The Westlake Company is facing the issues of the lesser employee productivity and the operational challenges which are threatening the going concern of the company. The industry has effective place for growth, but the strategies of the company should have to be effective. Shelby Givens has taken the step to increase the profitability of the company by motivating employees and reducing the costs but still the marketing efficiency needed to be tapped in the organizational performance.
It is recommended that the company should have to first hire a marketing expert and secondly it should have to develop some policies of acquisition of a small company that can bring management expertise and innovative ideas to grow. A couple of strategies like the financial status of the company can be increased if the innovativeness in the management is increased, Product innovation, Increase in the marketing and the operations. Moreover, the best management is the key for the business to grow it as the operation of the business will be increased hence all the recommendations are needed to be considered.
The company has been dealing with worse conditions. There have been the poor circumstances regarding the operations, management of the individuals, the productivity of the employees and the management in the company as well. The employee productivity was significantly low as was expected from them to work in the best interest of the company but they were not having any performance management and motivation system in place and thus they could not work in the best interest of their organization.
The poor circumstances at the organization were not effective, and Shelby Givens has made an attempt to deal with the poor conditions at the organization. She made some structural changes by reducing the cost so that the revenue could be increased and delivered motivation among the employees to work better and increased their morale. As a result of her actions, the profitability of the Westlake became better in nine months.
The company still has the potential to perform a complete analysis for the current operation costs and then can cut the expenses to improve the profits generated by present revenue. The most important internal factors that can contribute to increase efficiency in performance are the increased dedication level of the employee and reduction in the extra and unnecessary costs like services that are not required by the customers and then looking for those suppliers that provide the cheaper products. Another thing is that there are not much bowling alleys in the surrounding that gives them an edge of differentiation. They have more area and space that can be utilized into other services provided.
One of the greatest and more influential weakness in the organization is the lack of the leadership in the organizational structure to conduct the managerial activities in a proper direction. There is low motivation level in the employees or the company that have a high communication gap with the higher authorities and the subordinates. The poor financial performance and negative growth is observed in the form of increased debt that puts financial limits on the actions to be taken. The limited background in running a business is another drawback hindering the progress.
The most evident threat in the present situation is the declining revenue due to diverting customers to other clubs and restaurants clearly indicating the negative progress of the company as it is not able to attract more and more customers. The rising competition in the market that provide a lot of other entertainment facilities is another issue to be concerned about which if not given the proper attention might clear out the company from the market. The business would end up in complete failure if the leadership issues and managerial conflicts are not resolved. There are always more and more entrants in the industry that put extra threat to the business.
Customers are the greatest opportunity for the organization right now. They should invest time and budget in knowing the preference of the customers and the value they give to certain luxuries and services provided by them. Having an information about the choices of customers the company can make the right decision about investing in correct place. They should effectively market their services since there are not much competitors they would gain more attention for the ones looking for bowling alley. They can also introduce new services like food restaurant providing the customers another reason to stick around.
Porter’s five Forces
Threat of New Entrants- Low
The space, investment capital and other resources required to construct a whole new facility in the downtown area are very high and not every other competitor have the capacity to do so. So the new entrant into the bowling alley business is very low and something that can be turned into the benefit of the organization. So threat for this external factor is quite low.
Competition from Rivals: Moderate
As far as the services and entertainment provided in the bowling alley are concerned there is no competition for the company but still there are other services and modes of entertainment being provided by a lot of competitors in the vicinity and that poses a big external threat to the business. Thus rivalry cannot be ignore din this situation and need is present to determine new ways for adding value to services provided.
Supplier Power: Low/Weak
In case of the Westlake lanes the power of the suppliers is very low since most of the facilities in the bowling club not require much of resources on routine basis and the floor and other equipment only require the maintenance for which a lot of options are available in the market. Also for the food facilities there is a reasonable number of options for suppliers to select from and since the location is in hub of city room for negotiations is always present because suppliers would know that company has many other options for switching.
Buyer/Customer Power: High
The customers and the market targeted by the Westlake lanes is the highest external factors that needs attention because they are the one who would generate revenue for the company and if the right decision are taken to attack more and more customer by providing them with value added services along with other restaurant options and a small music club to hang around this can be turned into the greatest strength for the company. Everything is depending on the customer whether they like the Westlake lanes as one of their entertainment related spots or not. Buyers are the most important factor upon which the fate of Westlake depends.
Threat of Substitutes- medium
As far as the customer who just want to enjoy bowling are concerned there is no other substitute than the Westlake lanes but other contributing factors include many other entertainment services like the comedy club, music clubs, food restaurants present in the vicinity providing other mode of services that customers can enjoy. So company also has to look at situation from this perspective.
The weight to internal strength and weaknesses are given on the basis of importance they have with respect to either improve or decrease the performance of the Westlake lanes. The ratings from 1-4 are given with respect to the strength or weakness of the each internal factor in impacting the performance (Jurevicius, 2014).
|Key Internal Factors
|Increase communication among employees
|More useful space and area for another entertainment facility
|Weak financial status
The weight from 0-1 with the maximum weightage of 0.25 to external threats and opportunities are given on the basis of importance they have with respect to either improve or decrease the performance of the Westlake lanes. The ratings from 1-4 are given with respect to the threats and opportunities of the each internal factor in impacting the performance (Jurevicius, 2014).
|Other Entertainment options Provided by Competitors
|Increasing Debt from banks
|Provide more entertainment facilities
|Get information about Customer preferences
|Take advantage of more space by adding value to customer experience
Analysis of the Functional areas
The financial performance of the company in the nine months period can be analyzed by the revenue and the cost measures. In this way, it has been analyzed that under the leadership of Shelby Givens the revenue of the company has grown by 6%, the cost was decreased by 8.5%, the health and insurance cost decreased by 13%, electricity bill was decreased by 30% and the overall performance of the company was increased by the 30%. Analyzing this financial position of the company it can be said that the company in the period of 2010 will have more better results and there will be effective criteria through the company will be developing the values for the organizational strategic financial performance.
