Westlake Lanes Bowling

Topics: Investment, Revenue, Worst-Case Scenario series Pages: 4 (1130 words) Published: September 13, 2013
Memorandum
To: Shelby Givens (General Manager)
From:
Subject: Westlake Lanes: How can this be saved
Date: March 10th 2010
______________________________________________________________________________ As you know your business Westlake Lanes is currently not performing up to the mark. I think there are a lot of steps we can take for the betterment of the business. There are many problematic issues with the business and I have identified some of the core ones-: •It feels old, no major renovation done in a long time

More machines need to be replaced, maintenance expense is on the rise •Since 2004, Revenues have fallen by 50% and healthy profit five years ago has turned into a loss •Not targeting the right demographics of people aged 21-44 During my analysis, I looked at several scenarios, which included renovating the bowling alley into an urban bowling lounge, converting it into a kid friendly place, keeping the business as it is, or selling the business. In the appendix attached you would see that I have taken 3 cases into consideration for urban bowling lounge and kid friendly bowling alley. •Worst Case Scenario (Low Revenue)

Moderate Scenario (Average Revenue)
Best Case Scenario (High Revenue)
All the assumptions are mentioned in the appendix
Option 1: Urban Lounge/ Bowling Alley
Pros
The Bowling alley already has a liquor license, which is very expensive to attain. Alcohol sales also have a very high gross profit margin as compared to food and beverage. In this alternative our target group will be young professionals in the age group if 21-34, who spend more per person thereby generating higher revenue even with less footfall. By combining a bowling alley and a lounge we are creating a new market, which is currently not present nearby, thereby creating a competitive advantage. This also reduces the threat of new entrants, as investment is very high. Buying power in Raleigh is also on the rise, which further supports this option. Cons...
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