West Lakes

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Individual Case
Westlake Lanes

Table of Contents

Key Issues ………………………………………………………………………………………2

External Analysis ………………………………………………………………………………2

Internal Analysis …………………………………………………………………………........3

Financial Analysis ……………………………………………………………………….….…4

Alternatives …………………………………………………………………….………………5

Recommendations ……………………………………………………………………………..6

Implementation ………………………………………………………………………………..6

Contingency Plan………………………………………………………………………..…….7

Appendix ……………………………………………………………………………….……...8

Key Issues

There are currently several problems that are affecting Westlake Lanes. The biggest issue that the company must overcome is that it has yet to make a profit in the past two years. With new manager Shelby Givens in charge the company has seen great improvements and was finally able to generate earnings this past month, yet there is fear that it will not be enough to keep the business running.

A second issue the company is currently facing is the $100,000 personal loan founder Dane Sugar (Shelby’s grandfather) gave to the company for renovations in 2008. In addition to the loan the company is facing severe financial problems such incurring bills which have been unpaid, and that the company’s current payables are at 50% higher than Shelby and the board expected. The board of directors of Westlake Lanes must decided whether or not to keep the business running as is, or to change the direction of operation by renovating the facilities and lastly to sell the business altogether.

External Analysis

To determine whether or not the company will be able to sustain and grow the in current market field there needs to be an external analysis. Porter’s 5 Forces Model will help the company determine if staying in business will favorable choice for Westlake Lanes or whether it be best to find another alternative.

Competitive Rivalry
Presently the United States holds the largest market niche in bowlers of about 70% of the entire industry with annual profits of $7 billion. The bowling industry is highly fragmented by only having a small number of bowling alleys in each state. Recently there has been a decrease in the market, due to the fact that bowling alleys and the leagues that they hold have been decreasing since the 1980’s. There are two markets for bowling one that focuses on children under the age of 16 which holds 15%, while the second focuses on urbanites targets individuals 21-35 years of age which makes up 52%.

Threat of New Entrants
As of now it would be extremely easy for another competitor to enter the industry because of the target markets. High costs are usually associated with the technology involved in running bowling allies such as; the scoring systems, lane maintenance. These costs may be alleviated because of the life expectancy of the technology which is 30 years, but with the decrease of the industry it would not be worthy in devour.

Buyer Power
Like in every market the consumer always has the power, if they are not interested in the product an industry is producing then they will look for alternative, or if a current industry’s product are not up to the level they expect they will go elsewhere. At the current moment there are three other bowling alleys that operate within the towns surrounding Westlake Lanes. If Westlake is not complying with customer needs then they are more than able to go to another bowling alley, unless Westlake is able to supply them with certain incentives such as; coupons, discounts and special offers.

Supplier Power
Suppliers are very important for a business to operate. The volumes in which suppliers operate (volume size of stock) vary from low to high ranges depending on how available and ready they are. Westlake has already put in place to reduce supplier costs while still able to maintain the same business standards, by cutting costs in electricity with government rebates and purchasing all the cleaning...
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