Sugar bowl Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Sugar bowl Case Study Solution

Introduction

The sugar bowl is a company which is initiated by Givens, by the investment of his great grandfather. Actually it is the renovated version of Westlake’s, which is the original business of het grandfather. A higher investment was made in renovations of Westlake by introducing new lane machineries and technology along with the change in interior such as increasing in space to 16,000 square foot in order to make it a place for casual dining and socializing with the bowling for 150 people which needed to double the existed capacity.Givens believed that increase in revenue would be enough to cover up the costs such as rent expense and insurance.

Givens developed a new concept which was based on more youth oriented and expected to be a better profitable, which was named as “Sugar Bowl”. As a result,she had to face with different phases in order to develop the business of Sugar Bowl. However, due to the closing of Westlake, the capital such as human capital and company’s assets were free. As a result,few of its employees were used for Sugar Bowl due to their experiences and loyalty.

Hence, givens has used many cost efficient strategies in her entrepreneurial business. Such as cost effective designing by graduating students which were not charging against their academicals hours. Moreover, the menu of food and beverages were limited. And the cook and caterers of Westlake were utilized at Sugar Free.

However, the work was not completed in predicted time and few weeks were delayed due to permit issues, reordering of materials and shortage of staffs. In addition, the budget of $100,000 shortage reached to $36,000. As a result of delayed, it had been projected that $30,000 revenue had been lost. Consequently, different positions were hired to reduce the workload from her, such as general manager, finance manager to look after the costs and controls and the marketing. Budget of respective authorities were also developed in time.

As the Sugar Bowl was opened on May, 2011, operations of the company started. Analyzing customers from week to week, it has been determined that there is a lot of unpredictability in customer’s attendance. Such as, in weekends, approximately 60% of total capacity was used. However, on Mondays, Tuesdays and Wednesdays, the capacity was used only 15%. As a result, these days were used in private events for customers.

The menu of restaurant was also analyzed. As a result, few of the dishes which were not taken by customers were removed and the prices of likely dishes were increased by 10%. Consequently, per customer revenue from food averaged to $50. In addition, the partnership was built from a local dating service company, which was anticipated to generate higher customers and increase in repeat customers. Moreover, another partnership was built with Zulu, a musician band, which was highly liked by many customers. And it was anticipated that 15-20% of customers would be repeated. Hence, it would increase the customer base and number of repeated customers.

Problem Statement

As the Sugar Bowl revenues are increasing, Givens is concerned about company’s growth such as expanding it to a new location, or using a franchise opportunity or to expand the current location. On the other side, a person called her for purchasing Sugar Bowl for $1 million, as starting point of negotiations, along with the 25% of stake would be held by Givens in future. Another opportunity had knocked the Given’s door by offering her for joining a management consulting firm to lead a group of small operations. As new firm would be giving her a lot of facilities such as travelling, work-life balance, a handsome salary which would be her more than double of current salary and the bonus.

It has been analyzed that bowling industry has been continuously growing and the value of family entertainment centers is making its own place. Moreover, an ethical reason is also with Givens as selling or leaving his grandfather’s investment. In addition, the return to investors such as family and debt from bank would be saddled. On the other hand, the future of Sugar Bowl is unknown, as may be it wouldn’t be able to continue the current growth and the novelty of bowling would be lost in future.

In addition,the current marketing strategy of the company is inefficient as the company is investing a very higher amount in marketing by using internet. However, the results from these activities are vey low but the cost implied on these online activities are higher due to which company’s overall cost and cpst per customer is also increasing......................

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