Sugar Bowl.pdf Kinard gA4Z7 Susiness FolicY Sufulr Bowl Case Questions: o What challenges does Shelby Givens Face: o During Phase L (Preparing for the Transformation) o During Phase 2 (Renovation and Grand Openingi( o During Phase 3 (701'L12012 Operations) . By the end of the case, what has Givens done to address the challenges outlined at each stage listed in Quesiion (1) above? . Which of the actions executed by Givens were most successful in resolving the challenges? Which were least successful? What other options might Givens have p u rsued ? o ls Sugar Bowl a viable business? Which forces have the most positive, or negative, impact on the business's profitability. r What is the daily breakeven number of customers required Q3, 2011. What is it by the end of Q1 2012? o Givens considers two paths for Wednesday night entertainment: league bowling and exclusive brand rights o Which option will generate more revenue in the short term? Long term? o ls revenue how success should be measured? Which path'do you think is best for Sugar Bowl and whY? o How should Givens evaluate the investor's offer to buy the business, and the New York consulting opportunity that's offered to her at the end of the case? Consider both financial and Personal goals. o Once Sugar Bow's financials are more stable, what changes could Givens make to build a stronger organization and culture? tl HARVARD i BUS IN ESS i SCHOOi.ll -,j i^ii;1,i,1 RlCH,ARD G. HAMiR}"IES;j .iI ]5A ZALOSH Sugar Bowl Shelby Giyens checked her u'atch as she jogged along Raleigh's Greenway Trail; she u'a'q rurrning iate agairL, Since Sugar Borvl's iaiinch, there simpiy rt'ere not enough hours in the day to saiis$r the orr"t1Jh.k.itlg dernands on her tine. Givens couldn't remember ihe last tirne she went to dirurer aI'id a movie rarith friencis. And ',hough ihree monits had passed, she stilI deeply regretted missing her coliege roorrunate's r,,'edding becau,se of an unaniicipated staffing crisis- Givens had thought "*rat by now, April 2A77, a full year after ttie bou'ling lounge's opening, her fast-paced ald sometimes sleepless enkepreneur:ial Life rvould be slorl'er, or at ieast more predictable- But that simply wasn't the case. Givens loved Raleigh and her job-malagirrg her fanrilf s borvlins legacy was tkilhng, professionally reu'arding, arrd potentially lucrative. Profits were on the rise (See Exhibits 1 and 2 for Sugar Bo'it4 financia,l statements) but the conlinual personal sacrifice was starting to \^7ear on her. Was this horv she wanled to spend the remainder of her twenties? On the other hand, n'hat job rt'ould ever be as fulfilling or as srimulalirg as the one she had now? Sugar Bou'l's board meeting rtras fivo weelcs arvay, scheduled for April 3A,2072. Givens had some exciting opportunities to present to her investors. lt t'as irnperative, though, itrat she work through her orvn priorities-financia-l ald othenv-jse=in advance of that meeiing. \Virat was best for ...

1. Sugar Bowl.pdf
Kinard gA4Z7 Susiness FolicY
Sufulr Bowl
Case Questions:
o What challenges does Shelby Givens Face:
o During Phase L (Preparing for the Transformation)
o During Phase 2 (Renovation and Grand Openingi(
o During Phase 3 (701'L12012 Operations)
. By the end of the case, what has Givens done to address the
challenges outlined at each
stage listed in Quesiion (1) above?
. Which of the actions executed by Givens were most successful
in resolving the
challenges? Which were least successful? What other options
might Givens have
p u rsued ?
o ls Sugar Bowl a viable business? Which forces have the most
positive, or negative,
impact on the business's profitability.
r What is the daily breakeven number of customers required Q3,
2011. What is it by the
end of Q1 2012?

2. o Givens considers two paths for Wednesday night
entertainment: league bowling and
exclusive brand rights
o Which option will generate more revenue in the short term?
Long term?
o ls revenue how success should be measured? Which path'do
you think is best for
Sugar Bowl and whY?
o How should Givens evaluate the investor's offer to buy the
business, and the New York
consulting opportunity that's offered to her at the end of the
case? Consider both
financial and Personal goals.
o Once Sugar Bow's financials are more stable, what changes
could Givens make to build a
stronger organization and culture?
tl
HARVARD i BUS IN ESS i SCHOOi.ll
-,j i^ii;1,i,1
RlCH,ARD G. HAMiR}"IES;j
.iI ]5A ZALOSH
Sugar Bowl
Shelby Giyens checked her u'atch as she jogged along Raleigh's
Greenway Trail; she u'a'q rurrning

3. iate agairL, Since Sugar Borvl's iaiinch, there simpiy rt'ere not
enough hours in the day to saiis$r the
orr"t1Jh.k.itlg dernands on her tine. Givens couldn't remember
ihe last tirne she went to dirurer aI'id
a movie rarith friencis. And ',hough ihree monits had passed,
she stilI deeply regretted missing her
coliege roorrunate's r,,'edding becau,se of an unaniicipated
staffing crisis-
Givens had thought "*rat by now, April 2A77, a full year after
ttie bou'ling lounge's opening, her
fast-paced ald sometimes sleepless enkepreneur:ial Life rvould
be slorl'er, or at ieast more predictable-
But that simply wasn't the case. Givens loved Raleigh and her
job-malagirrg her fanrilf s borvlins
legacy was tkilhng, professionally reu'arding, arrd potentially
lucrative. Profits were on the rise (See
Exhibits 1 and 2 for Sugar Bo'it4 financia,l statements) but the
conlinual personal sacrifice was starting
to ^7ear on her. Was this horv she wanled to spend the
remainder of her twenties? On the other
hand, n'hat job rt'ould ever be as fulfilling or as srimulalirg as
the one she had now?
Sugar Bou'l's board meeting rtras fivo weelcs arvay, scheduled
for April 3A,2072. Givens had some
exciting opportunities to present to her investors. lt t'as
irnperative, though, itrat she work through
her orvn priorities-financia-l ald othenv-jse=in advance of that
meeiing. Virat was best for Sugar
Bowl rvasn't necessarily best for Givens. Or rt'as it?
Background

4. After graduatir-Lg from business school in 2009, Givens rei-
umed to her naiirre Raleieh, NC to
implement a hrrnarou-nd of Westlake Lanes. The aliing
setrenties-st1,le borvling business was started
by her deceased grardfather, Dane Sugar, in an oid mill in
downtowl Raleigh. Cuided by an
entrepreneurial spirit ald interest in general ma:ragement,
Givens tightened cost controls and
strea-rrr,lined operations. in just mne months Gir.'ers stopped
Westiake's spiraling }osses ald even
eamed u s*ull profit. Yei Givers questioned Westiake's ability
to sustain healthl' profits over the
Iong term, due to a nrirnber of social and environmental factors
(see Appendix), including:
' fhe de,clining popularity of rveekly "leagae" bowling teams
. The aging popuJation of regulars
" Marginal revenue from iestlake's limited food and drink
menu (pizza and beer)
. Coniinually rising healthcare and utilities costs
HB-c profesu Ridrad G, Hmmesh and uritq Alisa Zalmh prepued
this i]ffi soleiy as a t'a$s for dass dirusion od not as m
odorremmt, a souce o{ pnmary data, or m illu.lraijon of effe*ive
or iaef{ective ]]:6agemsl SJibough based on real evoc md
dePite
EcasioMl retsmcs to actual compmis, this c+e is fictitiou md ay
eemblance to actual pemoro or mtiiie is cojnddnbl
Cop;,right @ 20i2 preidmt md Fello*'s of Hanard Coliege. To
order copia or reguesi?emisdon to PProduce maiedals, cali l-
8OG54f7685,
q,rite frm,ard Buinas Publishhg, Bosto& MA 02163, or go to
hitpr/ll'm')rbsp.haruad-edu This puniication Fay rioi be
ciigitiad.

