Strategic Management

Executive Summary

Strategic management is the crucial management tool for analysing and monitoring the strategies that can help organisations in enhancing their performance and helps in achieving success. The report is prepared on Study Active fitness educator company in the UK along with analysing three of its competitors. Their competitors analysed are YMCA Fit, Educate Fitness, and Fitness Circle. Various strategic tools are utilised for analysing the external and internal environment of the company. From external analysis, it has been found that the company faces tough market competitiveness. On the other hand, there are very few political rules in the fitness industry but they have to focus safety of their students and offer better quality. From the internal analysis, it has been found that the company provides various offers to enhance customer satisfaction and their resources can be utilised to attain sustained competitive advantage. At last, various opportunities are there that can help the organisation in achieving greater benefits.

Introduction

Strategic management is described as the process of monitoring, planning, analysis, and implementation of strategies that are required to meet organisational goals and objectives. It can be seen that market environment and trends are constantly changing that adequately requires changes in strategies continuously for achieving organisational growth and success (Hitt and Duane Ireland, 2017). It helps organisations in achieving a competitive edge over their competitors. The report is aimed at analysing the market competitiveness, internal and external environment of Study Active, UK. The competitors whose critical analysis will be done are Educate Fitness, Fitness Circle, and YMCA Fit. It can be observed that the population of the UK is highly concerned about their health and during this; the company can acquire greater benefits by educating individuals appropriately. The report will utilise various strategic management tools for analysing the market competitiveness of the company. It includes PESTLE and Porter’s five forces for identifying the external factors affecting business growth. On the other hand, SWOT, Resource-based values, and VRIO will be used for analysing the internal capabilities and resources of the company.

Brief overview of Study Active

Study Active is the UK’s leading provider of Gym instructor and personal trainer courses established in 2015. The company acts as a small and medium enterprise having less than 25 employees with revenue of $5 million. It is an active IQ-approved centre along with CIMSPA and REPs endorsed status. The company utilises various learning delivery methods that include practical workshops, individual coaching, e-learning, webinars, and tutorials for empowering individuals to become fitness professionals.

 1: Study Active Logo.

(Source: Study Active, 2021)

The company faces challenging market competitiveness as many of the companies are entering the market looking at the emerging concern of individuals for having fit life. Their competitors that will be discussed are Educate Fitness, YMCA fit, and the Fitness circle.

External environment analysis

PESTLE analysis

Political: It can be seen that there are very few concerns that a fitness organisation has to be aware of like trade restrictions or taxes. Study Active can take advantage of the UK’s government stability to achieve success and plan strategically. On the other hand, the UK government also helps SME’s financially so they can invest in the growth of their organisation.

Economic: The economic stability of the UK can be a beneficial factor for the fitness organisation. It needs to be observed that during the economic declination there can be seen a decline in the customers as well because it is counted as leisure service providers (Petrova, 2021). It is because people will not like to spend money on leisure activities during an economic crisis as they want to meet their necessities initially. It can affect their business growth negatively.

Social: Socio-cultural factors are the essential factors that can affect business growth. It can be seen that the population of the UK are highly concerned about their health and fitness. This demand is beneficial for the company to attract more customers. Their competitors are also performing well and it can affect their potential customer base (Lam and Zhang, 2020). For this, they have to analyse customer demands and improve the customer experience so they can attract more customers. Individuals belonging to every age group are involved in getting fitness guidance and it can be advantageous for the company.

Technological: Increased technological advancements can act as challenging and beneficial for the company. It will act as a barrier because it will make it difficult for new entrants to enter the market but it will pressurise the company to meet the customer demands (Adedoyin and Zakari, 2020). Study Active offers online education and e-learning to their customers that show their involvement in adopting technologies adequately. Similarly, their competitors are also adopting these facilities that enhance market competitiveness.As per The Fitness Circle, (2021) the fitness circle is described as the leading digital fitness education provider and it can affect the customer base of study active.      

Legal: Various legal laws come into the picture when it comes to the health and safety of their customers. Study Active needs to follow all the instructions so they can maintain the quality of equipment and it doesn’t affect the health of customers negatively. It also requires proper training and development programs of employees so they can provide effective education as it can be a concern to health issues. According to Educate Fitness, (2021) the Educate Fitness promises to offer best quality training and also provide employment and it can be threat for Study Active.

Environmental: Study Active needs to be aware of environmental laws regarding the consumption of electricity (Hendry et. al. 2018). Various equipment are there that work on electricity so they must take actions for adopting renewable energy.

Porter’s five forces

Bargaining power of suppliers: The power of suppliers is low to moderate as there are many suppliers of gym equipment. The organisation must keep strong relationships with their suppliers so they can get great benefits in terms of profit-making.

Bargaining power of buyers: The power of buyers is high as there are various fitness training centres in the UK and that can be disadvantageous for the company (García-Fernándezet. al. 2018). It is the responsibility of Study Active to work for increasing customer satisfaction for holding a potential customer base and increasing them.

Industry rivalry: Various competitors are there in the UK that increases the market competitiveness. It has to be noted that Study Active operates as SME and their competitors are well-established and can affect their customer base (Chouhan and Yakoub, 2020). Fitness circle offers great digital fitness education to their customers that are essential after the crisis. On the other hand, educate fitness empowers people for getting trained as health and fitness professional and also offers employment as they have close ties with different gyms. This increases the competitive force on Study Active continuously.

Threat of substitutes: Various substitutes and fitness education centers are in the UK impose a high threat on Study Active. For instance, Education Fitness provides qualitative training along with helping individuals to learn appropriately. On the other sight, YMCA Fit is operating in the market for 35 years that allows them to come with innovations in their services (YMCA Fit, 2021). This helps the company in offering qualitative education helping professionals in standing out from the crowd.

