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This Powerpoint presentation is the work of Patrick McHugo, student at Bridgewater State University, along with myself, Brendan Cronin. McHugo and I presented this slideshow in our Strategic Management course, to show the steps in the corporate decision-making process. While the details in this document are specific to this music venue idea, the process can be used in determining whether or not to start up any kind of business. This includes: Thorough Environmental Scanning, Strategy Formulation, and Strategy Implementation. If this were an existing business or evaluation criteria were in place, there would also be Strategy Evaluation. This slideshow shows, in detail, the specific charts & steps in making any large, strategic decision. *While I do claim ownership to the Excel-generated diagrams in this slideshow, I do not claim ownership to the other images found in this presentation.
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The Bear CaveA Business Strategy Analysis by Patrick McHugo and Brendan Cronin
History
• Experience/Background
• Discussion
• Proposition
Industry MatrixPr
ice
Strength
Issues Priority MatrixPr
obab
ility
of O
ccur
renc
e
Probability of Impact
Competitive Analysis
• Risk
• Bear Cave
• Differentiation
Bogarts
Broad Street
Charlie Horse
The Bear Cave
• Stage 1 Company, Bridgewater, MA• Partnership, Centralized Decision-Making• Operations performed based on
communication and observation• Performance Criteria- +Sales, -Costs, Progress
towards company goals• Reward-Punishment system- Based on
employee evaluations conducted by owners
Value Chain Analysis
Firm Infrastructure
Partnership, Management Team Consists of Owners, Located in Bridgewater, Massachusetts
Human Resource Management
10 employees- 6 bartenders, 2 cocktail waitresses, 2 bouncers
Technology Development
Third Party Transaction Software, Sound System, Administrative Software Tools
Procurement
Third Party Contract Manufacturers
Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
Obtain Resources from third party contract manufacturers, Seek out new bands and obtain new bands via walk-ins
Storage of incoming inventory, maintenance of current inventory levels, installation and maintenance of sound equipment
In-house transaction sales performed by employees, discounted items for visiting bands, discounted items for promotions
Advertising via local print ads, local radio & BSU radio, online using Facebook
Walk-in service, telephone service, online service via email available
External Factor Analysis Summary
External Factors Weight Rating Weighted Score CommentsOpportunities
Untapped Local Niche Market 0.12 3.3 0.40Customers who seek out Live Music at
a bar can be considered a niche market
College Campus Close in Proximity
0.14 4.6 0.64Bears Cave is within walking distance
to University campus
Few Strong Competitors 0.04 3.1 0.12 2-3 Local Competitors
Several Business Located Close in Proximity
0.08 4.5 0.36Local businesses can be used in
advertising, joint promotions, etc.
Threats
Fluctuating Buying Cycle 0.15 4.3 0.65Sales are high in Fall and Spring, low in
Winter and Summer
Activist Groups Against Alcohol Consumption
0.07 2.2 0.15Organizations (MADD, Robert Wood
Johnson Foundation, CSAP) stigmatize alcohol consumption
Local Band Presence 0.17 3.5 0.60If bands are not forming locally then Bears Cave can lose its niche market
Poor Restaurant Industry Success Rate
0.12 4.7 0.5625% Close or change ownership within
year 1 (Bloomberg)
Low Barriers to Entry 0.11 3.6 0.40Restaurants have low barriers to entry (start-up capital, consumer skepticism,
location, marketing)
Total 1.00 3.88
Internal Factor Analysis Summary
Internal Factors Weight Rating Weighted Score Comments
Strengths
Well-Suited to Supply Niche Market
0.14 4.2 0.59Bears Cave supplies live music instead
of radio, jukebox, etc.
Simple Corporate Structure 0.06 3.8 0.23 Partnership that manages the company
Current Ownership of Liquor License
0.04 5.0 0.20Company has obtained a liquor license
already
Friendly, Effective Employees
0.12 4.6 0.55Employees make customers feel
welcome and result in repeat customers
Strong Relationship with Nearby University
0.16 4.2 0.67Ownership has a strong history with local Bridgewater State University
Weaknesses
New Business 0.12 4.4 0.53Business is new and has not generated
sufficient brand awareness
Inexperienced Management 0.13 4.2 0.55This is the first business either two partners have been reponsible for
operating
Low Capital 0.16 2.7 0.43Low amount of reserve capital for
economic dips
Located in a Low-Populated Area
0.07 3.2 0.22Surrounding area is low-populated during summer or 1/4 of the year
Total 1.00 3.97
Strategic Factor Analysis Summary
Strategic Factors Weight RatingWeighted
ScoreShort Intermediate Long Comments
Strong Relationship with Nearby University
0.16 4.2 0.67 XOwnership has a strong
history with local Bridgewater State University
Well-Suited to Supply Niche
Market0.11 4.2 0.46 X
Bears Cave supplies live music instead of radio,
jukebox, etc.
