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Case Analysis : Westlake Lanes Operated At A Loss For The Recent 3 Years

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ISSUE STATEMENT
Westlake Lanes operated at a loss for the recent 3 years. The main issue in this case is how can they turn around their operational performance.

CASE ANALYSIS
The forefront case analysis includes external analysis and internal analysis. It is crucial to understand macro-environment, industry environment, and the capability of the company itself before making decisions. In this case, the PESTEL analysis is utilized for macro-environment analysis, the five-force’s is utilized for industry analysis, VRINE, and financial analysis are utilized for internal analysis.

EXTERNAL ANALYSIS
PESTEL Analysis:
Political: A 60% electricity usage of commercial compact fluorescent lighting subsidization from government for 24 months. As …show more content…

In addition, the government incentive for commercial electricity cost reduction and Small Business Association will facilitate to reduce the operational cost of Westlake Lanes. Moreover, the increasing number of Raleigh’s residents with relatively young age who have the buying power to ensure their customer flow. But the employees’ the increase of health insurance cost caused the operational cost of Westlake Lanes to increase.
The Porter’s Five-Forces Analysis:
The Threat of New Entry: The threat of new entry is relatively low in this case. Because Westlake Lanes has been operated for 30 years in an excellent physical location where close to lively neighbourhoods and restaurants in Raleigh’s downtown area. And during these 30 years, Westlake Lanes gained a large amount of loyal customers. It is hard for a new entrant to get such a location and relationship with customers even though the capital requirement for opening and operating a bowling alley is not high.
The Threat of Substitutes: The threat of substitutes is high in this case. This is because of the competitor for Westlake Lanes is not only other bowling alleys but also a wide range of other entertainment activities.
Supplier Power: Supplier power in this case is low. Although there are different suppliers for their bowling equipment, bowling accessories, and food and beverages, it is not hard for them to find new suppliers.
Buyer Power: Buyer power in this case is high.

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