5. photocopied, or otheffise reproduel, p6te4 or kffimitted, u.iiioui
t}.re lEnission of Ho ard Buines School.
913-537 I SugarBowJ
' Increasing forms of competitive farnily entertainment
. Less free "famiiy" time due to dual income families ald
oversc-heduled kids.
IrL March, 2010 Givens persuaded l{estlake's board to pursue a
different path for Westlake: to
create a lively and pJush bowling lounge and nightciub.
IrLstead of bright lights, an oLd juke-box and
a menu consisting of przza, hot dogs arrd beer on tap,
crrstomers would enjoy a full bar, table sen,ice
and a tapas-style menu of small plates and contemporary finger
foods. The lack of any direct
competition in Raleigh, paired with Raleigh's ongoing
gentrification and influx of young
professionals,i led Givens to believe a market existed for such a
renue. She even had a name to
propose for the reconceived business: Sugar BowI.
Before his death in 2008, Dane Sugar upgraded 4/estiake's lane
machinery and scoring
technologv. Givens u'anted to updaie the outdated 16,000 square
foot interior, reconfiguring the
space to foster casual dining and socia-lizing, as vr'ell as
bort'ling, for 150 people, neariy doubling
capaity.2 She believed that revenue levels from the new
business u'ould support significant jumps
in costs, such as rent and insurance.
GiverLs projected she r,r.'ould need $600,000 to renovate the

6. bowling alle,v, and forecasted an
additional $100,000 for starbup costs arrd incidenials. She
raised $200,000 in the form of convertible
notes from friends and family, and secured a 5400,000 SBA
loarL from a local bank. Both loans were 5
years in lengthL, commanded 8% interest, and required
quarteriy interest-only payments with the
principal to be repaid rn ful1 at the end of the terrrL. The balk,
howerrer, listed additional terms;
failure to comply would result in rate renegotialion or a
truncated ioan term.
Loan Terms:
1. Givens provided her home, a downtown Raleigh
condorninium, as loal collateral,
2. The venue must open no later than 15 months post-funding.
3- Aclual revenue must reach 7A% of projected rerenue (or
$1,000,000) after four operatilg
quarters.
Though $100,000 short of her fundraising goal, Givens reasoned
thaf with a rigorous approach to
cosi malagement, she couJd navigaie ihe shorL{aU.
Westlake taught me that to be profitable in ihis busiless you
need to provide cornpelling
entertairmrent and closely watch expenses. U customers enjoy
iheir experience they'11 return with
thejr friends-that is the cheapest and most effective form of
markelilg. But no cosi should be
overlooked. Spending just an extra nickel per customer adds up
when volume arrd customer
lurnover are high,

7. Phase I: Preparing for the Transformation (Summer 2010)
I learned at Westlake the priceless value of asking for heip-from
friends and colleagues, suppliers,
and professional contacts- I kept that in mind as I embarked on
Sugar Bowl's launch.
1 Bet*een 2000 and 2010, Raleigh's popuJation greN'bv 46-3"/"
to 4M,000. lts median age rcas 31.9 and t}ose aged 2i-44
accomted for one *rird of ilre popuJation Forty-sevm perce.rt of
residents 25 years or older possessed a college degree (or
higher). Source: US Cersus: http:/./ quickfacts.census.gov
/q{d/states/37l3755000.htrn1
2 Due to change in busiress, rmt for the space h,as renegotiated
md iaaeasecl by 60%-
BRIEFCASES I HARVARD BUSINESS SCHOOL
SugxBowl | 9L3-537
Em1sloyees
Givens anticipaied it v,ould take 9 montls to a year before
Sugar Bon'l rqas operational. She
pla-nned to close{esttake, which was generating weekly
revenues of $f 5,000, in November, 2010 for
iour months of renovations- Three fuIl-ti-n-re employees
remained from Westlake:
Salary Responsibility TenureEmployee
Gary Spalding (50)

8. Shirley Smith (41)
Daniel Sinclair (27)
$40K Maintenance of glo'unds, buildi.irgs & machinery
$31K Back office, sales and marketing
$24K Kitchen/bar supplies, cooking and sewing food
15 yrs.
23 yrs.
10 yrs.
For employees, a Sugar Bowi trarsition would mean later hours,
more crstomers arrd higher
ser'ice exiectations. Oithe th,ree fu1l rime employees, gnly
Spaldrng expressed sincere inierest in
working through the transformation- Givens was not ready to
invest in any nerv hires jusi )/et, so out
of necelsiq, shl designated Smith, a longtirne employee fa:rtiliar
with {estlake operations, manager
r:ntrl the te*po.ury Jose- Though Smith required frequent
direction she u'as irustworthy and loyal'
Researcll
Before proposing tlre bon,iing lourige StrateSl to Westiake,s -
board,
Givens spent eight weeks
analyzing io.ut unJnuUonwide markerdata and consumer trends

9. related io bowling and evening
entertainmmt, Ttds research provided a solid for.urdation for
the assumptions Givens used to craft
pro-forma tinancials for Sugar Bort'l il March,2010'
Aware of the difference between crafting a strategy- arid
execudng a vision, Givens sought arL
operational mentor. Tirrough a former business colleagug
Givens was introduced to Michaei Burke,
th" gur,.rul manaser of "Hlgtr Rollers," a trendy bowLirtg venue
iocated in the heart of Washington,
o.C] after u;1 ir.1rtiul phonJconversation, Burke agreed to meet
with Givers in Washington, and to
provide her with a generous share of inside business
irrformation-
High Rollers exemplified the r.ision i'd porn'ayed to my
investors," Give.ts recalled- "r,'Vlren I
q,uiked in on Thursday night ai 10pm, it u'as packed with young
professionals; most seemed to be
jn their hvenlies and e"rly thirties- The iighting was dim, the
music r'r'as loud; many Pakons were
bowiing, others eating, ,t*" were dancing, and alt were
dri::rking- I was str-uck by how mtrch
people were wiiling to pav for the experience'
Like Sugar Bowl, the tligh Rollers facitity held 16 bolvling
lanes- Burke told Civens that the
average customer spent $62-50 per rzisit, with 50% of revenue
from alcohol, 30% {r-om food, arrd 20%

