Philadelphia, PA

Phillip DelRossi & Ian Williams

Dave and Buster’s Inc. Philadelphia

6 April 2017

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 Table of Contents

Opening Statement…...………………………………………………………………………Pg. 1

Mission Statement……………...…………………………………………………………….Pg. 1

Vision Statement…………..………………………………………………………………....Pg. 1

Values & Goals……………………………..………………………………………………..Pg. 2

Demographics……………………………..……………………………………………….Pg. 2-4

Psychographics..………………………………..…………………………………………Pg.4&5

Marketing Situation……………………..…………………………………………………Pg. 5-7

Strengths……………………………………………….…………………………………Pg. 8&9

Weaknesses……………………………………………………………………………….Pg. 9-12

Opportunities….………………………..……………………………………………….Pg. 12-13

Threats………………………….………….…………………………………………....Pg. 13-14

Part B: Opportunity………………………...…………………………………………...Pg. 14-16

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 Table of Figures

Figure 1. Millennial Spending Habits.………………………………………………….……Pg. 3

Figure 2. Generation X Spending Habits …..………………………………………….…….Pg. 3

Figure 3. Discretionary Income Spending...……………………………………....................Pg. 6

Figure 4. Discretionary Income by County.…………………………………………..……...Pg. 7

Figure 5. SWOT Chart…………………………………………………………………..…...Pg. 8

Figure 6. Lucky Strike & Dave and Buster’s Comparison ……………………………..….Pg. 11

Figure 7. Philadelphia Visitor Volume and Spending……………………………………...Pg. 14

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 Dave and Buster’s (D&B) is a publically traded “eatertainment” business that offers food,

drinks, and entertainment for its patrons. Dave & Buster’s currently has 80 plus locations all over

The United States and Canada. With having locations in both the United States and Canada,

Dave and Buster’s strives to retain and continue the practices of David “Dave” Corrineau and

James “Buster” Corley, the founders. Dave & Buster’s unique offerings targets a well-defined

market. Dave & Buster’s also has a mission, values and goals that keep them aligned with their

desire for success. Dave & Buster’s just like other companies have Strengths, Weaknesses,

Opportunities, and Threats that they encounter each day of operation.

Mission

Dave and Buster’s mission lays the ground work for each restaurant to live up to the

standards in which Dave and Buster set out when they opened their first restaurant in 1982 in

Dallas, Texas. Their mission statement reads as follows: “At Dave and Buster’s, our mission is

to create our Guest’s first choice for frequent fun through the best combination of the latest and

greatest games, ultimate sport-viewing, extraordinary food and remarkable drinks.”

(Dave&Busters.com)

Vision Statement

The vision statement states direction that the company wishes to pursue for the future. Its

helps to keep their goals in line and what they hope for in the future. Dave & Buster’s doesn’t

have a set vision in place. A possible vision statement for them could be “Working as one to

continue being the leading food, beverage, and gaming entertainment venue in the United States

and to continue growing into foreign marketplaces by continuing to abide to our values.”

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Values/Goals

Dave and Buster’s has four main goals that are upheld in every restaurant. Their first

value is “fun to the core”, at Dave and Buster’s they want to show customers a great time and

make sure that everyone is having fun whether you're a staff member or a customer. Their

second value emphasizes the idea that “everybody is somebody”, this value tends to hit more

with their employees, at Dave and Buster’s it's important to know that no matter who you are

you're important to the company. All employees contribute to the success of the company.

Their third value is “you got it” attitude, which means that they have positive energy at all times.

Finally, all employees must embody the founders’ spirit. They want you to have passion, pride,

and drive just as the founders did because that's what makes the difference. The purpose of this

situational analysis is to explore the goals, target market, and SWOT analysis of Dave and

Buster’s.

Demographics

Demographics are based upon dividing the market into groups based on variables such as

age, life cycle, gender, income, religion, race, and many other variables. By targeting a unique

market compared to other establishments that offer both food and entertainment, Dave and

Buster’s has been able to thrive for the last 20 years. Many eatertainment businesses focus on

young families, which include adults who consume alcohol and young children who would play

the games at the establishment. Dave and Buster’s, however, focuses on the 24-44 age group. In

order to maintain this target market, Dave and Buster’s promotes their “Big on Business”

Campaign, which attempts to book conferences, product introductions and office parties at local

restaurants.

