Westlake Lanes Case Study is a case study from HBR. The case study can be interpreted from the viewpoint of strategy, restructuring, and from growth, and transformation. The Case is named as Westlake Lanes: How can this business be Saved? The case authors present a poignant view and create a central dilemma of saving a nearly bankrupt business.
Shelby Givens, a recent MBA graduate, currently holds the position of General Manager at Westlake Lanes, a bowling alley that was founded by her grandfather several years ago. The establishment is currently facing the threat of closure. The management of Westlake has set a deadline of one year for Givens to achieve profitability for the business. Failure to meet this objective will result in the closure of the business. Upon commencing her employment, Givens becomes aware that the financial state of the organization is considerably more tenuous than both she and the board of directors had previously perceived.
Furthermore, the author notes that the staff at Westlake exhibits a lack of productivity. Givens adeptly addresses both of these concerns by employing innovative approaches to enhance employee motivation and engagement, while simultaneously implementing cost-cutting measures.
During the ninth month of operation, the company achieved profitability for the first time in over three years. Givens expresses concern regarding the adequacy and timeliness of the current approach, prompting him to formulate a more audacious and sustainable plan of action that revolves around pursuing either of two potential emerging markets.
The students are prompted to engage in a discourse regarding the adoption of a potentially innovative idea, maintaining the status quo of operations, or liquidating the organization to fulfill pressing loan obligations.
Westlake Lanes Case Study Solution: Brief Introduction
At the moment, the Westlake lanes are through a period of financial ruin. After Dane Sugar passed away, his son and some close friends gained ownership of the business and board membership, and they later took control of its day-to-day operations.
The fact that each person was busy with their own personal duties made it difficult for them to properly manage the business, despite the fact that they put out their best efforts to do so. In the years leading up to the collapse of the sugar industry, the company found itself in the throes of a protracted period of financial instability. In addition to this obstacle, Westlake Lanes are struggling with the threat of being labeled as financially unstable.
After the passing of the person who established the business, the board of directors chose Shirley Smith, an employee who had been with the company for many years, to fill the role of general manager. It was proposed that her current wage be raised by thirty percent. After further investigation, it was found that the person in question did not have any professional administrative expertise, which rendered her incapable of making any meaningful modifications to the Westlake lanes.
The problem of accessibility constitutes a substantial barrier to the organization’s progress toward its goals and its expansion. After Smith’s unsatisfactory term in the role, Shelby Givens was given the opportunity to take over as the incumbent.
The position of general manager of Westlake Bowling Centre has been given to Shelby, who received her MBA only recently. The subject of our inquiry is a descendant of the well-known Dane Sugar and brings a wealth of knowledge and experience to the table in the realm of business. Westlake Lanes have requested her assistance in order to find solutions to the problems that are presently confronting the organization.
The presentation of comprehensive agreements and granted givens makes it easier to obtain authorization for the management process. If Shelby is unable to create a profit within the stipulated time period of one year, then Westlake will be put at risk of being shut down. During the first few days of her new job, Shelby did some research and came to the conclusion that the current situation of the company’s finances is unsatisfactory in comparison to what she and the board of directors had anticipated.
In addition, it was found that the employees at Westlake Lanes exhibit decreasing levels of production as a result of their discontent with the inadequate communication practices of the management team. This was considered to be the cause of the decreased levels of productivity. After a period of time spanning two years, the commercial enterprise has at last been profitable within a period of time spanning nine months.
This accomplishment can be credited to Shelby’s skillful administration of the team’s morale. Givens displays a sense of anxiety that may have come about belatedly, which prompted him to design a more daring and long-lasting plan of action that was concentrated on the exploration of either of two distinct and untested markets.
Givens’s plan of action centered on the exploration of either of these markets was successful. When it comes to gaining the acceptance and cooperation of board members in order to put Shelby’s planned ideas into action, she may find herself up against some obstacles.
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Westlake Lanes Case Study Solution: Problem Statement
Even though the company has been profitable over the past two years, it is difficult to predict what the future holds for Westlake lanes. During the time that Shelby Givens was given the responsibility of managing Westlake Lanes, the firm was having trouble making ends meet as a result of increasing expenses and falling revenues. When the price of a product increases and at the same time the number of units sold decreases, the income of the company will certainly go down.