10. f.om larre admission. Fees for bott'iing were charged by the
horir i;rstead of by the game (shoe rental
was free). High Roller's gross profit margrn in 20A9 w'as70"k'
Burke credited cost-effectirre online marketing, word of mouth
"buzz," and prirrate event sales
efforts 1a ith High Rollers' corrsistent and robust revenue
stream. High Rollers collected email
addresses for er-ery crutomer and sent monthly special offers
and "refet a fi-iend" iicentives to them
to drive ,"p""t ur,i nerv business. A part-tirne event planner
cold-called targeted companieq to pitch
private events for slorver v'eelrrights.
ln Burke, Gir.'ens folnd an experienced mentor. She proposed a
standing monthly phone caJt and
Burke agreed r.t'hen she made the following offer: "lJ I pu1l
thjs off in Raleigh I will rehrrn the favor
b), cu11l11g you every month to tell you about ne-w concepts
that are ilcreasing my revenue and
imp rovin g my margin-s. "
HARVARD BUSINESS SCHOOL I BRiEFCASFS
913-537 I SugrBowl
Desigtt

11. Before speaking rt'ith any design professionais Gir.ers analyzed
the table and bar configurations
that would provide greatest profiiabrlity for a 150 capacity. She
decided thaf in addition to piush
seating and tabies at each lane's end, she v'ould order 25 two-
person tables and one pool table for the
rear third of the building's space. Flexibi.lity to reconfigure the
space for small groups, iarge groups,
and private errents r+'as critical.
Civerrs so[cited quotes from three professional Raleigh design
firrrs for Sugar Bowl's renovation-
Estirnates ranged from $500,000 to $750,000, with fifteen
percent of total project costs attributed to
design fees.
I was always ihinking about how to shave costs- Who might
value the opportunity to u'ork on
Sugar Bowl for belora'-markei rates? Tu'o Raleigh universities
offered degrees irl Architechre and
Design. I contacted the deans, proposed our project as al
independent study and r.t'as contacted by
several teams o{ graduate students wiiiing to work rt'ith me for
three srlmmer months at no cost in
reiurn for academic credit- Though I'd be more involved in the
design, I'd save arould $90,000 and
thai was u'orth it to me-
The team that impressed Givens most also mirrored her desired
demographic. She also hired a
licensed architect to revielv design and architectural plars,
ensuring they rvere in iine with current
safety and building codes. The plans were ready by October,
and she selected a general contractor,
Mj.ke I{alker, whose estimatelvas 25% less than compelitirre
estimates. A/hat Walker lacked in

12. experience (his business was just 3 years old) he made up for
u'ith enthusiasm; he u'as willing to
subsidize his labor for the opporllnity to u'ork on a hi.gh-profile
downtomr project and to display
signage on Sugar Bowl's exterior.
Food €t Beaerage
Civens recognized that Sugar Bo*'1 possessed an extremeiy
vulnubt" grandfathered asset be;.6n6
bowling la-nes: a state-'issued liquor License and cor:nty permit
to serve not just beer but the full range
of alcoholic beverages.3 But bringing the "right" businesses to
the neighborhood was importalt to
residents and govemment officials. They fought strongly against
businesses that posed a threat to
the newly cultivated district-
Sugar Bowl tvas also licensed to prepare and serve hot arrd cold
food onsite. The existing menu of
przza and mainskeam draft beer w'ould be repiaced, but Givens
did not have the furrds to build and
run a fuLl-sewice restauralt facility in the existing space.
Though kiichen inprovements would be necessary, employing
offsite caterers would cost far less
thal the price of a full restaurant kitchen installation. I
partnered wiih a Raleigh iood caterer with
an offuite facility that could prepare tapas-style appetizers and
small piates.
The terms of the caterine contract are Listed belorv.
Cost per menu item
Mini:nun-r order per night
# Catering employees required per night

13. Catering wage
Reguired advance notice for catering estimates
$s.00
300 items
J
$12 per hour
5 days
3Iotggl, Gjvers's grmdfather teminated liquor sen,ice in m
attempt to (1) reduce site damage, (2) deter rou,dy customers,
md (3) reduce insurance costs. The strategy worked md he kept
$re policy in place bdefiniteiy.
BRIEFCASES I HARVARD BUSINESS SCHOOL
Susar Bowi | 9I?'537
Phase II: Renovation (Fall 2010 arrd {intet 2811} and Grand
Opening
(spring 2011)
Westlake closed for renovations in November for four months,
but by December {alker, the
contractor, was alread;r rveeks betrrnd schedule due to the
following:
. Missed deadline {or permit fililg: 3 rveeks
. Deiiverl of incorrect materials/reorder & redelivery: 2 weeks
' Bui-lder staffing shortage: 1 week

14. The Grald Op"r1*g, originally plarrned for early March, ras
now set for the end of April' and
unexpected costs had uit"ud! dirninished Givens' $100,000
"incidentais" budget by $35'000'
Operaliorts:
Each week,s deiay, I calculated, wouid cost me a mjrdmum of
$30,000 in lost Sugar Bon''l revenue
I
ra,as rtorried - about not meeting the bank's timeline for
openrng, about depleting cash resewes,
about the capabili[r of the cona"actor I'd selecied. I figured that
firing him, thoug]1 would noi
speed up the process or save money-
Iliring s General Maruger
Givens recalled:
As spring approached, I designated the second w-eek of
February to hire staff, finalize catering
and
bar menus, and research mirketing options- Bui *ren, another
water pipe burst, city officials
demanded a walk-through and fini design orders needed to be
placed' Despite 18 hour days, I
couldn,t keep up iryith ttr"e demands on *y tim". I desperately
needed to delegaie responsibilities,
immediately, to someone capable of ildependent direction'
Burke recommended one of his former wait staff supervisors

15. and bar maragers, Sarah Pety-, to
GiverLs. Though she lived in Washington DC, Burke felt that
Givens could ltre her to Raleigh
rvith
the right opporiurLity and compensation.
I met SaralL at Sugar Bor,',1 - she was eager for a sta-rt-up, and
I valued her operalional experience
trernendously. pG, we clicked on a persinai lerrel. But I could-
n't afford her current $75'000 salary'
In exchange for a smaller salary of $55,000, Petty requested
authoriLy to mn the caiering and
restaurant operation, a 3% equity stake and a two year contract'
Frankly, it was more ihan I wanted to give up, economical1 Td
personally'
However, I trusted
Bi:rke's recommendation ard my gut instirrct, arrd offered her a
job on her terms, witlt one
stipulation: that her two-year .otttt'I.t would take effeci only
after she met or exceeded specific
goals in the firsi three post-openi-ng montls-
pefly started on March 1"'and i.rrr-rnediatelv began tackling
Givens's to-do list. "Shelby u'as hper-
sensitive to ne r and 'nexpected
costs," said.-Petty. "She asked me to solicit at least three quotes
for
new products alld services, to msure we were getting a fair

