Westlake Lanes Case Analysis

Westlake Lanes: How Can This Business Be Saved?

Strategic Management

04 - 75 - 498

April 18, 2016

Submitted to: Dr. Huanglin Wang

Vivek Patel

Key Issue

The current problem faced by Shelby Givens, general manager of Westlake Bowling Lanes, is which direction to steer the business into (Kid-Friendly Bowling Lanes or Upscale Bowling Lounge) in order to absorb the effects of the poor financial performance in the last two years, ensure long-term sustainability and a profitable business in the future. Considering the large investment costs of each of the alternatives, this decision is extremely important as they have been operating on equity loans that have to be paid back soon, and the board is going to make a decision to either sell the business (liquidate), continue operations unchanged or support one of the two alternatives presented by Shelby.

Overview of External and Internal Analysis: An internal analysis (VRINE and Financial) has been conducted in order to analyze Westlake Bowling Lanes resources and capabilities, and to ensure that they possess a sustained competitive advantage. A financial analysis has also been conducted to analyze if Westlake can support its future objectives and strategies. Lastly, an external analysis (Porter’s Five Forces) is used to analyze the industry structure and attractiveness for new ventures.

External Analysis

Porter’s Five-Forces Model

Threat of new Entrants - (low) -   Large capital and real estate requirements ($250,000 in startup costs) based on Dane Sugar’s investments upon opening Westlake increase entry barriers, substantially. However, it is difficult for any new entrant to find a prime downtown location as they will be competing with new entrants from other industries who are looking for downtown locations as well. Westlake Lanes has a prime downtown Raleigh location that is close to lively neighborhoods and restaurants. Moreover, Westlake has built a strong bowling customer base over 30 years (league...