Porter’s five forces model helps to determine an industy’s attractiveness; I will use the model below to indicate how this affects the Virgin Active South Africa Group.
Rivalry among competitors:
The competitive rivalry in this industry is low. There are few smaller competitors and although Virgin Active fees are market standard, there are no major players that can influence membership fee cuts. Planet Fitness (Who are considered their main rival in South Africa) have a very similar pricing structure and do not offer as much variety, convenience in terms of location and facilities. However, there remains high potential growth within this industry due to growing health and fitness trends.
Threat of New Entrants:
There is very little threat …show more content…
The market for bulk high end gym equipment is minimal so suppliers can be competitive with their pricing. There are however a limited amount gyms that they can supply their products to so a mutual relationship is formed with suppliers and a certain amount of bargaining can take place. Bargaining power in this industry is low, supplier bargaining power is more effective in the smaller gyms clubs. Their centralised department have enough services to allow for core control and specialisation in particular supplies and to target …show more content…
There are many other ways for people to exercise and get fit. People can run anywhere and only need a pair of trainers to do so. The cycling industry is growing rapidly with people choosing to cycle as their form of exercise which can be performed both on the road and off-road. People can use DVD’s of home workouts and even find workouts on YouTube to do at home. The substitutes available are huge and there are a number of factors that play a role in this, for example time constraints, money, and safety. People’s lives are getting busier and busier and often it saves time to go for a quick run or cycle, or working out at home as opposed to driving to and from a gym. Although Virgin Active offers discount rates, there are still people that cannot afford to spend that monthly amount on a gym membership when they can run or workout at home for free. The substitute threat to Virgin Active is fairly low in South Africa, however they do need to continue to improve their innovation in order to fight off possible substitutes to their
Rivalry among competitors:
The competitive rivalry in this industry is low. There are few smaller competitors and although Virgin Active fees are market standard, there are no major players that can influence membership fee cuts. Planet Fitness (Who are considered their main rival in South Africa) have a very similar pricing structure and do not offer as much variety, convenience in terms of location and facilities. However, there remains high potential growth within this industry due to growing health and fitness trends.
Threat of New Entrants:
There is very little threat …show more content…
The market for bulk high end gym equipment is minimal so suppliers can be competitive with their pricing. There are however a limited amount gyms that they can supply their products to so a mutual relationship is formed with suppliers and a certain amount of bargaining can take place. Bargaining power in this industry is low, supplier bargaining power is more effective in the smaller gyms clubs. Their centralised department have enough services to allow for core control and specialisation in particular supplies and to target …show more content…
There are many other ways for people to exercise and get fit. People can run anywhere and only need a pair of trainers to do so. The cycling industry is growing rapidly with people choosing to cycle as their form of exercise which can be performed both on the road and off-road. People can use DVD’s of home workouts and even find workouts on YouTube to do at home. The substitutes available are huge and there are a number of factors that play a role in this, for example time constraints, money, and safety. People’s lives are getting busier and busier and often it saves time to go for a quick run or cycle, or working out at home as opposed to driving to and from a gym. Although Virgin Active offers discount rates, there are still people that cannot afford to spend that monthly amount on a gym membership when they can run or workout at home for free. The substitute threat to Virgin Active is fairly low in South Africa, however they do need to continue to improve their innovation in order to fight off possible substitutes to their