16. market price'"
HARV.ARD BUSINESS SCI-IOOL I BRIEFCASES
913-537 i Sugar Bowi
Settirtg Pricing
Civens leaned on Petty's experience to finalize hours of
operation and rates for bowiing, food arrd
beverages-
Hours of operation
Lar-re Rental
Expected # of customer rotations/night
l'{axirnum # of customers
6prn to 2am, 7 days/week
$40 per hour, or $l0/hour per person
,1
150 (or, 450/rught assuming 3 rotations)
Organizational
Givers divided the staff into three divisions- Petty managed
restaurant operations, and Givens
managed bou'Ling operations and sales (including marketing
and events). Both Givers and Petty
agreed that hiring a part-lirne bookkeeper io keep track of

17. receipts ald deposits rvas critical.
Reluctaltly, Givens acknort4edged thai elirninating emplorree
health insurance coverage (whuch had
acconnted tor 72ok of Westlake's fixed experses) was fiscaily
responsible.
Gary Spalding, u,ith his lale machinery experlise, i^/as an
instmmental emplovee She offered
Spalding a raise equal to the value of his insuralce, which he
rejected. LJltimatel;' a 30% salary
increase and an extra trvo weeks of vacation arnually convinced
hLim to stay. Pelly said:
Smith arid Sinclair, old Westlake employees, didrL'i meet any
of the criteria r.ve set for Sugar Bora'l
emplovees. Slreiby didn't *'ant to ternrinate them out of a sense
of loyalty, but our budget was very
tight and rve had to make the most productive choices for Sugar
Bor.r'1.
Givens terminated Sindair (a lackluster kitchen worker who had
been on temporarlr ieave) but not
Srnittr, who had r.vorked for Darre Sugar for more tlun 20
vears, remained loya1 to Westlake after his
death, and helped Giverrs iearn the br:siness during her firsi
months on site. However, Smiih's
passive complaints about late hours and heavier workloads
exasperated Pet{.y. Smith was offered a
choice of two jobs: (1) al hourly wage greeter and shoe counter
cashier or (2) a comrnission-based
private event sales person.4 She viewed both as demotions, but
chose to work in event sales.
The netl. staff consisted of four full-time emplovees, fir'e part-
tjrne emplo;rees (crrsiomer-fucing
cashiers/shoe rental specialists), eight u'ait staff and trvo ba-

18. rtenders. A part-fime accou.ntant paid
bills, tracked weekly expenses ald prepareci monthly financial
statements.
The rninirnum wage compensation was $2.15 per hour for dpped
employees, and $7-25 per hour
for hor:rly workers. Thalks to Sugar Bowl's proxirLity to nearby
r:niversities, college and graduate
students filled bar and wait staff posilions filled within trvo
weeks.
Firutncial Controls
"Employing a group of young and sociable employees luualiy
meant higher levels of slu:irrkage,
said Pefly, using arr indushy tei-m to describe employees'
unauthorized distribution of free or
discounted consumables to friends and acquaintances. "At High
Roilers in D.C., most ernployees
found it hard to resist giving freebies to friends. I knew that
implementing and consi-siently appti'ing
management controls at Sugar Borvl would be critical""
4 S*jth't compensation a'as $250 per u,eeiq plLrs 10% of total
revenue fiom private events she booked. Smith did not receive
health jrsumce as part of her new comperuation package.
BRIEFCASES I HARVA.RD BUSINESS SCHOOL
Sugar Bowl I 913-537
Petty's proposed management controls:
Problem Control

19. Liquor theft
Unexpected losses
Shrinkage
Unauthorized charges
Manager presenl ald sig'nahrre required to remove Liquor
botCes fron,
inventorJ' closet.
Monthlf inrentory check of food, liquor and supplies-
Indepeniient auditing of daily cash receipts, checked against
number of
customer:s, actual sa-les arrd bank deposits.
All deliveries over $150 must be accompanied by an authorized
purchase
order.
Marketing for tlrc Gra-rLd Cpening
ArTaertising: Sugar Bowl's target market consisted of 1,oung
professionajs and older graduate
students. Both groups used online tools and services
fi^equeniiy, and Givens believed online ads,
direct emails ald social media charlrrels offered better r.a,lue
and tracking capability than traditional
oFtlrne media.s
Givens budgeted $40,000 for oniile ald offlile markeling
materials, adverlising arrd promotions
from }r4ay launch ihrough the end of 201 1. See Exhibit 3 for

20. results from fir'e summer test marketing
campaigrrs, which Givens used as a reference for marketing and
adrreriislrrg spending.
Public Relatioirs: For the Grand Opening, a low cost, aftention-
grabblng PR sturt helped boost
ar4rareness and inkigue on a sunny Saturday afiemoon- A $200
pemit enabled staff to assemble fit'o
makeshjft bowling lanes in lhe road, with Sugar Bou'L t-shirts
au'arded to anyone who bowled a
str-ike. Music played, wait staff sen/ed free lemonade, iced tea
ald a samplirrg of menu items, and
hefry crowd gathered. A few drivers seemed disgn-rntled but
overa11, the mood was positive. Givens,
doing meet-and-greet the entire time, made the acquaintance of
nearly tivo dozen comrnercial and
residentiai neighbors, teliing then-1, "We t'ill be good
neighbors. lf you ever har.e a problem, call me
directiy; here's my card."
The following day tJ'rree reporters contacted Givens and within
48 hours Sugar Bowl was feahrred
on two television news prograrrls, a radio shorv, and in the
local newspaper's Sunday busiless
secfion.
Phase III: 201U12 Operations
Sugar Bowl opened for business on Thursday, May 5" 2011,7
weeks later ihan plalned due to
construction, distribution and permitting delays. The first
weekend's attendalce averaged 60%
capacity.6
UnpredictabiliQ

21. Civens shrrggled to predict catering estimaies as early sumrner
attendance fluctuated. One rainy
Friday night nearly exceeded maximum capacity with 425
customem, bui ihe next nighf a balmy
Saturda}', there were just 100 patrors all night. By the end of
]u"ne, altendance was averaging 35%
5 A thltd p..*.
"mail
service cost $50 per monrh for unlimjted mafu, compued to
$250 for a single black md u,hite display ad
ir Raleigh's Smday paper.
6 Gir'"* detemined that eveni:rg capaciti, was 450 {or, t}rre
"cyc1es" of L50 each).
HARVARD BUSINESS SCHOOL I BRIEFCASES
9a3-537 I SuguBowl
caPacity from Thursday to Sunday, and just 15% Monday
through Wedlesday. To make matters
worse, average spending, at $40 Per perso.n, was lower than
anticipated. Givens hoped, but could not
be sure, that low Patronage was due to a dirninished summer
population. She debated making
irnrnediate use of the Q3 marketing funds.
In |uly, two waiters quit simulianeously because their earnings
rt'ere lower than expected. Pety
caught a third gwing away drinks and fired her on the spot; she
later overheard Smith grurnble to a
fellolt' employee "Well, that's not how it used to be around
here." That weekend both Petq' and