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 Dave and Buster’s Penn's Landing they has a specific target market, which is millennials.

Analyzing the target market of millennials is important especially in terms of spending habits.

When you’re targeting a certain market, you want to know how much that specific group spends.

Millennials have much different spending habits than past generations like Generation X for

example which are the generation right above Millennials. Millennials unfortunately tend to

spend less on entertainment compared to age groups that are before them. The charts below show

the difference between millennials and generation x’s spending habits. They spend differently on

eating out and entertainment, millennials spend less in both factors (see Figure 1 vs Figure 2).

The exact numbers in which were retrieved from the U.S Department of Labor’s statistics on

spending habits showed that the average millennial spends 1000 plus dollars less on

entertainment yearly then generation x does (www.dol.gov). With millennials spending less on

entertainment it could stage an issue for Dave & Buster’s. From information stated above,

millennials have thin pockets they tend to be careful when it comes to spending.

Figure 1. Millennial Spending Habits Figure 2. Generation X Spending Habits

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 Spending isn’t the only thing that needs to be considered when focusing on a target

market. Millennials also tend to have short attention spans. According to a study done by

Microsoft in 2015 they stated that, “the average millennial’s attention span in this wild world of

technology and social media is down to eight seconds” (USAtoday.com). An attention span of 8

seconds is about equivalent to the attention span of a goldfish. Due to this trait, D&B is

continuing to add new games and entertainment up to three times per year to help keep their

customers attention.

Psychographic

Psychographic divides the market based on segments such as social class, lifestyle, and

personalities. The psychographic of Dave and Buster’s customers is a complex one. Focusing

mainly on the lifestyle psychographic. These adults still want to feel young and relive and

prolong their youth. While wanting to continue being young at heart, these patrons also want to

remain in an adult atmosphere. In consideration of this, Dave and Buster’s has strict rules

regarding when those under 21 years old are allowed in the restaurants. For example, before

10:00 pm, people of all ages are allowed to dine and play at all Dave and Buster’s. However,

after 10:00pm, all patrons at the restaurant must be 21 years of age or older, unless they are with

a guardian of at least 25 years of age. On top of this, patrons must conform to the strong dress

codes. In all Dave and Buster’s, hats and sunglasses cannot be worn indoors. Moreover, the

wearing of torn clothing and clothes revealing a lot of skin is up to the discretion of the

individual store manager.

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 Also in terms of lifestyles, since they are already reaching millennials you have also have

college students, and young professionals who are apart of that age group. Especially with the

Dave & Buster’s in Philadelphia you have a lot of young professionals, and college students

from nearby universities such as Drexel University, University of Pennsylvania, and Temple

University.

Marketing Situation

For Dave and Buster’s, similar to all other companies, there are both internal and external

forces that shape the company. The micro-environment consists of factors close to the company

that affect its ability to serve its customers. This can include suppliers, competition, and the

public. The suppliers of Dave and Buster’s, including food distributors, beverage distributors,

and game manufacturers, control the prices needed to be charged by Dave and Buster’s to make

a profit. If the suppliers raise their prices for goods and services, Dave and Buster’s, then, must

raise their prices, as well, for their own patrons. Second, competitors within the industry are

constantly vying for customers, which can be stolen from Dave and Buster’s. Finally, the public,

or the customers and potential customers of Dave and Buster’s, have some control over the

company. Dave and Buster’s must cater towards the wants of the customers in order to entice

patronage.

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 Figure 3. Discretionary Income Spending

The pie chart above depicts how Americans spend their discretionary income. According

to the chart, Americans spend 18% or a bit over 9000 dollars of their income on Food and

Entertainment. This number is a great benefit for Dave and Busters. With Dave and Busters

having both food and entertainment they are benefiting from both spending of the above

spending habits.

