LYRIC DINNER THEATER CASE STUDY
Do you think Deborah made a good career decision to take the job of general manager at Lyric?
Can this business be profitable? If not, why not? If yes, what needs to be done to achieve profitability?
What specific actions should Deborah take?
1. Do you think Deborah made a good career decision to take the job of general manager at Lyric? In my opinion, from a career point of view Deborah made a high risk decision by joining Lyric Dinner Theater. She had just completed her MBA from Harvard Business School in June 2009 and had various job opportunities to choose from; including the US office of an Israeli high-technology equipment firm and a major advertising firm in New York. However, due to her family owning a major stake in Lyric Dinner Theater and its business being in a tumultuous state, she got involved in it and joined as the general manager in Sept 2009. It was a very good decision for Lyric that Deborah joined as the general manager. Lyric Dinner Theater was at looking at consistently bad financial performance year after year and was struggling with its finances and payables even after a recent loan. Further, its operations were in a mess, costs were extremely high, employees were de-motivated and incompetent and capacity was under-utilized. Further, the Board of Directors were considering winding up the business if it did not break even or start showing profits in another year. Deborah joining at this stage was a blessing for Lyric Dinner Theater. She brought with her a spate of fresh management inputs and a wide range of actions to improve Lyric Dinner Theater’s business structure, operations, production, sales and marketing functions. But while she was able to contribute to Lyric Dinner Theater’s way of functioning, she was not yet experienced enough to completely tackle all the issues required to successfully turn around a business that is in such a bad situation. Further, she did not have the Dinner Theater industry’s inner knowledge or experience that such a project demands. Even from Lyric’s view point, it would be better if Deborah could have been able to provide her management inputs from outside while bringing in a highly experienced industry manager like Mike Johnson of Tiffany’s Attic to head the business. Analyzing from a solely career point of view, joining Lyric Dinner Theater was a high risk – high reward move for Deborah. If she is still able to turn around the business and make it profitable, it can become a big professional and career achievement to her advantage. However, if she is unable to turn the business around; though she might learn a lot through this experience – it will definitely put her career on a slower track.
2. Can this business be profitable? If not, why not? If yes, what needs to be done to achieve profitability? In my opinion, this business can be profitable. There are a host of factors and statistics that make it seem difficult to succeed in this business segment of Dinner Theaters. These are – * Only about 50 % of dinner theaters are profitable as per the industry analysis given in the case * An extremely high bankruptcy rate of 30% per year exists for the industry on the whole * More and more dinner theaters are shutting down and lesser and lesser new businesses are coming up – in short, the industry is shrinking * The business faces extremely high competition from virtually all other sources of entertainment including sporting events and concerts In spite of these seemingly disastrous industry statistics and insights, the dinner theater business can be extremely profitable if managed properly and by a well-experienced management team. In the case study itself, Firehouse which is functioning in the same business environment is doing well and so is Tiffany’s Attic in Kansas City (due to better management). Further, this business very much seems to be profitable when we prepare the...
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