Bally Total Fitness Essay

722 Words Oct 29th, 2011 3 Pages
In your document, analyze and explain using ANY OR ALL models/material from the course:

a) What are the most important strategic issues that Bally Total Fitness is facing?

Strategic assumptions

* Health clubs would become more diverse as they catered to certain demographics or created niches for themselves. The next great bonanza has to be the kids”, baby boomers another “bonanza market” * The market will continue growing due to the concern about the health and well-being.

SWOT

Internal
Strengths
* Leading firm in 2004 in the U.S. Health Club Industry. * Boosted the accountability of club managers for profitability. * Begun to strength its internal control system (pricing and selling) * Commitment
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* National concerns about obesity, desire for overall mind and body wellness, and consumer dissatisfaction with myriad diet programs portended great opportunities for the health club industry. * Grow industry * 2/3 of the population were classified as being either overweight or obese (1/3 clinically obese) * 300,000 Americans died annually of obesity-induced diseases. * 37% of exercisers were motivated by a desire to control weight * 17% of U.S. Inhabitants are hard core fitness participants * 63% of the population “uninitiated believers” (prime target of growth)
Threats

Micro (Porter 5’s forces)
Opportunities
* Barrier entrance: Capital required to outfit a 40,000 square foot Health Club, USD 1.5 million with USD 500,000 in equipment alone.
Threats
* Intensified competition. Main one YMCA and Gold’s Gym, 24 hour Fitness and Curves international. Thousands of companies competed in the Health club industry. Studio-sized clubs that required minimal investment would continue to flourish. * US Securities and commission had begun to investigate Bally’s accounting procedures. * 30% of members failed to reenroll each year * Barrier entrance: Capital required to outfit a 40,000 square foot Health Club, USD 1.5 million with USD 500,000 in equipment alone. But with leasing only USD 25,000-35,000 of upfront capital. * Pay per visit

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