Application of Business Concepts to Case Study

ASSESSMENT 2: Application of Business Concepts to Case Study

Introduction

Australia’s fitness industry has been developed steadily in recent years, and the growth of 24-hour gyms is remodelling the industry. Anytime Fitness and Jetts are among the best 24-hour gyms in Australia (D’Mello 2014). This report will describe and evaluate the business models of these two fitness clubs mainly using SWOT analysis, and draw a conclusion on which model is relatively sound.

Case Study Overview

Anytime Fitness, which has more than 2,000 gyms operating in over fifteen countries (Anytime Fitness 2014), has opened 290 gyms since 2008 in Australia and now it has more than 275,000 Australian members (Whyte 2013). The business model of Anytime Fitness is partly based on expanding rapidly in order to dominate the market (D’Mello 2014). According to Daley (2014), Anytime Fitness ranked first on this year’s Top Franchise 500 list, demonstrating it has a strong financial position and fast growth rate. Anytime Fitness offers its franchisees an innovative business model and convenient access for its memberships. Using creative technology, Anytime Fitness has established an e-learning program for its franchisees (D’Mello 2014), and integrated it with online community (Anytime Fitness 2014). Moreover, with one standard membership, members are allowed to entry thousands of other Anytime clubs worldwide (D’Mello 2014).

Jetts now operates 200 clubs and most of them are in Australia and New Zealand (Heathcote 2013). In order to expand its business, Jetts is collaborating with overseas partners in appointed countries (Jetts 2014). As a pioneer of low-cost model of gym industry, Jetts minimizes overhead expense and has small-scale employees (D’Mello 2014).  Moreover, by adopting no-lock-in contracts, there is no extra cost for unused facilities (D’Mello 2014).

Critical Analysis using Business Concepts

SWOT is an effective tool for identifying and interpreting the internal and external information of a company in order to plan a successful strategy (Mansoureh 2011). Strengths, weaknesses, opportunities, and threats should be identified and evaluated in terms of Anytime Fitness and Jetts respectively.

The financial strength of Anytime Fitness would increase their chance to grasp potential opportunities. As a matter of fact, the market of fitness in Australia is still developing and there are enormous opportunities for companies to expand their business. According to Heathcote (2013), the maximal percentage of Australians who use gyms is thirteen, while the minimal number in a mature market is sixteen percent, indicating that the demand for 24-hour gyms in Australia is expected to increase. Facing potential opportunities, the financial advantages of Anytime Fitness would enable it to pursue different options and those opportunities. For example, if there were emerging market for youth fitness, Anytime Fitness would take advantage of its financial resource to capture the market immediately, thereby strengthening their dominant position. In addition to financial strengths, the wide distribution, convenience, flexibility and outstanding facilities of Anytime Fitness are widely recognized, and these brand recognitions would eventually facilitate the expansion of its business.