Strategic management and competitor analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive summary

A critical examination of the report in regards to Study Active has been taken into consideration, where its internal as well as external business challenges, opportunities and strengths has been identified. Total of four types of strategies has been taken into consideration that includes of PESTEL, Porter, VRIO and SWOT analysis. Examining the PESTEL analysis of external business environment within the UK has been understood for performing future business activities.Study Activeoperates across the niche segments in fitness training like pre and post-natal training.  whereas Careers in Fitness and BODY CORE TRAININGoffers value through the swimming and body posture maintenance crises along with the conventional certifications and diplomas.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

Background

The report has been taken into consideration in terms of performing strategic assessment that is related to the case organisation of Study Active, two distinctive competitors have also been taken into consideration that includes of BODY CORE TRAINING and Careers in Fitness. This report also explains the issues that the organisation faces along with determining the solution for the same. Furthermore, strategic tools such as Pestel and Porter’sfive forces will also be taken into consideration where the business feasibility related to the organisation will be determined while they will be operating within the UK.

Problem statement

The issues that have been identified include of lack of skilled and trained professionals in the health and fitness industry within the UK, taking this issues in the mind the UK training centre is coming up with the idea of offering better health and fitness services that are increasing the level of competition within the fitness industry. Other issues that have been identified include of lack of information to the customers that also increases the risk of lack of brand development. Therefore, the current study will examine the competitors of Study Active and their opportunities for business within the UK.

Strategies

In regards to performing this report analytically and systematically, strategic tools and techniques will be considered that includes of PESTEL, Porter, VRIO and SWOT analysis. During the whole report, critical examination of the case organisation based on Study Active will also be presented with the help of extracting information from secondary sources,

Main body

PESTEL

Political:

UK’s political system is run under the monarchy system where the Prime Minister of the country is considered to be the decision-maker.The political situation of the UK is considered to be challenging for Study Active due to the rise of corporate tax by 19% after the fallout from European Union that is making it difficult for the firm in procuring equipment and goods related to fitness from other countries(Gov, 2020). Besides, it has also been noticed that Study Active along with other fitness firms such as BODY CORE TRAINING and Careers in Fitness faces higher trade taxes of 2.25% that grew by 1% from the start of the financial year(Gov, 2020). Rising trade taxes are increasing the challenges of higher cost expenditure and falling profitability. Hence, operating business becomes challenging in the respective business scenario.

Economic:

UK economy is growing by 1.8% annually, but in a current pandemic situation, it has been estimated that the economy will shrink by 0.6% that creates issues for the Study Active in respect of carrying out their smooth operations of the business(Statista, 2020). The falling down of fiscal policy within the country has also increased the inflation rate within the nation that has made the organisation think twice before they opt to do business in the UK business environment. The growing inflation rate has also negatively impacted on the buying decision-making ability among the customers(Tradingeconomics, 2020).

Social:

People in the UK are open to change and accept innovation with an open arm it is mainly because of the open culture system within the country, that has oped the door of opportunities for the Study Active in operating their business with success within the country. Besides, the purchasing capability of the people has also grown up due to rise in the Average Annual Income by £29,600.00 as a result of which business firm has great growth potential in the UK(Gov, 2020).The growing acceptance of the UK people towards being healthy is also paving the path of growth opportunities for firms like BODY CORE TRAINING and Careers in Fitness in establishing their business and offer services to the UK people.

Technological:

UK’s technology is considered to be one of the most advanced in the world due to growth in ML, AI and network and designing system. The growth in technology assists fitness organisation such as Study Active in upgrading their website in terms of offering better online facilities and payment options that help the firm in roping in customers and build their online traffic. Support from the government of the UK in form of investment by£ 10.1 billion paves the path of growth for the fitness business organisations(Telegraph, 2020).

Environmental:

The UK government has been strict towards protecting and conserving natural resources due to the rise in greenhouses gases. Considering the growing wastages within the environment the fitness institute Study Active needs to comply with The Environmental Protection Act of 1974 to sustain the environment and conserve resources for future purposes(legislation, 2020).The competitor firm such as BODY CORE TRAINING and Careers in Fitness also needs to follow guidelines and policies while operating in the UK business scenario.

Legal:

Labour safety and security is one of the main issues that all of the business firms face while working in the UK. The legislation of UK government has imposed Health and Safety Act 1974, under this act,Study Active need to offer training, equal pay wages, better health and other facilities along with services to the employees so that they can be motivated to perform better for the organisation(Hse, 2020).

Porter’s five forces

Threats from new entrants:

The power of new business entrant is considered to be fairly low that the reason behind it is the huge requirement of capital to procure the equipment, setting up the fitness centre, adding up facilities and paying up the rent. The power of new business entrant is also considered to be low due to their inexperience and lack of unskilled manpower that can capitalise on the changing situation of the business environment(Wheelen, et al., 2017). The business environment of the UK is also changing rapidly due to changes in norms and policies from the UK government, the needs and demands of the customers are also rapidly changing that also makes it difficult for the new business entrant as it increases their capital expenses and risk of sustainability within the competitive market of the UK.

 

 

Bargaining power of the suppliers:

The role of suppliers within the business is considered to be one of the pivotal and critical as because they are the one who manages the resources and procures them at the same time. Suppliers of Study Active also help in promoting the products and services of the organisation that earns the management with a higher reputation and customer turnover(Ansoff, et al., 2018). But considering the power of suppliers in the fitness industry, it has been estimated that they hold moderate power, as because there are a lot more suppliers who suppliers similar resources at affordable prices. Beside, CNF agents and third-party vendors also perform similar jobs like suppliers.