22. Givens rolled up their sieeves and rt'aited tables; Givens had
forgotten how stressful arrd tiring the
job could be. Finding, hiring and kaining each ne4r employee
took 10 days and cost roughly $250.
ln October, machinery for two lanes r:;rerpectedly
malfunctioned while Gary Spalding $ras on
vacation. An out of state servicer repaired them, but it took a
u'eek's ti-rne and iotaled $26,000.
Customer Experience
Girzens noted that once irside, customers enjoyed themselves.
To r.erifu her hunch she asked
custorners to rate their experience on a 1 to 5 scale as they
tumed in their shoes. 85% responded w-ith
the most favorabie rating. For the less posiiive responses,
complaints focused on cost, wait times, and
group (as opposed to singles) orientation.
Priaate Eaents
Smith struggled as an event sales agen! focusing her efforts
only on Raleigh businesses ald academic
departments w-ith rn'hom she shared personal connections. In
september she quit-
"Smith rvas close with my grandfather and she knew ma_ny of
m;r rgi3ti.res; it was a delicate
situation and I handled it poorly. Buf I am not sure rt'hat else I
could have done. There sirnply
u'asn't a good roie for her at Sugar Bowl. "
To replace Smith, Givens hjred a pari-time event plamer,
Charlie Campbell. Campbell had been
unemployed, and u'as eager for a job. As such he, too, agreed to

23. work.mostly on comrnission.
Campbell had both sales experience arrd an extensive personal
network at high tech and biotech
companies all over the Research Triangle. Wiihin a month he'd
booked two prirrate events (listed
below) arrd made substaltive contact rvith HR malagers at 21
companies.
Company Event Revenue # People Length
SJ.'rnbia
Lerner-Wright
$s,000
$4,700
60
fU
3 hours
3 hor:rs
Not warrting to sacrifice rerenues from Thursday to Sunday,
Givens designated Monday a1d
Tuesday nights for private events. Bv November, Campbell
secured four holiday parties and
reported interest in three more for (potentially) $35,000 in
revenue. Gir.ens kner,r' she would have to
irnprove his compensation if she wanted to keep hirn.
Gaining MomeTltum
September and October revenues grew as word spread among

24. graduate students and the yor:ng
Professional circuit (See Exhibit 4: Weekly Attendarice
Snapshot). At,erage spending clirnbed to M5,
and by November, Thursday-Sunday nights averaged 60%
capacity. But Monday, Tuesday and
Wednesday patronage-udess booked with private events-
iaaguished at 15% capacitv. The sprirLg
BRIEFCASES I HA.FiVARD BUSINESS SCHOOL
Sugar Bowl I 913-537
a11d srmaer's lower-than forecasted revenues had drajned cash
arid Sugar Bowl's incidentals
"cusirion" was a mere $15,000 by December.
With profits in mind, Girrerrs and Petty identified the four
menu items and three specialty drinks
that offered highest contribution margirs and guided staff to
gently promote those iterfts. By
Decemt'er, Petty had a good idea of customer tastes and
Preferences:
As a resu-lt of the meticulous record keepilg marrdaied bv our
bookkeeper, tn'eaking menu choices
u,as slralghffont,ard. For example, we noticed that of our menu
of ffieen tapas o{ferings, the six
top-selJ.eri vrere ordered 50% more than tfre least popular
offerirrgs. We narrorn'ed menu opfions,
utrd re-.,egotiated catering costs (which fell by 25%), and

25. increased prices by 10% for best-sellilg
plates, These changes lifted average revenue per person to S50
b;' the end of December-
S t r at e gic P ar tner ship s
Bowling ieagues athacied a steady slream of customers on
slor^rer nights were a key benefit of the
,'old' Westiake business model. Givens w-ondered rf she had
made a mistake iri excluding league
players completely from her new strateg'y. IrL February of
2A72, Givens contacied a local dating
sen'ice to explore a partnerslLip. The datirig sen.ice said ii
could gather 60 singles under the age of 35
for an eight week {ednesday night bowling league. The sen ice
rt ould pay Sugar Borvl $120 Per
person f& resen'ed bowling trom 7pm io 10pm, a Sugar Bor.t'l t-
shirt (cost $5.00 each), and 50% off
ine drink per person per evenirLg. With the help of iJ".e dating
serv-ice anaiyst, Givens prolected the
average ord", ?o. each singie *o,ttd amoi.nt to 1.5 drjnks and 2
iapas plates per Person each rught-7
And,; similar 2010 parkrership at a rock-dimbing facilily
resulted in 50% of sirrgles becorning repeat
customers.
4eanr,,,hile, Petty attended one evening the short' of a Raleigh-
based amateur eighties cover band
with a loyal late,twenties following. The tfuee person band, Zu-
lu" played one sold-out shorv every
other n,eek to a crorryd of 120 at a small bar donntown. The
bar, however, was closing and Zuiu
needed a ner^r home for six months for their Wednesday night
pgs. {ith some milor furnihrre
maneuvering, P"tiy figured Sugar Borvl hrad enough room to

26. accommodate the bald' their
instru-rnents, a1d a standirig crort'd of 75 in the bar and
restaurant area. Zulu's fee rvas $1,500 per
nighi. The trvice-monthly show began at 9pm ar'd lasted 3
hours. Petty estimaied, based on past bar
arr6 admission revenues, that fans 1,ould pa;, $L0 to hear Zuiu.
and order 2.5 drinks arrd 1 tapas piate
each; she expected only a few of the larres to be in use during
the show. According io the closing
bar's owner, fars were loyai to Zu1u, noi thet venue. He guessed
that behveen 5% and 10ok of Zwlu
fans became repeat customers.
April2A72
Sugar Bowl's revenue strearis corrtinued to fluchrate, and as
surnmer approached Givens
wondired iJ the number of customers u'ould once again drop
precipitousiy. However, the positil'e
energ]- on crortded nights was motivating. Dn.itlg these
moments, as she watched throngs of
.*stJn-,e.s enioying themseives in the compan;r of rriends,
Givens felt tremendous achievement- She
sensed her business was poised for groivtjl but in rt'hat
direction? A second locaLion? A fralchise
opportunity? Expansion of the curent iocation?
On a neighboring blocl, Givens noticed two new businesses
under constr-ucliorr-a lvire and
cheese bar, and an art studio that plarrred io offer evening
painiing classes (along u'ith beer and
7 Qt ZOLZ average price for one d;i& was $10, ard one ta.pa-s
Plate was $8

