greating a nationwide health club you are the founder of a health club. the heal
ID: 443136 • Letter: G
Question
greating a nationwide health club
you are the founder of a health club. the health club indutry is quite fragmentd wieth amnay small players and just a few larger players such as LA fitness 24 hours fitness your backers wnat you to devise a a strategy for growing you r business quickly establishing a nationwide chain of health club
1- is there scope of rvalue innovagion in this industry what might a value innovation strategy look like ?
2- descrive how your chosen strategy would enable you to create a national brand and or attain scale economies
3- what would your growth strategy be chaining or franchising be sure to justify your answer
Explanation / Answer
There are very few competitors in health club therefore the entry level into this business would be easy. The strategy should include product differentiation strategy i.e giving something more than the competitor and cost differentiation strategy. The cost differentiation strategy include reeducing the cost without affecting the quality of the product.
A differentiation strategy is the strategy of developing new product and services that offer unique attribute to the customer that are better or different from competitor’s product
2. A cost reduction strategy is the strategy where company reduce major expenses from business to increase profits without compromising quality of a product. ny business which is stuck in the middle has no clear business strategy. Some of the businesses implement ‘build in the middle strategy’ which tries to balance differentiation and cost reduction strategy in order to build a sustainable profit. A successful company adopt one strategy at a time i.e. executing only one of three strategies – cost reduction, differentiation and niche focus. Some company tries to attempt combination of a strategy, which they ‘stuck in the middle’ resulting into low profitable.
3. The groth strategy would include moving the business to e-commerce where people can join health club without physically present and the joinning would be based on subscription. Hence there would be many customer joinning Health Club all around the world. Hence the growth strategy should be changing for the growth of the company
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