The costs connected with maintaining health insurance and acquiring coverage have skyrocketed to an unknown but significant degree. During its time at the helm of the company, the sugar operation was successful across a variety of fronts, notably in terms of profitability and its position as a market leader. As a result, a persuasive argument proposes that the organization’s entry into a phase of adversity can be linked to insufficient management practices by the incoming board of directors.
This claim is based on the idea that the organization entered into a phase of adversity. Westlake Lanes experienced a substantial setback as a result of the execution of the management style brought on board by the new members.
Shelby Givens, upon being promoted to the position of General Manager at Westlake, saw that the workers there demonstrated high levels of demotivation and frustration. This was ascribed to a lack of effective communication channels between the top management and the staff, as well as poor job role definitions and instructions for the employees. Also contributing to this problem was a lack of clear job expectations for the employees.
It is not possible for employees of the company to provide their feedback and suggestions to the board of directors because this privilege is not extended to them. During the time that Sugar was in business, there was a clear line of communication that ran between the company’s management and its workforce.
The loans that were first provided by the firm sixteen months ago are now the responsibility of the board of directors of Westlake Lanes, and they must be repaid. As a consequence of this, it is essential for the organization to keep a close eye on a variety of possibilities when selecting the most effective strategy for the reimbursement of financial resources and developing strategies to ensure the sustainable operation of the business over the long term.
The company is having financial issues, which has led to a drop in staff motivation, and it is likely that the company will fail in the near future. As a direct result of this, staff productivity has decreased, and workers are increasingly hesitant to keep detailed records of the company’s success. As a consequence of this, Shelby had difficulty successfully comprehending and analyzing the existing scenario in order to devise a plan and choose the appropriate alternative for the market performance structure of the Westlake Lanes.
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Westlake Lanes Case Study Solution: SWOT Analysis
Westlake Lanes Case Study Solution: Strength
The company has maintained its position as the market leader for several years.
The company has implemented a focused separation process.
The company enjoys a high level of customer loyalty.
The company has established strong relationships with its clients.
The company utilizes television commercials, magazines, and newspapers to promote its products.
The company has accumulated over three decades of experience in the industry.
Westlake Lanes Case Study Solution: Weakness
There has been a decrease in income in recent years.
The customer base exhibits an advanced age demographic. The demographic of the business’s clientele comprises individuals who are 35 years of age or older.
The absence of originality and insufficient resources to enhance the newly established divisions.
Inadequate oversight of tasks and responsibilities.
Westlake Lanes Case Study Solution: Opportunities
The enterprise has the potential to concentrate on a diversified target market.
The enhancement of preparation systems can facilitate the expansion of customers’ information.
The enterprise has the possibility to enhance its reputation in other regions.
The enterprise can opt to outsource its activities in regions where labor expenses are low.
Endorsements from prominent personalities could potentially augment sales.
The enterprise can also prioritize gaming activities to generate more revenue.
Westlake Lanes Case Study Solution: Threats
The demographic cohort of individuals born between 1946 and 1964, commonly referred to as baby boomers, is experiencing a rise in population size. However, there is a concurrent decline in their overall health status.
The primary demographic focus of the organization is the cohort commonly referred to as the baby boomers.
The financial performance of the business will be impacted by economic changes.
The implementation of multi-generational and multi-social techniques is expected to have an impact on the business culture of Westlake Lanes.
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Westlake Lanes Case Study Solution: VRINE Analysis
Valuable
Westlake Lanes have been providing savings to its customers for more than three decades. Consequently, a steadfast clientele exists. The presence of a devoted customer base can serve as a safeguard against generating unfavorable revenue for the company. Moreover, it will serve as a preventative measure against both direct and indirect competition for the company. The implementation of a sustained business operation can generate customer value and foster customer confidence in the efficacy of the company’s operations.
Rare
Regarding the Westlake lanes, it can be asserted that they remained in operation for a period of time. However, based on market analysis, it can be demonstrated that there are limited opportunities for survival in the market beyond the 1970s. Despite their survival, the prospect of continuing as a family-owned enterprise is unlikely.
Imitable
This competency cannot be replicated or replaced as no other company has been able to attain the same level of exposure and entitlement over the past thirty years. Regarding this matter, it is intolerable to replicate this skill.
Exploitable
This competency has the potential to be utilized for personal gain. Westlake Lanes have the potential to further enhance its public perception within its local community through the utilization of this particular skill set. Westlake Lanes have the potential to enhance its competency by further leveraging it for greater benefits. Moreover, given the extended duration of the business’s operation, both employees and managers stand to benefit from the historical data, utilizing it to enhance their skill sets. Competencies may manifest as a reduction in costs or an increase in revenue.