27. HARVARD BUSINESS SCFIOOL I BRiEFCASES
9L3-537 I SugarBowl
wine) for adults. Clearly, the neighborhood was flourishing. Bt:t
a241ane bowting facility on the
outskirts of Raleigh had ciosed for good after 30 years.
In eariy April, Givens fielded lwo surprising and monumentai
phone calls; the first was from a
local investor. He said he'd accompanied his son to Sugar Bowl
on several occasions over the last six
months, and noted its rise in populariiy amons his son's peers.
He then asked if Givens would
consider selling Sugar Bowi ard suggested $1 million as a
sf:rting point for negotiations. Givens was
tom. A sale at the right price could generate Givens and the
business's investors, inciuding friends
and famiLy, immediate financial benefits--Givens, wi*r a 25"/"
stake, could potentially pay off her
student loans. But Givens wasn't sure she was ready to sell now
thai she'd survived the tumuituous
first frt'o years of operations" And how u'ould her extended
family feel about selling her
graldfather's business to al outsider?
l,ater that sarare u/eek, a busiless school friend called Givens
out of fhe blue- The management
consulting firm for whom he n'orked vas grolring, and they'd
asked hirn to build arrd lead a group
focused on smail business operatiors. Would Givens be
interested in joimng his group in New York
City, he asked? Though bavel n'as a corsideratiory work-life

28. balance was a priority for the firm and
hours u'ere prediciable. Givera's salar;'rt'ou,ld more than
double, arld a hefty signing bonus u'ouid
help to ease the tralsilion. It was a line of ^/ork that had
intrigued her in the past, and arl offer she
could not ignore.
Pondering tlrcfuture
Before commi:licating r,,.ith her board or responding
wanted to understand:
to the investor and/or her friend, she
. lVhether she u'as on track to repay her loans within the five
year timeframe.
. The n.^lrrLber of customers per day needed to break by the
end of QI 2AI2, as compared to
nearly a year earlier, Q3 2011.
. The benefits and drart'backs--economic and otherwise-for
Wednesday night options:
Singles League or Zulu venue.
. Mondays and Tuesday potential- With customer breakeven ln
m;ria, did it make sense to
close aitogether il no private events rvere scheduled? Were
there other options?
Looking back at her experience at Sugar Bowi, Givens
reflected: The past 18 months have afforded
me an ilcredilrle opporhrnity; I've been exposed to general
management much earlier than most of
my busirress school classmates arld for that I am graiefuL i'm
certainly proud of the progress we'l'e

29. made with Sugar Bowl.
From the outside it would appear that our success has come
from leveraging the urban lounge
concept. To me, however, that's not the case-it is the
combination of careful cost management
together il.ith the nert' strategy that has propelled our success.
My greatesi accompiishmeni, I think,
was maintaining tight cost controls through our trarsition-
Bon'Iing is currently experiencing a renaissarce, with young
professionals *joy*g urban lourrges
Like ours and famfies pah-onizing big-box entertainment
centers. Yet the long term viabiliY of either
of these busirress types is unk:roH'n. Who knows *'hat the next
trend in entertainment rrill be?
We't'e made a large investment irr Sugar Bov'l but I do worry
that its novelty rvill be lost on future
generations. PIus, i am saddled with debi arld my investors are
rvaiting for a retum as r,r.ell. I ajso
rt onder at'n'h.at point I should pursue a larger generai
management role to further my o{n career.
10 BRTEFCASES I HARVARD BUSINESS SCHOOL
Sugar Eoa'i I 913-537
Appendix
Oven'iew of Bowling Industry in 2011
Current figures show there ate more S,an 100 mjllion bowlers in
90 counlries worldwide, and

30. more than Z0 n-,i-llion in the United States alone; this makes
bowiing, a $7 billion irdush-w in the
United States, the most popular played sport in the United
States today. lncreased parlicipation from
both women and childien has fueled bowling's grorvth over the
last decade. The sport's arerage
customer boasts a household ilcome of nearly $58,000.
The most widespread form of botviing in ihe U.S, is Ten-Pin
Bowling. One game consists of 10
"{tarnes,'of 10 pins each, Wjth each fralre, each player receives
hvo chances (or rolls) to knock down
pins, and on the tenth and final frame, three chances- A perfect
score--arl extremely rare event-is
300. Fr.q,rur,t recreational bowlers generally average betq'een
l-20 and 175 points Per game.
Bowling,s popularity jn *re United States exploded in the
1950s, mostly dr.re to television corierage
of bowling toumamene. Iri ihe 1960s, improvements in lane
machinery and technology fueled
additional"growih, which continued through the 1970s as
widespread parlicipation in league bou'Jing
spread. Tifuically, league bort4ers comrnitted to weekly
bovr'ling sessiors for 32 v'eeks, ensurrng a
con-si'stent revenue slream for bort'Lilg cenlers.
Eegiming in the laie 1980s, however, industry growth stagnated-

31. as league participation declined.
eowUig ."i"., turned to recreational bou,lers for revenues,
competing for their dollars against other
fornrs Jf fanril;, entertainment. Also during this time the
bowiing industry grappled with its
reputation as arL outdated, old-timers activity. This image was
fueied in part by old, wom faciiities
and al aging customer base.
Over the last 15 years, maly borvLing centers have updated
their facilities with one of tr'vo markets
in mind-fa1nliies or young urbalites. T1ose pursuing families
often create family enterta-inment
centers, -wifh bowling-ptorrlaittg just one part of a larger
entertajnment experience. The "upscale
bort,iing lolnge" has grou;n in popuiarity since roughly 2000 in
larger urban narkets. These facilities
target i1- to 35-year-o1d urban du'ellers, providing an
altematirre to bars and live music venues-
Ofien rvith o"util," lighting displays and themed entertainment
they are as much night- and dance-
ciub as they are bo*[.,g alle,v.
-
They may feature pool or biliiards as well as bowling, and
provide
upscale dining options ard a fuIi bar.
kr the Uniied States, there are 5,350 bowting centers, u'iih an
average of 20 ianes each- The
inciustry is higgy fragmenied. Together, the five largest owners

32. ou"n just 8% of total borvLing
facilities- Bowling centers are predomjnantly family-orvned'
HARVARD BUSINESS SCHOOL I BRIEFCASES 11
9'13-537 1 SugarBowl
Exhibit 1 Sugar Bowl Balance Sheet
December 31 2OAG2072 2005 2008zoaT 7fr09 2010 zB77
ASSETS
Current Assets
Cash
Irverrtory
Fixed Assets
Propertv, Plani & Eqrrilment
Tota-l Assets
LIABILIT]ES
Accounts Payable
Debt
Total Liabilities
EQUTIY
Comon Stock
Retained Earnings
Tota} Equiil,
$ ss,488
$ 15,412
$ 54,ffi7
$ 104,907

33. $
$
s
fi u,473
fi 6,s7L
$ 132,103
5 163,747
$ 15,000
$ 72r,557
$ 135,567
$ 30p00
$ (3,420)
$ 26580
$ 29,667
$ 7,94i
$ 184,122
$ 216,732
$ 2s.000
$ 948s0
$ 119fs0
$ 130,000
$ (33,118)
$ 96,882
$ 9.057
$ 42oA

34. $ 178,M6
$ 191,303
$ 30p00
g 124,208
$ 1s4,208
$ 130,000
$ (ezeOs)
$ 37,095
$ 298,806
$ 2400s
$ 66,594
$ 83,950
$
$
$
$
$
408,s00 $ 6s8,962
73L,311 $ 809,506
8,488 $ 51,99s
724,208 $ 724208
749,696 $ 7/6,203
$ 130,000 $ 130,000
$ (160,490) $ (e6,6en
$ (30,490) $ 33.303

