Sugar Bowl Case Study

Sugar Bowl Case

MBA 590

By

Tawfiq Alyami

Southern Oregon University

April 19, 2017

Overview

Givens returned to North Carolina’s Raleigh after graduating from business school. Givens had the desire to rename the Westlake Lanes to Sugar Bowl and make it a successful venture. The Westlake Lanes had witnessed a downward spiral, characterized by an inability to make significant profits and consequently, the company’s ability to sustain itself dwindled by the day before the period of transformation. In March 2010, Givens successfully convinced the Westlake lanes’ board of governors to permit her to make changes in the bowling alley. The main aim was to change it into a successful one. The cost of the overhaul was anticipated to be approximate $600,000. There were three phases that Givens went through. Givens also faced many challenges in the process.

Challenges that Shelby Givens Faced

Phase 1(Preparing for the Transformation)

          The sugar bowl had to address talent management issues if it had to successfully restructure the business and change the way customers perceive of their business. Although Givens was aware of the working of the bowling business her grandfather operated from her childhood still Givens never actively took part in management of the business. The fact that Givens intends to transform the business in a way that Givens has no former experience makes the situation even graver.

Givens undertakes the project with the help of loans Givens obtained from her family and friends. Givens also entered a contract with bank in which Givens borrowed $100,000 on strict terms and conditions. The terms implied that the bank holds the right to recourse the loan in case her business could not produce pre-defined profits.

Service structure was weak and lacked glamour that attracted customers. The beverages range was small and the menu only offered pizza. Existing structure didn’t allow Givens to include a full-fledged kitchen to serve an extended menu.

 Phase II: (Renovation and Grand Opening)

            Delay in deadline caused increase in costs and decrease in revenues. Overwhelming work load encouraged Givens to hire a general manager at compensation higher than Givens could afford.

Volatility: As the project was innovative and was unique from any other project in the neighborhood of Sugar Bowl, there was a high level of risk involved. Givens estimated 3 nightly shifts each of which catered 150 customers. However, volatility of number of customers was anticipated because of changes in seasons and creation of brand name.

Organization: Management of talent posed an important issue for Sugar Bowl. The previous workforce was unfit of rate transition and most of them rejected the restructuring process. Only two out of three long-standing employees of the business survived transition. Although pone was a good fit the position he had to take, the other one had to undergo intense relocation if her role. New workforce mostly represented college students and young adults and added enthusiasm and potential of shrinkage to the business.

Marketing: The newly restructured business did not face serious issues at its marketing function. However, this lack of threats and competition did not protect the business from downside risk of sales volume volatility.  

Phase III (2011/2012 Operations)

         The biggest challenge that the business faced when it commenced its operations was when the business started showing revenue. Givens noticed that the volatility of the number of customers coming in a particular day was higher than what Givens expected. In the beginning, the business catered as much as 60% of its total capacity. The ratio of activity among weekdays and weekends reflected the expected picture. However, the change in customers’ visits from day to day was both alarming and confusing.

Talent management: During the first six months of operations, newly formed business experienced harsh transitions in its workforce. The company, first, lost its long-standing employee to serious re-positioning of one key employee. Moreover, the company lost few workers because of low pay and fraudulent activity on part of one of the employee. However, the company could replace that employee with the right fit for the position.

Marketing: With the help of its new sales staff member, Sugar Bowl was able to attract business customers who were willing to get their staff entertained at their premises. As the business took flight because of these private events, /Givens regretted the decision Givens had made earlier in her career as an entrepreneur to desert bowling leagues.

Later, the business witnessed significant development in the entertainment industry in its neighborhood. However, this growth of entertainment industry indicated a negative bias towards bowling facilities.

Responses to the Challenges

Phase I
         Givens rightly understood that human resource is the key success factor of any organization. Givens addressed the importance of this resource by communicating her plans first with her staff and by lending them an understanding ear. Givens could keep them loyal to the organization even after the major transition.

         Givens understood that Givens may have limitation in some aspects of managing a bowling facility. Givens resorted to address her limited knowledge by seeking help through researching and through seeking mentoring.

          Financing a transition often make the most important factor that determines the level and result of a transition. Givens had high plans for her restructuring plan. Consequently, Givens brought in enough funds from her social circle and the bank. To avoid strict regulations that a bank may impose, Givens preferred to secure more funds from her personal relations rather than a financial institution. Givens negotiated terms that gave her a margin of error. For example, Givens negotiated a fifteen months’ period for completing transformation when Givens planned to complete in nine months only.

Service structure: The business showed that it had restricted its services too much leading to a lackluster experience for customers. Givens responded by bringing in a whole new set of facilities that could cater wide range of customers’ requirements. In fact, Givens made the decision to re-build her business’ brand name was a result of her perception about absence of choices in its services and offerings.

Phase II

         The redesigning and re-building of facilities was a difficult part of the whole process of renovation. Givens had to delay the business’ re-opening date to accommodate delay in restructuring process.