MGT 11- Principles of Management A7

Concluding Case Study: THE

WALLINGFORD BOWLING
CENTER

Submitted to: Sir Bhosx Marlo Novino

(KAMO NA BAHALA ANI NUR members or
unsa pa ^_^ )
THE WALLINGFORD BOWLING CENTER

A group of 12 lifelong friends put together $1,200,000 of their own funds and built
a $6,000,000, 48-lane bowling alley near Norfolk, Virginia. Two of the investors
became employees of the corporation. Ned Flanders works full-times as general
manager, and James Ahmad, a licensed CPA, serves as controller on a part-time
basis.
The beautiful, modern-day facility features a multilevel spacious interior with three
rows of 16 lanes on two separate levels of the building, a full-service bar, a small
restaurant, a game room (pool, videogames, pinball), and two locker rooms. The
facility sits on spacious lot with plenty of parking and room to grow.
The bowling center is located in the small blue-collar town of Wallingford. There
is no direct competition within the town. The surrounding communities include a
wide-ranging mix of ethnic groups, professionals, middle-to upper-middle-class
private homes, and apartment and condominium complexes ranging from singles to
young married couples to senior citizen retirement units. Nearly 200,000 people
live within 15 miles of Wallingford.
The bowling center is open 24 hour per day and has a staff of 27 part- and full-time
employees. After four years of operation, the partners find themselves frustrated
with the low profit performance of the business. While sales are covering expenses,
the partners are not happy with the end-of-year profit-sharing pool. The most
recent income statement follows (see *Figure A):
*Figure A

Sales
CGS
GM
Operating expenses
Mortgage
Depreciation
Utilities
Maintenance
Payroll
Supplies
Insurance
Taxable income
Taxes
Net income

$1,844,000
315,000
1,529,000
1,466,000
460,000
95,000
188,000
70,000
490,000
27,000
136,000
63,000
19,000
$ 44,000

The bowling center operates at 100 percent capacity on Sunday through Thursday
nights from 6:00 p.m. until midnight. Two sets of mens leagues come and go on
each of those nights, occupying each lane with mostly five-person teams. Bowlers

from each league consistently spend money at both the bar and restaurant. In fact,
the mens leagues combine to generate about 60 percent of total current sales.
The bowling center operates at about 50 percent capacity on Friday and Saturday
nights and on Saturday morning. The Friday and Saturday open bowling nights
include mostly teenagers, young couples, and league members who come to
practice in groups of two or three. The Saturday morning group is a kid league,
ages 10 through 14.
There are four womens leagues that bowl on Monday and Wednesday afternoons.
Business is extremely slow at the bowling center on Monday through Friday and
Sunday mornings, and of the afternoons of Tuesday, Thursday, Friday, Saturday,
and Sunday. It is not uncommon to have just three or four lanes in operation during
those time periods.
The owners have taken a close look at the cost side of their business as a way to
improve profitability. They concluded that while the total operating expense of
$1,466,000 might appear to be high, there was in fact little room for expense
cutting.
At a recent meeting of the partners, James Ahmad reported on the result of his
three-month-long investigation into the operating cost side of other bowling alleys
and discovered that the Wallingford Bowling Center was very much in keeping
with their industry. James went on to report that bowling alleys were considered to
be heavy fixed cost operations and that the key to success and profitability lies in
maximizing capacity and sales dollars.

Questions:

1.

Apply the decision-making process described in the chapter to this case. What is
the major problem facing Wallingford? List five specific alternative solutions that
could be implemented to solve that major problem.

2.

As general manager of this company, how could you utilize and manage the
group decision-making process and technique to improve company profits? Which
employees would you include in the group?

Answers:
1.)
The major problem facing Wallingford is they had built The Wallingford
Bowling Center in Wallingford which has nearly 200,000 people in there. But after
four years they just earned low profit of their business. The Wallingford bowling
alley faces the opportunity to increase their profitability and simultaneously attain
a larger return on investment. Through a reengineering process Wallingford
bowling alley will drastically improve profits through promotions and cost
control. There are several opportunities facing Wallingford that we will examine
and analyze to determine the most effective course of action needed to achieve our
goals.
To help appeal to their consumers, Wallingford needs to enhance their
image as well as their accommodations. With the addition of customized bowling
balls to fit the needs of their customers, Wallingford would be able to bring in a
new market looking for these higher end products. Also, by creating a more
appealing menu to offer the residents of Wallingford they could potentially bring
more customers that are interested in dining out. This could also create a new
customer base for potential marketing.
After looking at the times at which they are doing business as well as the
reported expenses we were provided, we believe that there is a huge opportunity to
cut costs by closing the top half of the bowling alley from the hours of 1am until
noon. The following is a chart showing the large amount of expense that labor
takes up at Wallingford (see *Figure B):

Monday

Tuesday Wednesday Thursday Friday

Saturday Sunday

1:00
2:00
3:00
4:00
5:00
6:00
7:00

Slow

8:00
9:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00

Womens
League

Womens
League

17:00
18:00
19:00
20:00
21:00
22:00
23:00
24:00
*Figure B

Mens Bowling
100%

Open Bowling
50%

MB
100%

I: Identifying and diagnosing the problem:

We should know what kind of the problem that facing us. Remember evidencebased: Put the business on the market to gauge. Evaluate Customer Feedbacks.
SWOT analysis against competition (See *Figure C).

