Sugar Bowl Case Analysis

Case Analysis: Sugar Bowl

This case analysis will focus on Sugar Bowl, a privately-owned bowling alley. Shelby Givens is the granddaughter of the original owner and creator of Sugar Bowl and is currently in charge of the business. She is faced with the task of making the business profitable which required changing it to fit a more modern society. Givens has been successful in many areas but is not yet meeting all the goals she set forth. The business continues to struggle meeting full capacity on most nights of the week, thus is not meeting its full revenue potential. Although many improvements have been made, there is still many more things that must be developed for the business to bring maximize profit. Givens is struggling in knowing what else can be done.

This report will carefully consider the data, provide a detailed analysis and develop recommendations based on that data.

Problem/Opportunity Statement

Givens now faces a dilemma. She has been offered an opportunity to sell the business for a minimum of $1 million and she also has been offered an opportunity to join another company which focuses on helping start-up companies. This position would double her current salary and allow her more free time, which Givens is currently lacking. She has been unable to create a balance between work and home, as Sugar Bowl is requiring most of her time. There are also the feelings of other family members and stake holders who have significant interest in what happens with Sugar Bowl that must be considered.

Situation Analysis/5 Cs

Applying a 5C analysis assesses the context, competitor, company, collaborators, and consumers of an organization. To aid in her decision making, Givens would benefit from conducting this type of analysis. The focus of this type of analysis is specifically on marketing decisions. If she were to continue with Sugar Bowl, this analysis would help her to create an effective and specific marketing strategy.

Context

Changes to contextual factors often impact the industry as opposed to a specific business. Companies have little control over these factors. This includes things such as the economy, technology, political decisions, the environment and legal issues that affect the industry. (Corporate Finance Institute, 2019). Sugar Bowl operates within the context of the entertainment industry, more specifically the location-based entertainment industry. When considering whether to keep or sell Sugar Bowl, Givens must consider the larger context of which the company operates.

In terms of location-based entertainment, average household spending on these types of activities is decreasing. This has been a long-term trend dating back before 2007. However, bowling is the most popular source of indoor entertainment, but even serious bowlers are only doing so 25 times per year. Additionally, the percent of serious bowlers has declined 28% between 2007 and 2011. The same downward trend is present regarding league bowling as it has been found that leagues are not a match for modern lifestyles. It has also been found that most houses that bowl are upper middle class and wealthy. This is also the group that is increasing in terms of bowling participation. Almost half of location-based entertainment spending comes from households that make $100,000 or more but will only visit bowling centers that provide them with an upscale experience. These locations must also be located near them. Research has also shown that location-based entertainment businesses that focus on families are less successful than those focusing on specific targets of adults (White Hutchinson, 2012).

Competitor

With the closing of the town’s other bowling alley, Sugar Bowl has no direct competition in terms of bowling. However, there are other bars and restaurants for consumers to visit. These are not direct competition in that bowling is not offered, but they are an indirect type of competition in that they are where people go to socialize. Sugar Bowl needs to have consumers decide to go to Sugar Bowl as opposed to spending their free time with friends and family at another location.

Company

Analyzing a company means understanding its competitive advantage and ideally this advantage should be sustainable over time and not just a temporary advantage. Sugar Bowl has a definite advantage in that there are no direct competitors in terms of bowling. Other advantages that the company has are being able to hold private events, can cater to families and singles, can provide food, drinks and entertainment beyond just bowling, and is in an up and coming location.

Collaborators

In terms of 5C analysis, collaborators are those that enhance a company as it works to provide its goods or services. These are often members of the company’s supply chain (Corporate Finance Institute, 2019). Sugar Bowl does not have strong collaborators. The catering company that assists with food is, by definition, a collaborator. However, there is little value stemming from this collaboration other than the company provides a service to Sugar Bowl. This partnership is not advertised by either company.

The owner of the other bowling alley that Givens developed a mentor/mentee relationship with is also a type of collaborator in that the two share ideas which benefit both companies. This is a valuable collaboration that Sugar Bowl should continue if Givens decides to keep the company.

It would benefit Sugar Bowl to get involved with local officials and with her new neighbors who are moving into and focusing on developing the area in which Sugar Bowl is located. The businesses could work together with local officials to ensure development of the area that would be of benefit to all.

Consumer

The primary consumers for Sugar Bowl are young professionals, graduate students, and families. There was also a company effort to have other companies and organizations hold private events at Sugar Bowl, with the focus being on trying to schedule private events on the nights that Sugar Bowl had fewer customers. There has been an effort on gaining repeat customers by offering discounts through email and social media.

Porter’s Five Forces

Porter’s Five Forces helps to analyze competitive forces that apply to every industry. This model helps to identify an industry’s strengths and weaknesses. The information the model provides helps to develop corporate strategy. The five forces are competition, new entrants into the industry, power