Inexperienced Management
0.09 4.2 0.38 XThis is the first business either
two partners have been reponsible for operating
New Business 0.10 4.4 0.44 XBusiness is new and has not generated sufficient brand
awareness
College Campus Close in Proximity
0.14 4.6 0.644 XBears Cave is within walking
distance to University campus
Untapped Local Niche Market
0.13 3.3 0.429 XCustomers who seek out Live
Music at a bar can be considered a niche market
Fluctuating Buying Cycle
0.15 4.3 0.645 XSales are high in Fall and Spring, low in Winter and
Summer
Local Band Presence
0.12 3.5 0.42 XIf bands are not forming
locally then Bears Cave can lose its niche market
Total 1.00 4.09
TOWS Matrix Internal
External
Strengths- Strong Relationship with Nearby University, Well-Suited to Supply Niche Market
Weaknesses- Inexperienced Management, New Business
Opportunities- College Campus Close in Proximity, Untapped Local Niche Market
1.) Use the strong relationship with Bridgewater State University to arrange a deal between the school and Bears Cave. This can include shuttling from the school to the bar, coupons, vouchers, etc., and will build customer base in the school. 2.) Use the bar's strength of being well-suited to supply the niche market of people who go to bars to see live music to tap into this relatively untapped niche market. Advertising this strength will gain market share in this niche market.
1.) This untapped local niche market will respond well to a company that is less aggressive in sales and management as it is with customer satisfaction. Lacking experience and a corporate feel in a company can allow the customer to feel less like a customer and more as a guest. 2.) Having a weakness of being a new business means there's plenty of room for growth. Turn the weakness of being a new business into an opportunity by capitalizing on marketing and advertising tools on the nearby college campus.
Threats- Fluctuating Buying Cycle, Local Band Presence
1.) Use the strong relationship with the nearby University to capitalize on peak buying times. Use promotions and advertising heavily during these peak times to increase sales, which can account for the loss in slow economic times. 2.) Advertise the strength of being well-suited to supply a niche market across the Bridgewater and Boston area. If local bands become scarce, there is a greater chance of new bands inquiring about playing at the Bears Cave if this strength has been communicated properly.
1.) Shorten business operating hours during periods of low economic activity. This will decrease the fixed costs and variable costs for that time while allowing management management the time to analyze past business strategies and formulate new strategies. 2.) Offer discounted products and services to bands that play the venue. This will minimize the weakness of being a new business by increasing the use of the facilities and avoid the threat of scarce local bands by increasing overall satisfaction from prior bands.
Recommendations
• Stay Ahead of Competition• Advertisements• Differentiation- Shuttle Service
ImplementationMarket Penetration Strategy
Brendan Cronin• Develop promotional offers
geared towards students of Bridgewater State University
• Launch advertisement campaign that covers Bridgewater to Boston area.
Patrick McHugo• Organize shuttle service
schedule in coordination with BSU transportation department
• Differentiate actual Bridgewater location by layout of bar and live music scheduling
Action Plan
• Patrick- Begin coordination with Bridgewater State University transportation department immediately. Contracts and set scheduling must be completed no later than 8/31/2012 (4 months). Contingency plan- hire 3rd-party transportation service for Fri/Sat nights until solid plan can be worked out with school system.
• Patrick- 3 months of live music must be scheduled in advance of beginning of academic year, 8/31/2012 (4 months). Contingency plan- Cut live music times down to 1 weekend night until more acts are hired.
Action Plan (cont.)
• Brendan- Promotional advertising campaign begins on 6/31/2012 (2 months), exact advertising copy and promotional offers ready by then. Contingency plan- coordinate with BSU marketing department to develop advertising campaign for Bear Cave in return for student credit/monetary compensation to Bridgewater State University.
