BUSINESS STRATEGY: Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru

Table of Contents
1.1Company history:
1.2Strategic Management:
2.Current market analysis:
2.2 Porter’s market analysis:
2.3 Generic strategies: Fitness first
2.4Fitness First new service initiatives:
2.5Fitness First operational strategies:


Strategy is the key that the drives organizations towards their business purpose and the achieving through operational strategies.

1.1Company history:

Fitness First was established in 1993, that was positioned as the gymnasium in the city of Bournemouth in the Southern part of England (Our story, 2015) “Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru“. The domain of business is health and wellness industry which allows the users to be fit by availing their services (Nazari et al. 2006). The new business strategy was to reach out to the upmarket category of customers, while re-launching it to counter the market based competition. The challenges are to differentiate from Pure Gym who are low cost gym operators and position themselves as a value towards healthy life.
In this assignment, the business level strategy, its effectiveness and analysis will be done by using PESTEL, Porter’s Five forces and Porter’s Generic strategy analysis.

1.2Strategic Management:

The Merriam-Webstar dictionary defines strategy as the science and art of employing political, economic, psychological and military forces of a national or group of nations to afford maximum support to adopted policies in peace or war. Chen (2009) opined that while this definition points out to the birth of strategy in our human civilisation during wars it lays down broadly the two elements namely the science and art. Thus the technicality involved and the way it is executed in order to bring in a change process in political, economic condition is mentioned. Porter (2010). argued that psychological warfare is a key element to keep the enemy military guessing as the strategy is a ploy or a tactic to fool them while bigger strategy may be something else.

The above definition thus evolves when we analyse Mintzberg’s definition of strategy where it shows its five types. Johnson et al. (2011) opined that the first one is strategy as a plan that is similar to George Steiner’s definition which states that unknown future, can be countered through course of action, which is a plan of action to change from current to desired. He added later on that strategy evolves like a pattern where it evolves as goals are changing so is the actions which are a continuous dimension element to it. The strategy as a position was defined as to enter the markets, where it is changed according to customers, suppliers and encounter competitors. This seemed to be similar to Michael Porter’s five forces while Mintzberg’s strategy as a perspective stated about the values and beliefs which are needed to give a direction to their actions. This reflected Peter Drucker’s approach to strategy as well. Lastly, Mintzberg’s strategy as a ploy is more of a behavioural than what is perceived. So it is done to confuse the opponent that is predominantly used in warfare. Thomas Schelling seemed to echo on these grounds (De Wit, 2009). “Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru“.

Michael Porter’s generic strategies define how they are a competitive advantage for an organisation in a market place. Typically, lowering cost is a strategy to outsmart competitors, while companies also have an option to differentiate its products and services that makes them unique (Chen, 2009). Porter defined scope to do strategic targeting there it enables the company to enter only one segment or be a dominant industry player. Also called generic strategies, this is more specific in enabling the organisation for cost minimisation; product differentiation and market focus strategies that give them competitive advantage (Porter, 2010).

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The above three strategies are different and they have evolved as they were defined, and it has increased in defining strategy per se. De Wit (2009) opined that the Mintzberg definition was elaborate while the dictionary meaning was more nationalistic from a nation’s point of view. Porter’s strategy is much more analytical and focussed while the other two are macro in their approach. The other two definitions did not elaborate on the creating markets, while Porter’s strategy was approach specific to enter a market, and defined clearly how to get competitive advantage.

2.Current market analysis:

The UK fitness market is dotted with many unorganized players and organized ones and the economic condition of UK in the last decade had a direct impact on the gym membership (Clarke and Chen, 2007). The total number of business are 1565, employing 38,000 generating a revenue of over £2 Billion (, 2013). For the last five years, there has been a steady fall in the memberships while gym operators have closed or shifted to a different pricing model. The established players are Fitness First and LA Fitness suffered as low cost entrants like PureGym has churned their customers due to low pricing that has apt for the economic downturn. The membership rose from 12.1% to 12.6% which is almost stagnant (, 2014).


Political: There is no political impact as such but the service tax and the VAT adds upto the price points of the services provided.

Economic: The indicators of UK economy reviving are promising that is indicating a propensity of the customers to spend. This can be translated into a opportunity to attract new footfalls in the outlet along with improved price points that evokes interest (Porter, 2010).

Social: The issue of fast food addiction has led to growing obese population. This implies that to be fit and healthy gym is the only option when medical pills have side effects. So the habit of going to gym will tend to increase as the social self concept will always want to be perfect and healthy socially.

Technological: The use of technology is limited to the gym LCD meters that indicate the workout parameters, time, calories burnt. Neely (2007) added that the mobile based ‘apps’ also aiding home based exercise postures, yoga which is a threat to this industry.

Environmental: The issue of the environment is not relevant as each gym is producing service with users coming in for the exercises. Thus the pollution factor and compliance is not an issue.

Legal: The legal side of the business does not affect the service operations, per se but it needs to obtain license to operate in smaller formats in neighborhoods with commercial license has to be complied (Goldstein, 2009).