The macro-environment consists of forces that shape opportunities and pose threats to the

company as well as other players in the micro-environment. This includes economic forces,

technological forces and cultural forces. For better or for worse, the economy has a strong

impact on how many, how much, and how often people are willing to pay for going out for food

and drinks. Dave and Buster’s target audience is young, early career millennials who do not

have a high amounts of discretionary income. When the economy is doing poorly, the amount of

spending by young professionals drops considerably.

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 Figure 4. Discretionary Income by County

The map above depicts the discretionary income of Americans by county. The

Philadelphia area is between $30,000 and $35,000 dollars. Second, with technology advancing

every day, it is imperative that Dave and Buster’s be updating along with it. As new games are

released and new technology is used to play these games to the highest level, D&B must update

and upgrade their systems in order to have the proper platforms for these games. Finally, as

people become more health oriented, people are dining out and drinking less. As the eating and

drinking culture changes within the United States, Dave and Buster’s must pivot their business

model by offering low calorie and low carb meals and drinks to suit the wants of the modern day

millennial.

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SWOT Table

Helpful Harmful

Internal Strengths Weaknesses

- Location - Population
- Established brand - Seasonal Tourism
- Few competitors - Franchise cost
- Technological Advances - Lucky Strike

External Opportunities Threats

- Prime clientele - Economy
- Love of Philadelphia - Football Season
Sports - Diverse menu
- Lack of parking

Figure 5. SWOT Chart

Strengths

Dave and Buster’s business model has a number of strengths, which contribute to the

bottom line. First, there are no Dave and Buster’s locations within an hour of each other

location. Due to this spreading of locations, all customers in the center city area who want to eat,

drink, and play at Dave and Buster’s only have one location to choose from. This increases the

number of customers for the Dave and Buster’s location at Penn’s Landing, benefiting the

restaurant itself and allowing for a better experience for patrons.

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 Dave and Buster’s is an established brand, allowing franchisees to promote their

restaurant with relative ease. Dave & Buster’s is unique in the sense that they offer both dining

and entertainment in one location, which is considered to be a niche market. Dave & Buster’s is

recognized as a national restaurant/entertainment chain in the United States and Canada.

Dave & Buster’s has really differentiated itself from competition by marketing

themselves as a one-stop entertainment experience. Few direct competitors in the eatertainment

market who are able to pull customers away from Dave and Buster’s. Many eatertainment

restaurants focus on different target markets, allowing Dave and Buster’s to almost monopolize

the 24-44 age demographic. Due to this, Dave and Buster’s at Penn’s Landing is able to draw in

large crowds each evening stemming from their target market.

Dave & Buster’s is seeing technological advances that are helping advance their

company. Technology is everything is this time frame, especially within the Millennial Market.

Wearable technology is one of the biggest trends right now like Fitbits, Apple Watches and

Android watches. Dave & Busters is rolling out wearable technology that will replace all the

card swipe technology. The wearable device will automatically come preloaded with five

dollars’ worth of game play. “48 % of wearable technology owners are between the age of 18

and 34” (Nielsen.com). Technological advances like this are helping them retain their target

market of millennials and helping them to advance as a company.

Weaknesses

While Dave and Buster’s has a number of strengths which contribute to its success and

profitability, this corporation does have a number of weaknesses, as well. First, one of Dave and

Buster’s crucial rules for opening a franchise is how dense the population is surrounding the

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restaurant. According to Dave and Buster’s, there must be at least 1 million people within a 10-

mile radius of the restaurant to justify opening one. While this rule ensures that there are always

people in the restaurant, Dave and Buster’s misses out on the less densely populated areas where

patrons may spend money at their restaurants.

Another weakness is that Dave and Buster’s restaurants are subject to seasonal tourism.

Many Dave and Buster’s, including the restaurant at Penn’s Landing, remodeled their restaurant

into a sports viewing arena for football season. After football season, however, much of these

areas are not properly utilized between February and August. If Dave and Buster’s at Penn’s

Landing were to figure a way to use their sports space in a way that draws a similar number of

customers as football season, this could be transformed into a strength.

