The key issue faced by general manager Shelby Givens of Westlake Lanes is whether or not to maintain the current practices of the business or seek new alternatives. She must convince the board that within her allotted one year, progress has been made in improving the business and ultimately convince them that profitability is in the foreseeable future and that their personal debt will be repaid.
External Analysis: Porter’s Five Forces Analysis
Threat of new entrants: In regards to ease of entry, there is the possibility of new entrants. However, it is stated in the case that Westlake Lanes has an excellent location in downtown Raleigh and it would be hard for another entry to secure such a location. Also, seeing as Westlake Lanes has been around for over 30 years and has secured loyal recreational and league customers, it would be difficult for a new entrant to gain market share. However, Westlake Lanes has been faced with financial hardship and a new entrant could potentially use this to their advantage although it would be unlikely. Therefore, the threat of new entrants is relatively low.
Threat of substitutes: The threat of substitutes to Westlake Lanes is relatively high. It is stated in the case that Westlake Lanes’ main competition is not other bowling alleys, however a long list of other activities that consumers either find more enjoyable or less costly. Raleigh is one of the ten fastest-growing cities in the United States and therefore has seen large growth with the introduction of new shops, restaurants, etc. Ultimately, these other activities are threats to Westlake Lanes and therefore they face a high threat of substitutes.
Supplier power: Westlake Lanes has many different supplier needs such as food and drinks, health insurance, shoes and bowling equipment. It is made evident in the case that Shelby Givens was able to seek out new suppliers for all of the above needs ultimately reducing costs. Therefore, supplier power is relatively low because while suppliers may raise their costs, it is not difficult for Westlake Lanes to seek out new and cheaper alternatives.
Buyer power: Westlake Lanes is faced with generally high buyer power. As previously mentioned, they are faced with a lot of indirect competition such as other low-cost activities and restaurants. Although they do not have direct competition in regards to other bowling alleys, these other activities ensure that Westlake must keep competitive prices and introduce attractive marketing schemes in order to maintain consistent business.
Degree of rivalry: It is stated in the case that there are other bowling alleys that occupy Raleigh, however Westlake Lanes is the only one in the downtown area. Therefore, there is no direct competition that they face. However, their biggest rivalry would be the vast amount of other low-cost activities and alternatives that have been introduced in the area. Ultimately, Westlake Lanes faces a low degree of rivalry when taking into consideration the bowling industry but it is important to comprehend the impact other activities can have on their business.
External Analysis Summary
All in all, Westlake Lanes does not face any direct rivalry. However, they are faced with indirect competition in the form of other low-cost activities. Furthermore, they are challenged by relatively high buyer power due to the fact that they must maintain low-costs and attractive deals in order to ensure consumers do not just opt for these other attractive activities. They do not face high supplier power seeing as they are able to easily conduct competitive research and opt for the cheapest alternatives. Finally, there is always the threat of new entrants; however Westlake Lanes has secured an excellent location and loyal customer base and the current financial status of this company could deter new entrants.
Internal Analysis: VRINE model
Please join StudyMode to read the full document