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Medium Profitability Growth

Skooters

#Hospitality
ProHub Comment

This case tests revenue analysis and segmentation strategy. The candidate must identify that declining visits (not rising costs) drive profitability decline, then use per-person spending and market share analysis to determine which customer segment benefits most from a targeted price discount.

Estimated Time 15 minutes
Difficulty Medium
Source Duke
50 / 100
Skooters is a popular nightclub in Durham, NC. The establishment attracts students and young professionals year-round and is especially favored by Duke students. It boasts a well-established in-house DJ and a wide variety of snacks and beverages. However, since 2020, Skooters has been facing declining profits. Their management has approached you to analyze the reasons for Skooters declining profits and develop suggestions to reverse this trend.

Clarifying Information

  1. Skooters has two primary sources of revenue: 1. Entry fees of $10 per person 2. Beverages and Food
  2. Their goal is to reverse the trend of declining profitability and restore profit levels to those of 2019
  3. There is one other large competitor in Durham as of now: Froot. We have limited information on their profitability as of now.
  4. Skooters is open all days of the week from 7pm to 2am. However, it is busiest on Fridays and Saturdays.
  5. The menu consists of popular bar foods such as fries and nachos. Other popular attractions include upstairs seating and pool tables.