It has been determined that the net income, total liabilities, and the cash flows have been shown in detail and the reason is that situation of the company could be seen in a quite clear manner compared to others in the market.
The operational performance of the company has become better in a way that Shelby Givens has discussed with the creditors to provide the company with long maturity dates so that the company can be operational and do not run out of the credit. To help the financial measure of the company, he took the decision to replace the cleaning company with members of a local team so that the cost to the company can be reduced and the team was agreed on the half prices as compared to the cleaning company.
However, still, the operations at the company lacked about providing the effective responsibility to every individual. The marketing practices at the company were not poor, and the customers were not being reached at their pace which was a significant operational deficiency in the organization.
This operational deficiency can be analyzed by measuring the performance of the company before and after the actions taken by Shelby Givens. This can be considered as an important factor through which the organizational deficiencies can be analyzed by using the comparative information of the company. In overall, the performance of the Shelby Givens is looking better because of the facts that the company was operating before his action with no profit and it was about to be bankrupt.
After his actions, the company started to make profits even in the period of nine months. This can be considered as the factor of effective performance of the company, and if the company is growing in the same peace, then it is analyzed that the company will not face any going concern issue.
It can be seen that the company marketing sector. It has been explained in a good manner way that the business is not up to the mark. There are many problems that is coming in the way of the success of the business. Here the main idea that is needed to be generated is that the budget for the company is not that much high and that is the main reason for the unsuccessful operation of the business. There is much competition in the market, but still, they can service as the marketing is done.
It needs to determine that on the regular basis the pamphlets and the online advertisement of the company need to be strong enough so that better position in the market could be depicted. Therefore it has been stated that the internal and the external factors are helpful in this scenario and the best possibilities could be seen as the success of the business is determined in this matter.
It has been seen that the operations of the business are good enough and they are needed to be taken care of such things. It has been explained in a good manner opinion that the best of the production is done as the line of the business is set at one angle, and the effectiveness could be bared here. It is determined that the operation of the business are good enough and the manageable straight as well.
It can be determined that the business is opened seven days a week and 365 days a year. It has been in the full form until the last couple of years. The best practices have been effected in a way that the full versions have been noted in this regard. It could be calculated in the manner that the operational efficiency have been conducted and the exact performance can be predicted in a way that useful stance is depicted.
Bowling industry in the period of 2011 is being placed in an effective manner. There are 100 million bowlers in the 90 counties of the world, and there were approximately 70 million bowlers in the United States in that industry. There are many games being played in the industry, and the companies are playing in an effective manner. It can be considered that the industry is having the higher level of demand for the products produced by the company and the company should need to tap the right target market with the right marketing strategies to grow all over it.
It could be stated that the industry in this matter is an advanced. It is not the case where this is only the business that deals in the bowling alley. All over the US, there are hundreds of blowing alley, and that could be determined to be nice operations as well. Here the money is the problem for the business, and the expertise is needed to be enhanced sop that the better outcome could be seen.
Coming at the industry analysis in detail there are many different aspects that have taken in the consideration, and the business is needed to be looked. The others are looking for the innovativeness, but here no such task are seen. Due to this, the operations of the company are not the best one. There are many other accessories in here that are included for the business, but in this case, it is not the case and not being predicted as well.
Strategies to be used
There are couple of strategies that could be used by the company, and I will like to say that some of the major categories are stated as
- The marketing operations are needed to be increased
- The operational efficiency needs to be upgraded so that market competition could be increased.
- The financial status of the company can be increased if the innovativeness in the management is increased.
- Product innovation
- Increase in the marketing and the operations
Here the different type of strategies has been explained in the detail so that the best approach could be used by the management of the business and the effective operations could be seen to earn more profits.
The very first recommendation for the Shelby Givens is that she needs to hire a marketing expert. The marketing expert in this regard will hold the charge and evaluate the needs of the customers and the consumer behavior regarding technology and the demand of the company. This will result in increasing the values of the company in the customers’ perspectives. The company will be able to develop the proactive strategies regarding the customer needs, and the growth could be foreseen.
Secondly, the company should have to develop some financing arrangement by making some acquisition of a successful small and medium term company having a reputation in the market to seek growth. The newly acquired company will bring management and employee’s expertise, and the stance of employee productivity and motivation will be increased.
The management of the business needs to be changed in the context so that the innovativeness could be depicted. Moreover, the best management is the key for the business to grow it as the operation of the business will be increased. Therefore all the positions are needed to be sustained in the business to have the effective results.
Jurevicius, O. (2014, october 20). IFE & EFE Matrices. Retrieved from www.strategicmanagementinsight.com: https://www.strategicmanagementinsight.com/tools/ife-efe-matrix.html