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Transcript of THE GYM
Leading low budget gym in the UK
Annual Turnover 2012: 22.632m GBP
Operating profit: 3.077m in 2012
Profit margin: -1.98% in 2011
3.19% in 2012
Country of operation : UK
44 Branches all over UK, 9 more opening soon.
P E S T E L
Government policies potentially influence the market -->pushes to promote healthy eating and exercise.
Socio-political factor - Obesity problems.
Utility and wage rates gym's
running cost disposable income
4.5% rise in total membership and 3.9% rise in value.
Total market value now estimated to be £4.08 billion
Growth in convenience stores and home entertainment have led to sedimentary lifestyles.
Alcohol consumption levels are rising.
celebrity culture has put lots of pressure to look better and have better bodies.
consumers shifting to health and fitness conscious lifestyles.
Up to date exercise machines and equipment for provision to members and compete with competitors.
Low energy consumption machines.
Gyms must comply with general legal issues:
Health and Safety
SUSTAINING/ SECURING VALUE
STRATEGIC GROUP ANALYSIS
The Gym gains competitive advantage -
lowest price, targets a broad market .
The Gym Group and Pure Gym announced plans on 11th February 2014, to merge amid growing consumer demand for low-fee, high quality and flexible health & fitness club memberships.
Pending regulatory approval.
REASONS FOR MERGER:
Reinforce the superior customer proposition offered by both companies.
Continue to rapidly expand its network of gyms
Rising utility rates (electricity) still puts the gym at an advantage as THE GYM is the lowest operating one.
Rising wage rates do not affect the gym much because of very limited staff.
The gym uses eco-friendly technology practicing green sustainability. All machines are self-powered.
No cash payment option - only online payments accepted.
Fluctuating monthly joining fee.
No 24*7 personnel availability--> safety issue concerns.
According to customer reviews the gym has large space but limited equipment --> overcrowding leads to members leaving the gym.
Government initiatives to promote healthy living increases opportunities to build up a bigger customer base for The Gym.
The exponential rise in the obesity rates in the UK --> attract people seeking more gym memberships.
Social aspect- rising alcohol consumption levels pressurizes people to remain healthy, thus join gyms.
Low cost gyms face threat of substitutes. people may join legacy clubs in search of extra facilities such as swimming pools, sauna, cafes etc.
Joining university clubs or sports clubs may serve as substitutes as well that operate at a low cost.
People may buy gym equipment from the market as one time investment rather than seeking gym memberships.
In today's techno-savvy world, other gaming consoles that promote exercise such as Wii have led people to stay home.
The Gym Limited
COMPETITOR PRICES ANALYSIS
THE GYM has the lowest monthly price of
among other competitive gyms across the UK, with Xercise4less having
as their lowest monthly price.
Cheapest price in the UK - 10.99£
24*7 opening hours, No contracts
At least 170 pieces of equipment per gym
Video-linked classes online
Members online accounts help in the generation of attendance and duration graphs .
- Cash payment accepting machines
- More gym equipment.
- Progress tracking mobile application
- Introducing Fitlinxx
THANK-YOU FOR LISTENING !
MARKET DRIVERS FOR LOW COST GYMS
the gym2014, . Available: http://www.thegymgroup.com/ [2014, june 6].
How obese is the UK? and how does it compare to other countries? 2014, .
PRESS RELEASE - 2014 STATE OF THE UK FITNESS INDUSTRY REPORT2014, [Homepage of THE LEISURE DATABASE COMPANY], [Online]. Available: http://www.leisuredb.com/2014-fitness-press-release [2014, JUNE 4].
PURE GYM AND THE GYM GROUP AGREE TO MERGE2014, . Available: http://www.thegymgroup.com/blog/article/pure-gym-and-the-gym-group-agree-to-merge-6219/ [2014, june 10].
The risks of drinking too much2014, [Homepage of NHS CHOICES], [Online]. Available: http://www.nhs.uk/Livewell/alcohol/Pages/Effectsofalcohol.aspx [2014, june 10].
The Gym Limited2012, [Homepage of FAME], [Online]. Available: https://fame.bvdinfo.com/version-2014519/Report.serv?_CID=83&context=1CMZA63Y0KSLGGK&SeqNr=3 [2014, 12/31].
Algar, R. 2012, 2012 UK Low-cost Gym Sector Report, Oxygen Consulting, united kingdom.
GYE, H. 2014, , Ditch fizzy drinks and the average family will cut out almost a bag of sugar a month say experts as Government launches public health campaign
[Homepage of DAILY MAIL], [Online]. Available: http://www.dailymail.co.uk/news/article-2532562/Ditch-fizzy-drinks-average-family-cut-bag-sugar-month-say-experts-Government-launches-public-health-campaign.html [2014, January 2].
(uk fitness report,2014)