In response to this competition, Gold’s Gym International has opened new facilities in various locations, and has also renovated existing gyms to provide its members with cutting-edge equipment and a better environment. I believe that this is a critical time for you and for the company in order to continue to enjoy long-lasting success well into the future. On behalf of Sage Consultants, I have done some research and found various ways that the company can improve its performance through innovation and adapt to the changing market. Thankful in advance for taking the time to read this report.
Sincerely, Current Situation Gold’s Gym International (Gold’s) is an international fitness company that was established by Joe Gold in 1965, and has evolved to become one of the largest in its industry. The company focuses on offering body building and fitness services to both men and women, and currently has a worldwide subscription of over four million people. The company has established centers in different countries across the globe, and has seen its subscription rate increase daily as people develop a greater interest in maintaining their health and fitness.
Each of its centers is equipped with exercise equipment and staff who train members on the safe and proper way to achieve their body fitness goals. Gold’s also has franchise contracts with other companies and leases its equipment to increase its income (Gold’s Gym International, Inc. , 2013). Figure 1: Health Club Growth from 1987 to 2005 The fitness industry has enjoyed a dramatic increase in the number of health club members for about the past 20 years (Figure 1). However, beginning a few years ago, the industry has faced high competition and numerous fundamental changes as new trends are continually developed.
With the gradual changes in technology, clients adopt different ways of performing exercise. The company has, however, been keen enough to keep up with the changing trends to ensure that it is not driven out of the industry. Gold’s has achieved this by adopting the kinds of technology that help meet the clients’ expectations. To remain competitive, the company has had to come up with mechanisms to remain current with market trends and continue to meet customer demands.
The ability to adapt to changes in the marketplace to serve consumer needs is one of the main reasons contributing to the success of the company (Scudded, 2005). Industry Analysis Figure 2: Industry at a Glance Gold’s operates in an industry where the clients’ preferences vary as to the kind of services they want from the company. The industry is also characterized by constantly evolving trends with the increase in technological development. The art of body building has developed from using equipment that is manually operated to automatic machines where clients select the level of exercise that best suits them.
Gold’s has had to come up with mechanisms of coping with the changing trends by developing equipment that is more efficient for its members by adopting new technologies (Product Technology & Innovation, 2005). Initially, the art of body building was associated with men, but currently women are reported to subscribe to the services in almost equal numbers to men. Women, however, require a different form of exercise than men, and as a result, the company had to implement equipment and exercise styles that are specially designed for them (Shaver, 2006).
This is a particular example of keeping up with changes in the marketplace since competitors were also taking steps to benefit from this growing market. Gold’s has also expanded its market by offering a line of fitness products, such as clothing and looting and other products, which they consider fit for the exercise since they have developed loyalty to the company. Customers subscribing to other gym companies also purchase the fitness clothing from Gold’s, increasing the company’s revenue base.
Another innovation by the company is the creation of the Cardiac Cinema, a movie theater fitted with treadmills instead of seats (Housewarming, 2005). Recommendations Gold’s needs to improve in some areas to ensure that it remains competitive and does not lose market share to others that come up with more attractive offers for the consumers. One area that the company needs to focus on is offering nutrition that is essential for its clients. People who are concerned about their fitness will want to consume foods that are healthy for them, and which do not reverse the gains made at the gym.
Women, for instance, will want to change to diets that help them maintain their figure with minimal fat deposition. Men, on the other hand, will want the kind of food that improves the rate of body building and creates muscle mass. The hotels and people at home may not be successful in designing such diets as they have minimal knowledge of what is most essential (Porter, 2005). Introduction of diet food offering Figure 3: People’s Interest in Healthy Eating It is likely that in the future people will concentrate more on the kinds of food they eat to maintain their fitness.
People’s interest in healthy eating has increased over the past few years, and this trend is expected to increase even more in the near future (Figure 3). As people become more nutritionally aware, they will still go to the gym to have their fitness assessed or to socialize with others, but not as often as their body will remain fit with a balanced diet. In such an event, Gold’s faces the threat of going some of its market as people turn their focus to nutrition rather than the gym; therefore, the company should come up with a solution to the changing trend early on.