35. $
$
$
L4,907
40,000
54,907
30,000
0,000
50.000
12 BRIEFCASES I HAHVARD BUSINESS SCHOOL
NT QUARTERLY |A]nillAL':'
Income
L:rre Rental
Food Sale
W.r-tt"t " Sugu
Bowl Sugar BowI Sugar Bowl Sugar Bowl
o3 2010 o7207a 03 2011 Q4 2011 Ql 2012
Wistlake 1.,1, 1,:,;..,',$u. g.'ar Bow]
,',,'2010.:, j:: :: : :,:::::::,,2011 : :.. :
$ 18,290 $ 106,707 fi 179,077 $ 2:?5,400 fi 267,510

36. $ 17,i50 fi 7A392 S 159,667 $ 44€,500 $ 4B'270
q ?0-571 $ 99.460 S 243.763 $ 559,27C $ 501,550
, $ ,'. 398;950 i .:,$...,.'561,128
, $,,,,, ', 56;9]p ;r,',: $ , ;'678559
, $,,,,69,890,,':fi ,': 9|.)2493
ToGl g rse,ori 5 276,559 $ 582,451 $ 1,283,i70 s 1]72364 $ ,
,s25,660 , , ,,, $ ,2, 42;180
Vriable Cost of Sales
Food Puchased
Iiquor Puchased
Food & Reveraqe Sunr
$ s,145 $ 39,420 $ 110,250 $ 181,386 5 199,335
$ 4,7t4 $ 29,838 $ 10s,000 fi 249,530 $ 201,600
s 3,772 $ 35,953 g 729,757 $ U4,500 $ 147'011
I :: . :::: . r:: :.: : ,:..,, '..:,:, .:.::, '
5'.,;:
1:L,17 976:',.,,,,'l :$ii.: :iJ51,056
$ ',, 13;978..: i' ,$::.33436S
$'', . 1rrr81,':,., '5' , 779,60
T s rs'O:t $ 10s210 $ 34a,407 $ 545,49 --fi
j+7f16 $,., 43.735,, ,,,:, g ,.,::195;033
General Overhead Expenses
Mmkethg and Advertising
Salries: Fu]l Tine
Salaries: Pa:t Time
Caterirg wage
Coupons

37. legal and Audit
Lrcrruce & Pemuts
Ofice Supplies
Rer.t
Repaii & Maintenance labor
Repau & Maintemce Suopiies
Utilities
Travel & Promotion
Lrsurance
4isceJlmeous
$ 2820 $ 10,000 $ 1s,000 $ 15,000 $ 15,000
$ 29,400 $ 48,498 $ 48,498 $ 4e,498 $ €,498
$ 9,241 $ 20,130 5 187)0 S' 31528 $ 23,900
n/a $ 16,128 $ 25,920 $ 32,077 $ 75'920
$ 2,339 $ 7,000 $ 9,000 $ 11,000 $ 9,000
5 7,172 $ 3,600 $ 3.600 s 3,600 $ 3,600
$ 440 $ 1115 5 7,47r $ 6,000 $ 6,000
$ 794 $ 1,950 $ 3,450 $ s,450 $ 3,450
s 76,s49 $ 43,000 $ 43,000 $ 43.000 $ 43,000
$ 13,83E $ 14,000 $ 29,5s0 S 34'550 $ 29Js0
$ 24,s5s $ 45,000 $ 49,000 $ s8,000 $ 53,000
$ 7,137 $ 15,000 $ 25,100 $ 24,040 $ 23"520
$ 263 $ 8,ooo $ 3,ooo $ 3,ooo $ 3,ooo
$ 14.700 $ 2S,s00 $ 2s,s00 $ 33,000 $ 33,000
$ 450 $ 6,000 $ 8,500 $ 7500 $ 9,700
.'
$ 9:s0 $ 4{.000
$ lDrltr0 s 145,494
$ 30,800 5,73.)75
c. .. 7arfr<
s 7,090 s 2z,qp
5 7"040 , ,$ 10,800

38. $ 6F00 $ ,10;910-
$ 2,740', $ 108s0
$ 89.830'S 129.000
I :$.:.:..'102,7O0 .: r, $'.,,' ,78,100rt
s 57500 s 15:.000
5 Tt,tq ,r$ 65,140
s .. - ,: $ :141000
$ 49-ooo 5 9opoo
$.. 1500. $ 22^r)00
Total General g rrs":zs fi 269,787 $ 314J13 $ 359,ry! ----ql{liq
S:'
:5i6510 : 'r,,,f 9QJ:87
Ilterest paymmt Bank
lrterest pavment: Frimds & FamiiY
Deprriation
Tax
fi r,8s7 $ 8,000 $ s,000 $ 8,000 $ 8,000
$ 4,000.00 $ 4.0c0.00 $ 4,000.00 $ 4,0cc.00
$ 2,100 $ 3.ooo $ 3,ooo $ 3,ooo $ 3!oo
s 7,678 $ 1q?42q__-$ !o-124q
.::$:::: ::r:8;000 :,,. t$,.. , :16,000 ,
t$'':,'
, .9,oq0,
,,,,, i $: ,ii. 14000,:..
.r : !:,:. . r:: ir . :.r : $ :.jf .79;566:

39. Net Income { +.422 $ {112,932) $ (91,269) $ 231'055 $ 774,329
. $ .'.',{575E5) , :,.l, ::$ '"' 63;793
Suga Bowl 1 9L?-537
Exhibit 2 Sugar Bowl Irrcome Statements: Quarierly and Alr,uai
ae220llrepresertsjustgu,eeksofsugarBou,lOperations.
Notethefacilityclosedfo;renovationsinNovember2010,adreopene
durearlyMay20ll-
HARVABD BUSINESS SCHOOL i BRiEFCASES 13
913-537 -1"4-
Exhibit 3 Marl<etirrg Carnpaigns
Exhibit 4 Weekly Attendance and Revenue Snapshot
a Does not ilclude Private Event patronage
e hdijne I
q1iec1rmq1l to ars;; g;;i r1nii1 L1't
Dirqc! Emajl!o Rgn!e_d Talgqt lmail Lig|
Group Buylng Of fer
sociat Mediq WgQ"site
.
Keyword Search
i,::':,::ii::.#:,P0te,ritiai i,f :,l:l
eustoin e'ri,ieacne u

40. 'ltl..,',,,.ll,l,'.fi
ACtUat,,.':',l,;.',,l. ,''.,
cUstorn!,:s'.Aa t[vereU
::eo1;!:r.P.qil
LUStOmef
cbs!rpdi:rRe,pe9r
i'j:,i::i::iCt iitbin e ir" ;':,:'1,
$so
s4fooo
$3ooo + 3o% of sales
. $0,7s pelgflgk
51,10perclick
40900
4,0-00:00
5,000:00
1,oqo.o-0
500.00
$ 1.92
$. 5o,o_o
$ 11.s0
g 6:25