Third, the startup expense for Dave and Buster’s is high, relative to other franchises,

which limits the number of possible franchises. It costs franchisees approximately $11.5 million

to open a Dave and Buster’s, with 65% of this spent on games and entertainment. By limiting

the affordability of franchises because of cost, they are limiting how many and who can afford to

open a Dave and Buster’s.

Another weakness in which all businesses encounter is competition. Competition is seen

by all businesses no matter what kind of services that they offer or market that they are targeting.

Dave & Buster’s biggest competitor especially in the Philadelphia area would be Lucky Strike.

Lucky Strike offers games, bowling, various foods, and a full service bar. The reason Lucky

Strike is their main competitor is because they have similar target markets and have similar price

points and of course share the same city. Even though competition is a weakness that companies

face they have to analyze and see what sets them apart from the competition.

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 Lucky Strike Dave & Buster’s

- No Loyalty Program - Loyalty Program

- Small Menu - Extensive Menu

- Limited Games - Full Arcade Gaming

- 20+ Venues - 80 + Venues

Figure 6. Lucky Strike and Dave & Buster’s Comparison

There is multiple things that Dave & Buster’s has over Lucky Strike. For example, Dave

& Buster’s offers a loyalty program with their customers to keep customers returning while

Lucky Strike has no program in place. Dave & Buster’s loyalty program offers a lot of perks.

New members will receive 10 dollars in free game play when they purchase 10 dollars in game

play for the first time, members will also receive exclusive offers before anyone else, and it also

offers a mobile app where you can look and reload your power card from the app without

actually having to go to a reload kiosk.

Dave & Buster’s is also beating out Lucky Strike by their very extensive menu, Lucky

Strike does offer food but not as much as Dave & Buster’s does. Lucky Strike offers a basic

menu of about four pages with basic appetizers, salads, and burgers; whereas Dave & Buster’s

offers a full 12 page menu with many different options for food. To keep up with the target

market of millennials a lot of different food options is crucial “Menu customization is an

expectation for Millennials. They value choice and will not be happy with a one-size-fits-all

menu” (TheBalance.com).

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 Lucky Strike is also lacking in terms of gaming. Lucky Strike offers classic games such

as bowling, pool, and billiards whereas Dave & Buster’s offers full arcade gaming that anyone

would enjoy.

The largest thing that Dave & Buster’s has over Lucky Strike is the presence of Dave &

Buster’s. There is only 20 plus Lucky Strikes where there is about 80 plus Dave & Buster’s

within the United States and Canada. Dave & Buster’s has been around a lot longer and formed a

loyal customer base whereas lucky strike has yet to achieve that.

While Lucky Strike is their biggest competitor it is not their only competition. Due to this

branch’s prime location for restaurants and bars, the number of competitors is vast. Some of the

restaurants and bars in the area include Morgan’s Pier, La Peg, Hibachi, and Paddy’s Old City

Pub. These locations are prime examples of competitors because the patrons of all of these

businesses are not only looking for food and drink at an affordable price point, but are also

interested in having an experience, not just dining. These local competitors, while they do attract

customers, do not have the same pull factors as Dave and Buster’s does. By upholding the goals

of the organization, Dave and Buster’s locations are able to thrive.

Opportunities

Like all businesses, there are always opportunities in the market for improvement. First,

Dave and Buster’s Penn’s Landing’s clientele is always looking for the new hot attraction to

spend their few discretionary dollars on. Due to this, it is imperative for Dave and Buster’s to

constantly be researching trends and updating the games and activities at the restaurant. Without

this, the niche that Dave and Buster’s Penn’s Landing holds, will be lost.

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 Second, the citizens of Philadelphia hold Philadelphia sports teams near and dear to their

hearts. In order to capitalize on the love of Philadelphia sports, Dave and Buster’s Penn’s

Landing should invest more capital into Philadelphia sports advertising, games, and decorations.

In doing so, more customers from the Philadelphia area will be enticed to visit Dave and Buster’s

at Penn’s Landing and spend their hard earned money.

