1894 Words Jul 22nd, 2013 8 Pages
Problem Identification Shelby Givens, general manager of Westlake Bowling Lanes has worked over a 9 month period to try and get the company back on its feet. Although Westlake generated its first month of profit in over 2 years, they still weren’t close to paying back the loan from the board members. Shelby has come up with 2 ideas she thinks will revive the business and attract new customers and she is ready to present them to the board. Ultimately, the board members will be the ones to decide if they will support her, or sell the business. Will Shelby be able to convince the board members one of her ideas is worth pursing to save the business from liquidation and generate future revenue?

External Analysis
Porters 5 Forces:
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Buyer Power:
The buyer power is medium, when Shelby increased prices by 20% after no increase in 6 years, league participation dropped by 10%, food and beverages by 19% and recreational traffic by 12%. Shelby felt the increase was necessary and that the losses would be recovered. There are also many other inexpensive food and beverage businesses within walking distance of Westlake, and that had an effect on food and beverage sales at the bowling alley.
Supplier Power:
Pizza is purchased from a food supplier and drives up gross profit margin by 65%, beer is driven up by 77% and soda by 86%. Shelby eventually considered rates from other suppliers and was able to re-negotiate some contracts and cut others that were unnecessary. She also found a new health insurance provider after finding out that their current supplier was increasing rates by 8% every year. She also cut off some existing service providers and used a new cleaning service, instead of a corporate service, which helped in saving costs. Supplier power is fairly low, since there are many other options out there if one supplier isn’t working out.
Degree of Rivalry:
The degree of rivalry is medium. As mentioned before, they do not have much competition from other bowling alleys since they are located in the best area to attract customers. They do however have many other
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