This presents a good opportunity for Gold’s as the company will not only increase its product offering, but also create a brand that the members can associate with (“Gold’s Smart to Make Move Toward More Balanced Image,” 2007). To succeed in the special diets offering, Gold’s should consult with professional nutritionists to learn about the kinds of diets that are considered healthy and balanced for maintaining odd fitness. Through this, the most appropriate diets can be developed by the company and tried with several consenting clients to see how they work and if they are actually effective.
Different clients will be suited to different kinds of diets depending on their body weight and health condition. It is, therefore, necessary that further research be done to determine the diet that is most suitable for a particular composition. This is the kind of nutrition that has the least negative impact on health, and one which most hotels do not offer. This affords Gold’s the opportunity to take advantage of a niche in the market, and achieve a competitive edge in the industry, while helping society better deal with obesity, a serious health concern that has been getting more attention (“History Lesson, “2008).
Production of gym equipment for sale Another noticeable trend in the industry is that consumers are establishing their own gyms in their homes, which are easily accessible and where they do not have to pay for membership (Keller, 2005). From 2009 to 2010, the demand for small fitness equipment in the home nearly doubled from 25 percent to 57 percent (Hale, 2011). This means that, in the future, Gold’s will experience a reduced subscription rate as more people opt for in-house gyms (Schmidt, October 2012).
To ensure that it remains in business, the company has to come up with mechanisms in which it can take advantage of this changing trend. One way of doing this is by developing gym equipment that can be sold to clients for installation in their houses. To do this, the company will establish a design and production center to produce gym equipment in large quantities for sale. The products being offered by the company will then be arrested to the existing clients, as well as advertised through the different forms of media to create customer awareness.
To attract a substantial demand, the company will hire experts who will be responsible for installing the gym equipment for clients who purchase the equipment free of charge. The after sale service could also extend to offering free maintenance services to the clients. With such an undertaking, Gold’s is assured of remaining in business even with the changing trend of fewer gym subscriptions. The trainers hired by the company could also be used to offer training revise to clients in their homes at a fee paid directly to the company.
In this way, the trainers hired by the company can be retained, even with the reduced number of in-house customers, and can continue offering their training services. The new business developments by the company have the potential to not only ensure that it remain relevant in the industry, but also propel it to higher levels in the marketplace. The introduction of nutritional diet offerings, for instance, will help to capture the client market that is shifting from attending the gym to consuming a balanced diet to maintain fitness and health.
The production and sale of exercise equipment has the potential for capturing those clients who are opting to set up at-home gyms so that they do not have to subscribe for gym services. These measures do not only ensure that Gold’s remains competitive in the industry, but also increases the company’s product offerings, and subsequently, the revenue base. Marketing is important for identifying and creating awareness of new products and services that a company plans to offer. In this case, Gold’s will come up with the most efficient marketing exchanges that will enable the company to attract a higher level of demand.
Carrying out research to identify customer preferences will be critical to ensure that the diets and gym equipment developed meet consumer needs. Creating awareness of the new product offering is also critical since consumers will not purchase advertising, such as television, radio, newspapers, and the Internet, with emphasis on the advantages and benefits that come with the new product offerings. Conclusion The ability of an entity to remain competitive is determined by its capability to inform to the changes in the market.
Gold’s Gym International operates in the health and fitness industry where it has developed over the years to become a market leader. The company has been able to cope with the changes in the industry by developing equipment and new gym services that conform to the changing market trends and to the special needs of its members. One way that it has been able to cope is by taking advantage of the changing technology and introducing state-of-the- art gym equipment. The company, however, needs to come up with mechanisms that ill enable it to adapt to the changes expected in the future.
Understanding what prospective and current customers desire and expect from going to the gym are key to future success (Fallow, 2004). One of the anticipated changes in the industry is the tendency of people opting to set up gyms in their houses, rather than subscribing to gyms. In this case, Gold’s should consider production of gym equipment that will be sold to these very clients. Another anticipated change is the tendency of people to consume nutritious and healthy foods that will maintain their bodies perfectly, laminating the need to go to the gym.
