Analysis of the most important external environmental factors

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Table of Contents

Introduction
External environmental factors within Town Sports Inc International
Analysis of most important internal strengths and weaknesses
Town Sports Inc competitive position and possibilities
Conclusion
References

Introduction

There are elaborate principles instituted for the purposes of ensuring attraction and retention of clients within fitness industry. This can be drawn from the nature of world-class modern facilities required. The issues surrounding retention and attraction of clients remain one of the most concerns within the industry. This has led to increase in competition amongst smaller companies within the industry hence making operations more complicated (Mintzberg et al., 2003).

External environmental factors within Town Sports Inc International

There is enough evidence to prove that unlike most other major competitors within the market, Town Sports focuses on building current credentials and reputation based on high quality service provision amongst high-end and low-end consumers. Some of the most important external factors affecting Town Sports include location and accessibility. Most consumers choose their venue for fitness based on these two factors.

At the same time, financial and time commitment are necessary considerations as well as catering for those having tight work schedules and unable to commute to the companys fitness centers. At times customers feel demoralized when it comes to covering long distances for the purposes of reaching fitness centers. Other factors considered involved encouraging employees by offering corporate contracts at discounted within office premises (Town Sports International, 2012).

The nature of consumer demand within some areas has also contributed towards the growth of Town Sports Inc. This is since increase in demand signifies existence of potential target market and increase in physical health and fitness awareness. Composition of the target population in terms of age has also influenced the companys performance.

Town Sports basically serves youths and adults, with the majority age being between 15 to 50 years. Exposing this group of people to health consciousness through physical exercises makes them remain fit even in old age. The nature of services offered within the premises has also determined the percentage of attendance. This is since services are directed towards specific age range such as Yoga classes for seniors and appropriate classes for youths and teenagers (Mintzberg et al., 2003).

The company has considered cultural trends, through creation of national awareness campaigns concerning importance on physical fitness. There have been increased media campaigns as well as educational programs for the purposes of creating awareness. Cost of membership is reviewed frequently since it provides major stumbling block towards profitability within the industry. Various age groups are offered affordable prices according to their capabilities (Mintzberg et al., 2003).

Analysis of most important internal strengths and weaknesses

Strengths

Success of Town Sports Inc depends on its ability to offer credible corporate culture and ability to implement creative marketing principles. The kind of leadership within Town Sports focuses on providing consumers with new equipments at affordable costs.

Such kind of leadership strategies are considered integral in the process of establishing accepted culture within the corporate community. The management engages in much creativity, especially through introduction of technologically proven essential facilities. Such essential facilities provide customers with desired convenience and efficiency (Town Sports International, 2012).

Management focuses on discovering successful business aspects capable of withstanding any difficult times within the industry. This is not necessarily in contrast with other business enterprises since many practices within particular sectors are similar across the industry.

There are also other key points involving innovation and development of many unique business practices by the organizations management. In matters of differentiation, Town Sports Inc operates multiple clubs within populated regions making it easier for the company to serve targeted customer bases. The companys operation of close to one hundred and forty clubs equivalent to control of at least 2% of the market (Town Sports International, 2012).

Weakness

There is lack of customer loyalty to Town Sport brand which makes it loose considerable number of customers. Consumers are basically at freedom to choose fitness club of their choice since there are no dominant companies within the industry. Town spot fitness facilities are only concentrated to the east coast meaning that a large population within other regions are still deprived of their services.

Town Sport Inc applies the use of cost leadership method which usually focuses on meeting consumer demands through efficient services at affordable prices. There is focus on satisfying customers basic fitness needs and also minimization of costs by offering similar services in all centers. The company utilizes available extensive knowledge of the management team as well as innovative marketing strategies to capitalize on expansion (Town Sports International, 2012).

Town Sports Inc competitive position and possibilities

Based on Porters five forces, there is growing interest within the industry owing to low barriers to entry. This has made threat of new entrants to be high within the industry. At the same time there is low switching of costs based on the fact that, consumers choose preferred fitness centers based on accessibility and not brand name.

Lack of strict government regulations and also lack of dominant centers has led to increase in the number of new entrants. This ultimately explains existence of low barriers to entry with the only barrier being high nature of initial capital investment required for opening new facility (Barney, 2007).

Bargaining power of suppliers seems low since the industry requires contributions from few suppliers. The only distinguishing factor the company depends on its ability to offer new equipment based on improved technology. This is because there is similarity in kind of services offered by all companies involved.

However, suppliers may have influence in offering technologically improved equipments since there is vast number of suppliers within the market making competition stiff amongst suppliers hence equipments low prices. This makes Town Sport Inc and other companies within the industry depend so much on membership revenue due to high bargaining power of buyers.

Low costs involved within the industry has made it easier for consumers to control prices prompting the company to lower prices for the purposes of remaining competitive through increase in number of customers. This presents one of the biggest challenges since low prices benefit consumers but decreases industry revenue returns.

The company faces high threat of substitutes based on high presence of other recreational activities. Outdoor activities have remained popular and some of the activities are cheaper compared to gym subscriptions. However, such activities can at times be affected by weather presenting an advantage to gymnasium facilities. The other substitute includes home-based exercise equipments found amongst higher-income consumers with limited free time (Barney, 2007).

Conclusion

Town Sports Inc strategies mainly target increase in number of customers, and enhancement of their loyalty to the facilities and services. The organizations main task involves retention of loyal customers within regions served and beyond. This ensures consistent increase in market share for various services provided. Managing the task of capturing attention of potential clients assures that the fitness company receives positive results.

References

Town Sports International. (2012). Company Overview. Retrieved from http://mysportsclubs.com/

Barney, J., B. (2007). Gaining and sustaining competitive advantage. (3rd ed.). Pearson Prentice Hall: Upper Saddle River

Mintzberg, H., Ghoshal, S., Lampel, J., & Quinn, J. B. (2003). The strategy process: Concepts, contexts, cases.(4th ed.). Prentice Hall: Upper Saddle River

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