Case Study: Fitness Business

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¶ … fitness business in Australia

The society of the modern day era is undergoing important changes, obvious at all aspects of life. For most individuals, jobs occupy the large majority of their time and they are often sedentary; time to cook and engage in other leisure activities is decreased, resulting as such in additional pressures for the health of individual. Still, more and more individuals recognize these pressures of modern day's life style and strive to counter act them with physical exercise. In Australia then, the fitness facilities are becoming more and more popular (Fitness Australia, 2012).

The Ella Fitness Studio is a small size exercise facility which provides services in a single studio and addresses the local neighborhood. The company has been operating for two years now and has been implementing several business principles, yet its sustainable success has yet to be proven. The current project then sets out to assess this enterprise and propose recommendations as these are required.

2. The business

The Ella Fitness Studio was established in 2011 in the neighborhood and it is part of a wider neighborhood chain, with the owner also possessing a corner shop, a pizza place and a beauty parlor. The fitness studio is open six days a week, by the following schedule:

From 6 PM to 10 PM from Monday through Friday, and From 9 AM to 1 PM on Saturdays

The fitness studio is closed on Sundays.

The promotional efforts of the studio are virtually inexistent and the fitness facility does not advertise its services within the local media, nor does it have a website. It relies exclusively on the attraction of customers in the neighborhood through world of mouth publicity and the element of proximity is essential. Given this trait of the facility, the fitness studio was assessed through direct observations and conversations with the customers at the studio.

3. Evaluation of the business and suggestions for improvement

The Ella Fitness Studio is -- as has been mentioned before -- part of a wider chain of neighborhood facilities which provide the community with a variety of necessary services. The majority of the endeavors launched by the owner within the neighborhood have proved rather successful, but it is rather difficult to conduct such an analysis given the nature of the neighborhood.

Specifically, in an analytical context, it is also necessary to assess the environment in which the fitness studio operates. In this order of ideas, the neighborhood hosting the fitness facility is a new neighborhood, constructed in the Point Piper suburb of Sydney and populated primarily with young people, especially couples. The neighborhood was constructed during the real estate rush of the new century and it attracted the younger population due to higher affordability than compared to the real estates in Sydney. As the crisis unfolded however, the value of these properties decreased dramatically and the potential for neighborhood development also diminished.

The neighborhood as such is filled with young, especially young couples, some of them with young children. In other words, young families populate the area and the Ella enterprises have succeeded so far due to their ability to identify and serve the needs of these population categories. The corner shop is vital as it allows the people in the area to make small purchases as the supermarkets are not in their vicinity; the pizza place allows them to enjoy meals or order them after a hard day of work and the beauty parlor allows them to get the treatments they need in the convenience of their neighborhood, without having to travel to the city.

The fitness studio has been successful so far in the neighborhood as it addressed the physical exercise needs of the youth, who are more focused on this aspect (Hebestreit, 2008). Additionally, the studio generated triumphs as it addressed the needs of both genders, providing both exercise machineries for the men as well as fitness programs for the women. Last, one primary key success factor has been represented by the ability to provide these services within the comfort of the neighborhood.

Still, aside from the key success factors, the Ella Fitness Studio also reveals a series of shortages, which can be revealed as shown below:

The fitness studio operates in the same facility as the beauty parlor and it does not have a separate entrance. This is often uncomfortable for the customers of both beauty parlor as well as fitness studio. The fitness studio consumers are forced to pass through the beauty salon in their sports outfits and the beauty salon customers are embarrassed of being watched while they get treatments.

Since it addresses the neighborhood community and operates as a small size entity with limited funds, the Ella Fitness Studio does not have showers within the facility. It only incorporates a small locker room where customers can change clothes, but they are expected to leave soon after workout and shower in their own homes.

The schedule of the fitness sessions is rather restricted, with the fitness studio only being opened from 5 PM to 10 PM on weeknights and from 9 AM to 1 PM on Saturdays. This schedule is constructed based on the premises that the individuals in the neighborhood would traditionally work in the city during the day, and would only be at home after office hours, not needing workout before 6 PM. Still this perception does not always apply. For instance, most of the customers at the fitness center are young females, who are on maternity leave or who are stay at home moms. This particular customer segment might prefer to be able to access the fitness facility during the day as well.

Given that it only operates for purposes of serving of neighborhood community, the premise of the salon is that people do not need to make reservations, they just show up and exercise. Still, on some occasions, it has happened for the room to be too filled with people, and it became uncomfortable and physically impossible for all of them to exercise at the same time.

At the level of the staff members, the fitness studio offers fitness guidance through two trainers -- one part time employee and the very owner herself, who has gained a diploma in physical training. These two trainers provide consultancy for the customers who prefer to work on their own at the machines in the meaning that they suggest what kinds of machines and exercises to use in order to attain their personal objectives. Aside from this, the trainers also provide programs for various fitness agendas, such as Zumba, Pilates and aerobics. The two trainers work on shifts and they can sometimes be overcome by the amount of work.

The Ella Fitness Studio as such possesses several strengths that increase its success rates, yet it is also faced with several shortages which could be improved in order to maximize the potential of the facility. At a more business oriented level, it is noted that the principles of small business management were implemented at rather limited degrees, and even when these were employed, they were done more out of an instinct, rather than a structured and organized business effort. At the level of TQM for instance, the company has employed some of the ten principles, but it has neglected others. Specifically, the Ella Fitness Studio has focused on the satisfaction of the customers and the commitment to quality, but has placed little emphasis on the measurement of its outcomes and the creation of clearly established goals.

The facility has employed stewardship as a sporadic treat, without it actually being supported by a clear business plan. The principles of a unique selling program and benchmarking have also been implemented to a limited degree. This virtually means that the success of the company has been generally due to the high demand within the neighborhood and the fact that it did not face any competition. Still, this business model is not sustainable within the long-term as it is not competitive, but rather opportunistic (Lele, 1992).

4. Recommendations and implementation

The previous section has revealed several points of weakness for the Ella Fitness Studio which were identified in a pin pointed manner, but also at the level of the principles for small business management. At this level then, it is necessary to forward several recommendations as to how these weaknesses could be addressed through the principles of small business management, as well as the benefits they would derive. The table below reveals the weaknesses to be addressed, the business principle to be employed in its implementation and the benefits that would be retrieved.

Weakness

Nature of weakness

Small business principle

Recommended strategies

Expected outcomes

1.

Same facility with the beauty parlor

Business model

TQM

Delimitation of the facilities and the creation of separate entrances

Increased customer satisfaction

2.

Lack of showers

Business model

Expansion of locker rooms to also contain showers

TQM

Increased customer satisfaction

3.

Restricted schedule

Customer management

Unique selling point

Expanding the schedule outside… [END OF PREVIEW]

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