Case Presentation- Fitness Plus

Presented By: Dapinder Singh Anish Garg Matt Furedi Matt Osterstrom

Fitness Plus Health Club

Owned by Randy and Martha Campbell

Opened in Nov. 1991 Located in Gadsden,

Alabama Expanded to 3

locations within 10 years

Partnered with Gadsden Regional Medical Center

Activities

Child care for up to 2 hours per day

Complete Aerobics and Strength Classes Program

Home to the Etowah County Sports Hall of Fame

Rear tiled interior area overlooking pool; this space is rentable for children's birthday pool parties

Home to Gadsden Regional Medical Center's Rehab Center

Case Summary

Experiencing growth 1995- 15 members

per hour 2000- 25 members

per hour Complaints from

members increased Study done in May 4 months needed

for construction

Case Summary Cont.

Increasing area population

New YMCA opened nearby

Two other new low cost fitness clubs Oasis Gold’s Gym

Expansion would have to be done before January

Information -What’s Going on today?

Fitness plus is a workout Facility located in North Carolina.

Fitness plus offered various activities such as:

1. Fitness Activities 2. Recreation Activities 3. Relaxation Activities

What’s going on today?

Due to growth in membership and large shifts in demand, Fitness plus is overcrowded.

Average number of members checking in at the existing fitness club is 25 per hour.

Club is currently open 101 hours per week.

Increasing the no. of working Hours.

What’s going on today?

Current Capacity measured as inputs for the Nautilus, Cardiovascular and Aerobics fitness area.

Focus is on the cardiovascular area where demand is over capacity at peak times.

The resurgence of activity in the downtown area has brought increased and new businesses.

What’s going on today?

The current competitors of Fitness Club are:

1. YMCA : They provide all services at very low cost

2. Oasis: Offers caters to young adults. 3. Gold’s Gym: Which is weight and

cardiovascular training only.

SWOT Analysis

Strengths:- Company’s owners have immense

experience in the health club and fitness industry.

Health care program is well thought-out according to the need of common people.

Lowest cost of service in the entire market of Coral Gables.

Company will hire qualified and trained staff

SWOT Analysis continue…….

Weaknesses:- Fitness Plus has less number of trainers

and staff that can become a problem in providingservice to a large pool of members.

Club is short of marketing budget

SWOT Analysis continue…….

Opportunities:- The demand for health care and fitness club

is growing rapidly in USA. Increasing heart and obesity diseases are

causing people to pay importance to exercise. People are getting familiar to going to gym

and health clubs in their daily routine life. A large segment of market is still untapped;

low income area will be of special focus for FitnessPlus, which is totally ignored by the rivals.

SWOT Analysis continue…….

Threats:- Recession and economic downturn can

slow down the growth of health clubs. Low cost offer from well established

competitors. Although it’s a small level threat due to a fact that market is rapidly growing.

Low cost health care equipments availability for at-home exercise

http://www.bizplancorner.com/SWOTSamples/startup-business-swot-analysis.pdf

OWNER’S QUESTIONS1. Were the capacities of the existing facilities

constrained, and if so, where?2. If capacity expansion was necessary, should

the existing facility be expanded?3. Owing to increased competition and growth

downtown, was now the time to open a facility to serve that market?

CASE QUESTIONS

1. What method would you use to measure the capacity of Fitness Plus? Has Fitness Plus reached its capacity?

2. Which capacity strategy would be appropriate for Fitness Plus?

3. How would you link the capacity decision being made by Fitness Plus to other types of operating decisions?

Thanks