Another issue that plagues many D&B around the country is the lack of parking spaces

for patrons. By building restaurants in heavily populated areas, the space for ample parking does

not exist. Unfortunately, a number of paying customers shy away from going to Dave and

Buster’s Penn’s landing on the basis that they could not park their car near the restaurant.

Threats

Unfortunately for Dave and Buster’s, there are a few threats to Penn’s Landing’s

business. First, when the economy is doing poorly, people, especially in Dave and Buster’s

Penn’s Landing’s target market, have significantly less income to spend on restaurants, bars, and

games. This significantly hurts Penn’s Landing’s business, as the 24-44 year old demographic

already does not have ample money to spend on weekend activities.

Second, Dave and Buster’s Penn’s Landing’s busiest season is during the Eagles football

season. During the off-season, though, Dave and Buster’s business drops off notably. Until

Dave and Buster’s can find a source of attraction for millennials and sports fans outside the

football season, Dave and Buster’s income will be lower between the months of February and

August.

Finally, Dave and Buster’s Penn’s Landing has a diverse 12 page menu with choices for

everyone who dines with them. This may seem like a strength, however, it costs Dave and

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Buster’s a significant amount of money to keep the restaurant stocked for all of the dining

options.

Part B: Opportunity

Over the last two decades Philadelphia has considerably increased the number of hotel

rooms booked, and thus the amount of revenue generated. In 1997, Philadelphia filled 2.5

million hotel rooms. This increased exponentially from 4.1 million in 2008 to 8.6 million in

2015. This increase reflects $814m in hotel revenue alone in 2015. Philadelphia hotels can

thank the local Destination Management Organizations for the increased promotion of

Philadelphia. The city was listed as #1 on “Best US Visits of 2015” and was ranked 3rd among

52 Best Destinations, only falling behind Milan and Cuba. Due to the increased incoming

tourists, both restaurants and bars benefited.

Figure 7. Philadelphia Visitor Volume and Spending

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 Philadelphia is a large tourist destination, tourists and their spending has increased

drastically in Philadelphia over the past five plus years in restaurants and bars. Tourists having so

much spending power could be a great thing for Dave & Buster’s. Increased marketing to this

group could increase revenue and profit dramatically with tourist spending power. The chart

below shows how tourism and tourism spending has increased within Philadelphia over the last 6

years.

Philadelphia is a popular tourist destination for millions of travelers around the world,

which can be used by Dave and Buster’s to increase their profits. As tourists entering

Philadelphia increase, the amount of spending increases respectively. Tourists having so much

spending power could be a great thing for Dave & Buster’s. Being located close to the hub of

center city, Dave and Buster’s has an ideal location for both driving, regional rail, and the

subway. Penn’s Landing is frequently visited by local Philadelphia area residents, and tourists,

often, will follow in suit. Increased marketing to this group could increase revenue and profit

drastically with tourist spending power. The chart below shows how tourism and tourism

spending has increased drastically within Philadelphia.

Tourists who visit a new city, are often looking to broaden one’s horizons, but also have a

sense of stability. While tourists may visit the Liberty Bell, or the various museums around

Philadelphia, many will also want to have some familiar go-to’s around the city. Dave and

Buster’s, a national chain, is a perfect safe haven for these travelers. By providing a similar, yet

unique experience, Dave and Buster’s is able to capitalize on tourists being in a new city. As

tourist numbers increase, many still seek some continuity from their place of origin. A majority

of the travelers coming to Philadelphia fall into two main categories. First, young professionals

fit perfectly into Dave and Buster’s target market. These people have some discretionary income

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to spend while traveling for work. Moreover, these professionals want to be in an adult setting,

but still have a sense of youth about them. Second, young families find Dave and Buster’s to be

an ideal location to dine. This eatertainment allows the adults to eat more mature meals and have

something to drink, while the younger patrons can eat meals suited to their age range and have an

arcade to play at afterwards. This provides an ideal environment for young families, so that

everyone is content. By catering to these two markets, Dave and Buster’s can increase revenue

and profit dramatically.

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