41. S 1s.71
$ ". 1,11$ .p1.:1
$ 46.00
$ . 62so
$ zz,so
Weekly Attendance Snapshot a
Average g
Per Person
2011
Q2
Q3
Q4
2012
Q1
Monday
67
67
75
Monday
101
Tueoday
59
59
94
Tueoday

42. 125
Wed.
75
190
Wed.
120
Thursday
Ls4
200
308
Thursday
378
Friday
160
,LT3
350
Friday
411
Saturday
180
220
385
Saturday
420

43. Sunday
r/4
1'7")
299
Sunday
335
;,ir:i',,Week]v i ,.i, l
-::,i.. l,i. :.,:: : :i ; i.,. .,, ;;.1_, 1
:.rr:'.i:.i,':1,"i.61y.:,1,!..',1!!,',i!i
1i;i,i, ...1.1008,,,,'',,1 ,, ,':,,
:.,i,:::l:i::r::::.] 7ni :r'! : l!l
:rj:r',.i:.:: ...::iiiri 1r: r.ii . r:
a
35.00
40.00
50.00
52,00
$
$
$
$
__MACOSX/._Sugar Bowl.pdf

44. Question 1.1. A three-year-old girl has just been diagnosed with
type 1A diabetes and her parents are currently receiving
education from the diabetes education nurse at the hospital
where their daughter is receiving treatment. How can the nurse
best explain the etiology of their daughter's health problem to
her parents? (Points : 2)
“The problem that underlies her diabetes is that her own
body has destroyed the cells in her pancreas that produce
insulin.”
“It's not known exactly why your daughter has completely
stopped making insulin, and treatment will consist of your
rigidly controlling her diet.”
“This tendency to produce insufficient amounts of insulin
is likely something that she inherited.”
“Environmental and lifestyle factors are known to play a
part in the fact that her pancreas secretes and withholds insulin
at the wrong times.”
Question 2. A 60-year-old man has presented to his nurse
practitioner because of an earache that has become
progressively more painful in recent days. After giving his
history and having an examination with an otoscope, the man
has been diagnosed with otitis externa. Which of the nurse
practitioner's following statements to the man is most
accurate? (Points : 2)
“You'll need to avoid getting any water in your ear until
you finish your course of antibiotic pills.”
“I'm going to instill some warm water into your ear to flush
out debris and bacteria.”
“I'll prescribe some ear drops for you, and in the meantime
it's important not to use ear swabs.”
“This likely happened because your ears aren't draining
like they should, but antibiotics that you'll put in your ears will
resolve this.”
Question 3. A patient with a new diagnosis of an endocrine

45. disorder is unclear about how the body can control the levels of
different hormones over time. Which of the following
statements most accurately underlies the dominant regulation
process of hormone levels in the body? (Points : 2)
A positive feedback cycle ensures that stable levels of
hormones exist in the body over time.
With input from various sensors, hormone production and
release are adjusted based on existing hormone levels.
The hypothalamus ensures that hormone levels correspond
accurately to the diurnal cycle.
The pituitary gland is genetically programmed to stimulate
and inhibit hormone production and/or release based on needs at
different points in the life cycle.
Question 4. What does a high level of thyroid-stimulating
hormone indicate? (Points : 2)
Hypothyroidism
Myxedema
Hyperthyroidism
Thyroid nodule
5. Following the identification of low levels of T3 and T4
coupled with the presence of a goiter, a 28-year-old female has
been diagnosed with Hashimoto thyroiditis. In light of this
diagnosis, which of the following assessment results would
constitute an unexpected finding?(Points : 2)
The presence of myxedema in the woman's face and
extremities
Recent weight gain despite a loss of appetite and chronic
fatigue
Coarse, dry skin and hair with decreased sweat production
Increased white cell count and audible crackles on chest
auscultation
6. A stroke affecting which of the following areas of the brain
would be most likely to leave an individual's vestibular system
intact and posture and balance maintained? (Points : 2)
The brain stem

46. The thalamus
The temporal and parietal cortex
The limbic system of the cerebrum
Question 7. A care aide at a long-term care facility has
informed a resident's nurse practitioner that the 80-year-old
woman's eyes appear to be inflamed and her eyelids are caked
with sticky secretions. The woman subsequently has been
diagnosed with posterior blepharitis. Which of the following
treatments is the nurse practitioner likely to initiate? (Points :
2)
Surgical repair of the woman's blocked meibomian glands
Warm compresses to be applied regularly to her eyes in
addition to oral antibiotics
Regularly scheduled cleansing of the woman's eyes with
normal saline
Intravenous steroids coupled with topical antibiotic
ointment
Question 8. An endocrinologist is providing care for a 30-year-
old male who has lived with the effects of increased levels of
GH. Which of the following teaching points about the patient's
future health risks is most accurate? (Points : 2)
“It's not unusual for unusually high GH levels to cause
damage to your hypothalamus.”
“GH excess inhibits your pancreas from producing enough
insulin.”
“The high levels of GH that circulate in your body can
result in damage to your liver.”
“When your pituitary gland is enlarged, there's a real risk
that you'll develop some sight deficiencies.
Question 9. A 46-year-old male has presented to the emergency
department because of the eye pain, severe headache, and
blurred vision that have followed an eye exam at an

47. optometrist's office earlier in the day. The patient tells the
triage nurse that he received eyedrops during the exam “to keep
my pupils wide open.” What differential diagnosis will the care
team first suspect? (Points : 2)
Infectious conjunctivitis
Keratitis
Corneal trauma
Angle-closure glaucoma
Question 10.A patient with a history of an endocrine disorder
exhibits signs and symptoms of hormone deficiency. Which of
the following processes would the patient's care team most
likely rule out first as a contributing factor? (Points : 2)
The patient's target cells lack sufficient receptors for the
hormone in question.
Hormone production is sufficient, but affinity on the part
of the target cells is lacking.
The process of down-regulation has resulted in decreased
hormone sensitivity.
Up-regulation has increased the sensitivity of the body to
particular hormone levels.
Question 11. A 51-year-old woman has been experiencing signs
and symptoms of perimenopause and has sought help from her
nurse practitioner. Doctors have confirmed a deficiency in
estrogen levels as a contributing factor. Which of the following
phenomena could potentially underlie the woman's health
problem? (Points : 2)
Sufficient synthesis of estrogen but inadequate vesicle-
mediated release
Inadequate synthesis in the rough endoplasmic reticulum of
her ovarian cells
Insufficient estrogen production within the smooth
endoplasmic reticulum of the relevant cells

48. A lack of prohormone precursors needed for estrogen
synthesis and release
12. Which of the following hormones are derivatives of
cholesterol? (Points : 2)
Epinephrine and norepinephrine
Insulin and glucagon
Aldosterone and testosterone
Eicosanoids and retinoids
Question 13. A 32-year-old man is complaining of burning,
itching, photophobia, and severe pain in his right eye after
swimming in the ocean. To determine that the eye condition is
corneal rather than a conjunctival disease, which of the
following would be the distinguishing symptom? (Points : 2)
Burning
Itching
Photophobia
Severe pain