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Westlake Lanes Case Study Solution: Porter 5 Forces Analysis
The threat of New Entrants
This market has a relatively low barrier to entry, which makes it simpler for a new business to get started in the sector. On the other hand, the barrier to the entrance may be somewhat higher as compared to the region in which Westlake Lanes is active. Westlake
Bowling Lanes is in the best possible position to serve the customers it seeks to attract because of the strategic location it occupies in the heart of downtown Raleigh. It is in close proximity to a number of thriving areas as well as culinary places.
The fact that Westlake Lanes has been in business for more than thirty years demonstrates the superiority of this establishment in comparison to any potential new competitors. The fact that this company’s current customer includes both amateur and professional athletes demonstrates a correlation between the two groups of consumers it serves.
Bargaining Power of Buyers
Customers have varying degrees of purchasing power, ranging from moderate to high. The degree to which consumers are willing to be flexible in reaction to changes in price was illustrated when Shelby raised the price by 20% and found that customers were willing to pay it. The information that has been made public related to the contributions made by associations, the traffic that is considered to be frivolous, as well as the sales of food and beverages. In spite of this, there was only a 3% drop in the total income.
Bowling is only one of several activities available in the downtown area that boosts the purchasing power of consumers and gives them more leverage in negotiations. Those who are younger than 16 years old and those who are older than 55 years old are the age groups that demonstrate a more marked upward trend in terms of demographic dispersion. Both of these demographic groups have enormous purchasing power, with the former group benefiting from the financial support of their parents and the latter group benefiting from their continuous disposable income. The financial support of their parents allows the former group to make larger purchases than the latter group.
Bargaining Power of the Suppliers
There are a few other operators on a smaller scale that offer Westlake Lanes. Because of this precaution, even in the case that one of Westlake Lanes’ suppliers significantly raises the prices of their products, the bowling center won’t have any trouble switching to another provider. Because of this, Westlake Lanes is in a position to have a significant competitive advantage over its many suppliers. Because of this, it may be said that the power of the suppliers is relatively low.
Competitive Rivalry
Westlake Lanes do not face direct competition as there are no other bowling alleys in close proximity. Nevertheless, it encounters a group of competitors that operate indirectly. The level of competition is moderate to low. The existing customers’ loyalty to Westlake Lanes also serves to diminish the level of competition.
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Westlake Lanes Case Study Solution: Quantitative Analysis
Westlake Lanes Case Study Solution: Operating Margins Ratio
Although it remained in the positive range, the company’s operational profit began to decrease in the year 2001 and has continued to do so ever since. Since 2007, the value has been heading in the opposite direction of what was expected. By the year 2010, the business had already recorded a negative operating profit of 10%, which is an indication of ineffectiveness non the management of its activities. As a result, the company is currently at a phase in which it is absolutely necessary to cut costs.
| 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| 15% | 15% | 8% | -3% | -4% | -10% |
Westlake Lanes Case Study Solution: Gross Margins Ratio
If the gross margin is positive, it means that the sales company is currently in the stage of retirement, which is indicated by the positive value. In addition, the funds are adaptable and can be used for a variety of extra expenditures. In essence, this suggests that the primary reason Westlake Lane was unable to yield a financial advantage was due to factors that were located in another location. Givens has once again provided evidence of a potentially fruitful strategy for greatly cutting total costs and significantly increasing earnings.
| 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| 78% | 78% | 78% | 77% | 75% | 82% |
Westlake Lanes Case Study Solution: Current Ratio
The ratio of liquid assets to total assets suffered a considerable decline throughout the years 2008 and 2009. This is significant because the board’s choice to sell the company may result in the board members being unable to completely return the initial investment they made in the company.
| 2006 | 2007 | 2008 | 2009 |
| 3.415 | 2.07 | 1.3 | 0.442 |
Westlake Lanes Case Study Solution: Evaluation of Alternatives
Alternative 1
Create an atmosphere similar to a high-end bowling lounge. The case study provides an overview of the benefits as well as the drawbacks of this solution. The ability to obtain a liquor license is one of the elements that contributes to the profitability of the sale of alcoholic beverages. Another reason is the generally inelastic demand for alcoholic beverages, which can result in the possibility of higher profit margins. The greater costs connected with insurance and compensation, in addition to the psychological burden of making a long-term commitment, might both be considered possible drawbacks of this option.