The emergence of the membership schemes failing to enthuse the consumers, led to ‘go as you like’, casual gym and slashing the gym services along with pricing which was radical strategy for survival. The projected figures for 2015 is around £2Billion with a slight increase in growth 0.8% (, 2013). Typically the gym industry is dominated by the gymnasium equipment manufacturers and the fitness experts who opened and then expanded deep into the UK market (Nykiel, 2009). “Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru“.

2.2 Porter’s market analysis:

Threat of new entrants: [HIGH] This is very high as low cost gym operators who are unorganised and new entrants can easily eat into Fitness First market share. They can under cut and provide the basic gym services and still manage to lure the customers from Fitness First easily.

Bargaining power of suppliers: [LOW] The suppliers of the equipments can offer full range functionality spacing saving types to fit in the floor for both large format and also for the studios (Nykiel, 2009).

Bargaining power of buyers: [HIGH] The low price entrants in gym sector is challenging organized ones like Fitness First to scale down and still avail the services. Porter (2010) added that this is a direct repercussion of the economic fallout in the consumer preferences in spending.

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Threat of substitute services: [HIGH] The wave of yoga, hot yoga, is a huge threat as its global wave from US that is catching up fast in EU. The concept of holistic approach of yoga that supports slow muscle building is leaner than the bulges due to post gym affect (Goldstein, 2009).

Rivalry: [HIGH] There is a huge threat lurking for Fitness First, especially in the pricing front from its competitors due to which customer churns are happening. PureGym is a major threat as it provides basic gym facilities and services at price points which is hard for Fitness First to scale down as it will put pressure on operational costing and ROI.

2.3 Generic strategies: Fitness first

Fitness First, is the one of largest and CEO wanted to turnaround the brand, with the UK economy posing a huge threat. Therefore, going forward, the intention to do good, led to the spending of £44 million to create space and not make floor more claustrophobic (Our story, 2015).
The first strategic option of Fitness First is changing the retail format of gym specially focusing on penetrating more into the neighborhood. Johnson et al. (2011) added that this is a strategy that speaks of neighborhood nearness factor, breaking the conventional group workouts into individualised and more personal trainer attention. “Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru“.

Strength : This is a strength as changing the format to bring in a change in the customer usage behavior will be key to form relationships with the customers. Weakness: The weakness is that, it translates to a huge cost for a restructuring retail layout design as it had organised business and brand name which were partly rented and owned, that posed a problem for restructuring the business.
Forward integration of the gym service model is the second strategic option which is aimed to reach out to the neighbourhood is bridging the gap between customers through use of mobile smart phone apps (Hoffman and Bateson, 2010).

Strength : This is more localised approach for building relationship based gym service and personalised offer of time slots when customers want to visit. Kengthon (2011) added that thus creation of service happens on demand, that is customisable, near at home which earlier was a group activity, had fixed price membership and time slots for exercising.

Weakness: It may not appeal to all age groups as people who are middle aged and aged may not use apps and carry smart phones.
The first strategic option is dependent on the first one as localised micro gyms can be booked through mobile apps offering reminders to customers to attend gym. So the logical choice is restructuring Fitness First in micro gyms model throughout UK.

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From the infrastructure point of view, it has scaled down the square feet of its service points to a more niche smaller studios. This is a segmentation strategy, where in Fitness First is breaking down the huge customer groups in its outlets and reaching out further from Bishopgate, Liverpool street to neighbourhood studies. This is also an emergent strategy which has been adopted as the market and business circumstances have changed substantially.

2.4Fitness First new service initiatives:

All the equipment’s that are inside the gymnasium being generic, and is the default methodology adopted to provide the service. The need however, is to provide psychological support from the Fitness First as a brand to keep the customer satisfaction rates high. Retail format changing as per customer needs, the Fitness First needs to counter the pricing pressure where the monthly charges have dropped down to £20. Service differentiation can be an apt strategy through which it can define its brand and try to beat the budget operators (Barrile and Cameron, 2007). The strategy to invest in 2000 square feet micro gyms or studio gyms is thus on the anvil, while the non performing ones can be shut down. “Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru“.

2.5 Fitness First operational strategies:

Operational Strategy 1:
The Fitness First strategies to differentiate the service and price it just above the budget operators will help to make a mark. So locations issue resolved with neighborhood penetration done through, Fitness First needs to evolve the micro gym model and service to be relationship based.
Operational strategy 2:
To compete with Apps for smart phones that are now freely available showing poses and postures can be countered with relationship approach. Correct exercise regime and dietician can be added as a value added service which obese people would like to avail (Dyson, 2010).
The plan to do new revised price points is an emergent strategy for defining new service classification in micro gym, which should be flexible to suit pockets. This is more localized and relationship oriented that supports the business strategy redesigning to push the micro gym concept in the neighborhoods. “Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru“.

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2.6Conclusion: Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru

The strategy for Fitness First will be more of a re-positioning strategy which will be more customer centric along with forward integration which penetrates into the neighborhood through micro gym model. These above restructuring strategies are emergent strategies that can change the gym industry format, where Fitness First can need to meet customer expectations set by differentiating it through pricing strategy.
The above strategies in wellness market will help to redefine customer needs through services in different perspective. “Fitness-First-Gymnasium University of Wales-Prifysgol-Cymru“.

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