Westlake Lanes

Westlake Lanes: Case Analysis

Westlake Lanes: Case Analysis

Key Issues:

Shelby Givens, general manager of Westlake Bowling Lanes is concerned with whether the company is financially ready to pay back the debt owed to its board members. At this point the board may decide against any alternatives and chose to close down the business and liquidate its assets.

External Analysis

Porter’s 5 Forces Model:

1. Threat of New Entrants:

It is relatively easy for new business to enter into this industry in terms of cost to entry. However, from a location point of view, it would be quite hard to enter. Westlake Bowling Lanes is located at a prime location to serve its target market because it is the only one in downtown Raleigh close to lively neighborhoods and restaurants. As well, Westlake Lanes has dominance over potential new entrants due to its existence for over 30 years. Essentially, this business has a rapport amongst the current existent recreational and league customers.

2.Buyer Power :

Buying power of customers is medium to high. The demand is quite elastic to a change in price as seen when Givens increased the price by 20%. League participation, recreational traffic and food and beverage sales all dropped. However, overall revenues only dropped by 3%. As well, there are many activities other than bowling around the downtown core which increase the power of buyers. The largest demographic segment is ages below 16 and over 55. Both these segments possess significant buying power; the former in due to their parents and the latter due to their stable disposable income.

3.Supplier Power:

There are various small suppliers of Westlake Lanes (i.e. food and drinks providers and shoes and bowling equipment providers). This ensures that if a supplier was to raise their prices, Westlake Lanes would not have a difficulty moving onto the next supplier. Due to this, Westlake Lanes has a significant advantage over its suppliers. Thus, supplier power is...