Bargaining power of the buyers:

The power of customers has been recognised as high, as a result of which Study Active will have a tough time in dealing with their changing needs and demand as a result of which it will be challenging for them to establish their business. Some of the factors that contribute towards the higher power of buyers include of availability of substitute brands such as BODY CORE TRAINING and Careers in Fitness that makes it easier for the customers in making comparisons based on price and specifications that help them in making their purchasing decision(Lüttgens & Diener, 2016). Discounts, promotional activities and other trade-offs that are being offered to the customers makes them shift their loyalty from one business enterprise to another business.

Threats from substitutes:

The threat of substitute is also high in the fitness industry the reason behind it is the availability of online courses, videos, workshops and yoga classes. People have the potentiality of accessing information and making up their decision to purchase the product or not as a result of which it becomes increasingly tough for the Study Active to operate within the business environment of the UK. Some other factors that increase the power of substitute product include a saturated market, as there is a lot of options available for the customers to choose their from(Marshall, 2018).

Competitive Rivalry:

Determining the threat level of competitive rivalry for Study Active within the fitness industry in the UK it is considered to be high mainly because of the presence of different types of both SMEs and large competitors(Lasserre, 2017). The growing competition shrinks the market and makes it tough for the Study Active in competition against BODY CORE TRAINING and Careers in Fitness as they also offer a similar type of facilities and workshops that increases competition for Study Active.

VRIO

Valuable:The fitness training and support services offered by Study Active are valuable due to the multi-platform support provided by the company.This creates an opportunity to maximise the value for the customers and creates more ways for engagement. This provides a competitive advantage to Study Active regarding using their resources to attract more customers and support them online(Studyactive, 2020). The company uses the latest featureslike Instagram stories and FacebookLive for conducting online workouts and providing motivation to the candidates especially during the lockdown. This enables them to use their resources diligently.

Rarity:The resource used by Study Activeare rare and not present with the other competitors. This is due to the ability of the company to offer multiple levels 2 and level 3 courses and specializations at 100% finance facility.The diverse and qualified trainers are experienced and capable of guiding the customers of the company towards starting their fitness career successfully. The establishment specializes in providing good training to the candidates as they are taught to swim and maintain body posture and create an energetic environment while being instructors in their professional career. The services offered by the establishment are also rare as they are eligible for MoD funding and scholarship for an apprenticeship, which is beneficial for the customers. Thefirm offers two models of payment as a choice comprising of full payment at once with discount and payment in instalments after getting a job. Otherwise, level 2 and level 3 certificates and diploma in fitness and personal training are also offered by its competitors.

Inimitability:The fitness training industry in the UK is a red ocean now due to the presence of numerous companies offering similar services and the minimum requirements of expertise, experience and capital required to initiate the business. Hence, the resources of Study Active along with are highly imitable considering the tangible resources as the quality of equipment and training space along with online support are almost the same for all the companies.

Organised:The courses and certifications offered by the companyare organised properly to ensure the allocation of time slots and instructor availability for the courses. This also indicates the ability of the company to manage its resources carefully and make appropriate usage. However, there is room for improvement of resources for offeringfresh niche segments including strength and body posture.

SWOT

Strengths:The strengths of Study Active involves the multiple services offered to consumers through the different levels of courses and multiple specialities. The firm has the strength of offeringcareer opportunities and placements through assured interviews with the leading health and fitness brands due to its global reputation and trust. The company has also been awarded multiple times by reputed organizations and while being quality certified by ISO standards and active IQ. The firm also has thestrength of flexibility with full time and part-time courses along with providing assured apprenticeships and interviews for the candidates and has a very good support infrastructure in the online domain.

Weaknesses:Study Activehas the weakness of not being able to leverage the pull strategy of marketing across social media and the internet with the display of testimonials of satisfied clients and alumni. The allocation of individual instructors creates the issue of increased expenses and time constraints for the trainers and extends the course times.

Opportunities:Study Active hasthe opportunity to use the digital platforms and social media to their advantage for offering courses at cheap rates to the consumers and allowing them full flexibility to enrol and participate in fitness exercises from the convenience of their homes(Ansoff, et al., 2018). Providing more focus to the online services would bring more revenue to the companies as the customers prefer exercising at flexible times there in the morning or the evening after work. The firm has the opportunity to create small teams of customers going for make the customers understand that advantage and value of being fit and healthy physically along with having a certificate in Health and Fitness training that can be used as a side income opportunity or freelancing.

Threats:Study Active faces the threat from large corporate fitness training companies and online fitness entrepreneurs. BODY CORE TRAININGand Careers in Fitnessfaces threat from the new companies emerging in the market and the freelance trainers operating across the social media platforms like Instagram and Facebook. There is also a threat from the busy lifestyles of people and the less time of going out and joining fitness gyms and enrolling in courses. The tendency of many people to offer gym instruction without proper formal certification is also a threat for both the companies.

Conclusion

The study was based upon the strategic analysis Study Active based on its external environment and internal competencies.The PESTEL analysis indicates Study Active to face threats due to rising political unrest and tax in the UK whereas the SWOT analysis indicates the strength of having versatile courses and financing facilities. The company can offer value to the customers by providing the flexibility of payment of the course fees. BODY CORE TRAINING and Careers in Fitnesshave been found to be the competitors of Study Active capable of procuring the company’s market share.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

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