*Figure C

Strength:
Location
Mens League

Opportunities:
Tournaments
Restaurant and Snack bar
High School Partnerships

Weaknesses:
High Operation Cost
Low Profit
Has more unused space on idle

Threats:
The presence of other leisure
activities in the area e.g. Bars,
Movie Houses.

Strengths
The WBC (Wallingford Bowling Center) is located in a highly urbanized
and populated area, in which we could benefit a lot, because mostly of the people
in the area are middle to upper-middle class societies which finds enjoyment in
bowling. Also is 100% fully operational during Sunday to Thursday nights,
because of the Mens League, where all of the lanes are fully occupied.

Weakness
WBC has been operating for four years, which is enough to make a name
and brand in the area. Yet the Bowling Center is still getting low covers during
morning time, and generates a little or low profit. Also, WBC is operating 24/7 in
which makes it inefficient because the alley has no or low covers during midnight
to noontime, which can generate a higher operation cost. The WBC also has a large
unused lot which is in idle or just used only for parking area, which doesnt proves
its since the bowling alley doesnt have that much customers which can use up all
of the parking lanes.

Opportunities
The WBC could have a partnership with high schools that would cause an
increase in high school tournaments being held at Wallingford. This would bring
in hundreds of people on an annual basis and increase profits for food, drink, and
merchandise.

Threats
Like in any business there are always substitutes for your consumers. In this case
substitutes for Wallingford would be movie houses, bars, and community events.

II: Generating alternative solutions:

1.

We will close during slow times.

Pros: It would minimize operation cost.

Cons: It would lead walk-in customers to not come in the alley, since we are mostly full during
evening.

2.

We use the extra space to generate income by renting or hosting social

events, birthdays, etc.

Pros: It would be an effective and efficient way to maximize productivity.

Cons: It would take away a lot of parking areas which could be a possible problem.

3.

We will have a partnership with schools, which would get us tournaments

and returning customers.

Pros: It would give us tournaments which we can get a lot of revenue, not just from the lanes, but
also with our snack bar and restaurant.
Cons: We should give discounts and promotions to the students, which could be a loss for our profit.

4.

We will make promotion and discount

Pros: It would get us a lot of returning customers.

Cons: It could be a loss for us. Since discounts and promotions might get us a little or low profits
e.g. Vouchers, etc.

5.

Take one day of the weeks with one of the slow times and have a game
night that targets young patrons in music choice, food, different
competitions, prizes, etc.

Pros: It is a nice alternative which targets the young generation (Gen Y) to come and get interested in
bowling which could get us a lot of returning customers and get high covers.

Cons: We need to give up either one night from the Open Bowling night that has a 50% operation
functionality, which is a great risk.

III: Evaluating alternatives:

We should evaluate with careful thought and logic which solution will be the best.
Making the choice, we will choose that we will have a partnership with schools,
which would get us tournaments and returning customers.
Implementing the decision, Now that we have made a choice, that doesnt mean
we should stop there. We will see and evaluate our decision and its proper
implementation.
Evaluating the decision, we must manage and properly supervise our decision. If
having partnerships with schools is really the best decision, then, we shall stick
with it. Or if this choice is a bit risky we should experiment and try other
alternatives mentioned before.

IV: Conclusion
Our group would conclude that we would choose to have partnerships with schools
which would get us tournaments. Since, it would get us a lot of customers not only
in the lanes but also in our snack bar and restaurants. Because, every time we are
having a tournament, it would have a big audience who gets hungry, this generates
profit. Also, Every time there is an upcoming tournament, people who would join it
would be practicing in our alley, which gives us returning customers. Also, having
a partnership with schools allows us to be advertised to the whole town. That we
are here, that the WBC exists, which would get us customers. Its a win-win
situation if this is the alternative that we choose.

2.)
We will manage the group decision-making process to improve company profits. So,
firstly the leader should avoid dominating the discussion or allowing another
individual to dominate. Second, the leader will introduce constructive conflict.
Introducing constructive conflict is legitimate and necessary responsibility of all
group members interested in improving the group decision-making effectiveness.
Third, encouraging creativity because creativity is more than just an option; it is
essential to survival. Allowing people to be creative may be one of the managers
most important and challenging responsibilities. The last, brainstorming; the group
is encouraged to say anything that comes to mind, with no one exception: no
criticism of other people or their ideas is allowed. Because of that, we can
effectively capitalized on the potential advantages of using group to make a
decision
1.
The group will have larger pool of information.
2.
The group will have more perspectives and approaches.
3.
Stimulate intellectual stimulation.
4.
People understand the decision.
5.
Motivates people are committed to the decision.
If we want to improve our company profits we will choose the employees which
are:

Responsible

Committed to work

Diligent

Friendly

Precursor

Honest

Innovative

Creative

Hardworking

Willing to work overtime

Effective

Efficient