MEMORANDUM
TO: Shelby Givens (General Manager, Westlake Bowling Lanes – here onwards “WBL”)
FROM: Kumar Gaurav (Candidate # 75745133, UBC)
SUBJECT: Recommendation towards business planning for WBL
DATE: 2nd September 2013
Key Issues:
Shelby Givens, G.M of WBL could not get the business on track to repay the funds the
board had loaned it 16 months before. In Jan 2010, the business profited for the 1st time in
two years. But, now she wants to decide on a future direction for the business, so that the
debt payment can be speedy and her job gets more interesting. She also deals with multiple
external and internal challenges, such as, boosting employee morale, revamping the
underperforming F&B section, and growing the customer base.
Analysis:
External Analysis
Porters five forces analysis*:
1) Competitive rivalry within the industry*
The rivalry within this industry is very low due to WBLs strategic location and the loyalty
of its patrons. The setup does face some competition from non-orthodox industries, such
as,
*Porters five forces analysis: adapted from
“http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/”
soccer practice, and restaurants happy hours. Therefore, we can categorise this force to be
of medium effect.
2) Bargaining power of suppliers*
Due to the high availability of suppliers, this force can be categorised as low. In an advent
of suppliers raising the prices, WBL can easily find a substitute.
3) Bargaining power of customers*
Since 52% of the surveyed customers fall in the mid-teenage to middle age group (the
money holding group), these customers hold the key to financial success of WBL.
“Furthermore, 45% of the surveyed customers cited lack of time being the reason for not
bowling, WBL needs to save its customer base”** This force can be categorised as high.
4) Threat of new entrants*
Due to the strategic location of Westlake lanes, i.e. in downtown Raleigh and closer to
neighbourhoods and restaurants, the threat of new entrants is quite minimal.
5) Threat of substitute products*
The neighbourhood around WBL also boasts of facilities, popular among kids, which offer
rock climbing and laser tags. This is an indirect threat for WBL and shall be categorised as
medium.
Furthermore, I have prepared a forecasted plan for both options considered by Shelby
Givens. The income sheet forecasts and the break even analysis can be found under
Exhibit1 & Exhibit2 of the appendix, respectively. Some assumptions that have been made
to predict the outcome.
*Porters five forces analysis: adapted from
“http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/”
