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Lubys was founded in 1911 in Springfield Missouri and currently at the time Case 22 was published in 1999 has 223 locations in 11 states throughout the Midwestern Southern and Southwestern US Lubys is a publicly traded company on the New York Stock Exchange with no single organization owning more than 57 percent of its stock Barry Parker who is the companys presidentCEO is dealing with a falling stock price and profit margins that have been considerably shrinking over the past few years The following SWOT analysis will try to pinpoint Lubys strategic issues or problems they are facing as well assist in providing alternative solutions and a final recommendation in handling these issues SWOT Strengths Lubys has experienced an increase in sales revenue from 390692000 in 1994 to 508871000 in 1998 They have also increased their occupancy from 113546000 in 1994 to 154501000 in 1998 which would seem to coincide with the increased sales revenue From 1997-1998 Lubys experienced a return on their investments of 110 compared to an industry average of only 86 Their debt-to-equity for the 1997-1998 period is also very impressive at a low 5 compared to an industry 25 Weaknesses The first and probably most important weakness Lubys is facing is the shrinking profit margins Net income has lowered from 39335000 in 1994 to only 5081000 in 1998 This is primarily due to an increase in operating expenses from 331642000 in 1994 to a staggering 497692000 in 1998 Of these increased operational costs during the 1994-1998 time period food costs have risen approximately 31 payroll has risen 484 provisions for store closings have cost 49284000 and general administrative expenses have risen 439 Lubys also has a weakness that isnt as noticeable involving its brand recognition When most people think of Lubys they think of a more cafeteria or blue-collar dining atmosphere This could cause Lubys to be excluded from most metropolitan patrons choices if
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