Alternative 2
When acting in the capacity of an advisor, it is advisable to give individual effort and supplementary contributions higher priority, while keeping one’s attention fixed on the goals of the organization. Shelby is able to focus on other activities and maybe investigate the field of consulting as a result of this alternative, which is one of the potential benefits of this option.
Furthermore, it is not out of the question that a subsequent manager may do better than Shelby Givens while also exhibiting all of the benefits associated with alternative 2. The amount of time that must be invested in order for a newly appointed manager to become acquainted with the operations of the organization and its employees is one potential disadvantage. Because of this, there is a possibility of an ongoing cycle of frequent people shifts within management.
Alternative 3:
The current level of operations and the continuation of the company are both things that need to be preserved as a top priority. It is essential to do a thorough analysis of expenses and find ways to boost revenues without relying on large additional funds. Givens has already laid the groundwork for the inactivity, so this option comes with a minimal level of potential danger, which is one of its many benefits.
Givens or any other manager may find themselves in a position where they need to keep things as they are for the time being. Givens and the board of directors would be able to ensure the job security of their employees, which would have a direct impact on the financial well-being of their family if the family business was allowed to remain in the Givens family’s ownership.
In addition to this, the reduction of corporate spending plans will be accompanied by an increase in total revenues. In the end, the company is in a position to collect profits right now, and it may, at some point in the future, be in a position to make a substantial investment of capital. In relation to the problem of conflict, it is important to point out that it is possible that simply running the business as usual would not be sufficient for creating significant profits over an extended period of time. T
The continued functioning of a firm in the absence of the self-assurance required to move forward could result in a waste of time and resources. The following is an analysis of the costs associated with this choice as an alternative: The business was successful in cutting its fixed expenses by 8%, its advertising spending by 50%, and its service costs by $11,000. It is anticipated that there will be an increase in revenue as a consequence of a 20% increase in pricing in addition to a 26% increase in patronage. As a consequence of this, there is a good chance that the company will make a profit in the amount of $10,208 during the month of March in the year 2010.
Alternative 4:
Develop and use a method of instruction that is appropriate for youngsters. The case study explains the benefits and drawbacks of this choice, including lower initial expenses, the availability of free arcade games with a revenue-sharing framework, the absence of substantial expenses related to structural repair, and lessen damages. In addition, one of the negative aspects is to the increased costs that are related to marketing and advertising.
Westlake Lanes Case Study Solution: Recommendations
Following an exhaustive analysis of all of the potential solutions, it has been determined that Alternative 3 is the best course of action for Westlake lanes. It is essential that Shelby’s leadership in the corporate world be preserved if the current state of circumstances is to be preserved. This is because Shelby’s leadership has been instrumental in bringing about the current state of events.
The alternative market that is highlighted by Porter’s Five Forces model and the competitive advantage that is determined through the VRINE test both contribute to the fact that Westlake Lanes is able to sustain its business operations. In order to maintain the Westlake lanes’ trajectory for the long run, it is strongly suggested that a strategy that is kid-friendly be implemented.
Because of the company’s precarious financial position right now, big monetary investments are not recommended as a course of action. In order for the business to earn adequate profits to finance the execution of the kid-friendly strategy, it is recommended that the operations of the firm be optimized through the addition of additional revenue and the reduction of costs.
According to the income statement from March 2010, it is clear that the organization has the ability to make a profit of $10,208 during the given year by combining a 20% rise in pricing, a 26% increase in patronage, and an 8% decrease in fixed costs. This could be accomplished by increasing prices by 20%, increasing patronage by 26%, and reducing fixed expenses by 8%.
In view of the benefits that were discussed earlier, the decision was made to make use of a strategy that focuses on children. Through more strategically directed marketing efforts, Westlake Lanes may be able to capitalize on the purchasing power of younger customers. It is quite clear that parents are prepared to pay a premium for their children, even if it amounts to twenty dollars more per month.
The second largest demographic group that is addressed consists of children who have not yet reached the age of sixteen. It is possible to attract youngsters and, as a result, their guardians by offering cutting-edge arcade games through a revenue-sharing model with an item of reduced initial expenditure. This will lead to an increase in the profitability of the company.
Samrat is a Delhi-based MBA from the Indian Institute of Management. He is a Strategy, AI, and Marketing Enthusiast and passionately writes about core and emerging topics in Management studies. Reach out to his LinkedIn for a discussion or follow his Quora Page