Threat of new entrants: The threat of new entrants is low to moderate as the company is operating for the past 6 years in the market (Baena-Arroyoet. al. 2020). It will be difficult for new entrants to compete against Study Active. Being an SME, the threatening power of new entrant’s increases as reaching their level requires low investment.

Resource-based view

Resource-based view helps in analysing the resources of organisation that is useful for gaining competitive advantage. It is the best way of analysing the external opportunities after identifying the resources so they can be utilised adequately (Collins, 2021). The resource based view is highly dependent on the organisational resources so the company can enhance their organisational performance. There are basically two types of resources including intangible and tangible.

Tangible resources: It includes all the physical things that are assets to the organisation. These are the resources that can be bought by other companies easily and offers little advantage to the company (Alexyet. al. 2018). Resources acquired by Study Active includes buildings and area they operate and gym equipment for offering training. On the other hand, their competitors have more assets as compared to Study Active.

Intangible assets: These assets are the resources owned by the company but have no physical presence. It includes brand reputation, financial assets, and intellectual property (Guptaet. al. 2018). Building a brand reputation takes a long time and it cannot be bought by other companies. These are the primary resources offering a sustainable competitive advantage. It is mandatory to manage these resources otherwise they can be lost.

Based on the RBV model it can be assumed that resources could be heterogeneous and immobile. It is assumed that every organisation possesses different skills and capabilities that help in differentiating the companies. As there are various forms of employment in the market and amount of resources implementing strategies can help the organisation in achieving market competitiveness (Miller, 2019). For example, market competitiveness between Study Active and YMCA Fit could be a great example of understanding the way of using resources differently so they can achieve a competitive advantage. It can be observed that YMCA is operating in the market for 35 years so their brand reputation is more as compared to Study Active (YMCA Fit, 2021). On the other hand, Study Active doesn’t copy YMCA strategies as it requires huge investment and this shows the heterogeneity in the YMCA resources.

Furthermore, resources are immobile as the resources can’t move from one company to another. Because of this feature, companies are not capable of replicating the resources and plan for the same strategies as their competitors (Hoskissonet. al. 2018). Intangible resources are immobile that include brand equity, reputation, processes, knowledge, and intellectual property. For example, the Fitness Circle is known as the provider digital fitness education in the UK and it can’t be copied by Study Active imposing competitiveness in their success.

VRIO Framework

Even though companies have immobile and heterogeneous resources it is sometimes critical to achieve market competitiveness and sustain in the market. The framework helps in identifying the resources that are valuable, rare, inimitable, and non-sustainable (Chatzoglouet. al. 2018). If all the elements are in the resource, then it helps the organisation in gaining sustained competitive advantage. It would help Study Active in analysing the competitiveness of their resources so they can gain a sustainable competitive advantage. It would help them in implementing new opportunities so they utilise resources adequately.

Gym equipment’s and physical assets: These products are valuable to the company but they can be bought by other companies decreasing their market competitiveness (Ariyani and Daryanto, 2018). On the other hand, their competitors already have this gym equipment so they are not rare in the market. It can be imitated by another fitness provider. Looking at all the elements it can be declared that these resources don’t offer a sustainable competitive advantage to the company.

Financial resources: The financial resources of the company are highly valuable to them and they are rare in the market as their finances can’t be found in other organisations. Taking about imitability, it can be imitated by other organisations and they can make the same financial resources as Study Active. So the financial resources of the company don’t offer sustainable market competitiveness.

Employees: The employees are valuable resources to the company as the organisations have trained them and prepare them to offer education. They are rare in the market as if the company has employees then they can’t be employed to other organisation until they work (Miethlich and Oldenburg, 2019). But other organisations can offer great packages to their employee and can recruit them and it can be harmful for the organisation. Hence, employees offer a temporary advantage to the company.

R&D: Research and development of the company is a valuable resource and the research strategy used by the company is rare but every company has effective R&D to meet consumer demands adequately. Following that, researches done by the company can’t be imitated by other organisation. Hence, they don’t offer a sustained advantage as R&D is not rare in the market.

Technologies: Similar to gym equipment, they are valuable but not rare and inimitable. Other competitors can easily implement similar technologies and offer competitiveness (Geraldeset. al. 2019). It is must for the organisation to constantly update their technologies as market demands so they can acquire greater competitiveness. On the other hand, Study Active has less technological resources as compared to three competitors in the market so they must invest on it to increase competitiveness.

Brand reputation: Study Active has effective brand reputation in the market and also provides sustainable competitive advantage to the company. The brand reputation and image they have earned can’t be imitated by other organisations. It is mandatory to manage the brand reputation in the market to hold and attract potential customer base. The market competitiveness imposes great power and due to this they have to work for increasing customer satisfaction continuously.

Local food products: The products they sell to customers are different from other competitors and this can help the company in attaining sustainable competitive advantage. They can refer these products to their trainers and students so they can buy them and refer to others as well.

SWOT analysis of Study Active

Strengths: Study Active focuses on offering better quality facilities to their customer as it plays a crucial role in improving their services. On the other hand, their training facilities have endorsed the status of REPs and CIMSPA. The company also uses blended learning delivery methods utilising practical workshops, personal coaching, webinars, e-learning, and tutorials to improvise customer knowledge (Study Active, 2021). Study Active believes in offering a sensible pricing policy and also provides the option of interest-free instalments on all the available courses. They also provide an opportunity to their customers for funding their course with Government Advanced Learner Loan. They constantly bring an advance in educational technologies so their customer can get a better education.

Weaknesses: The management at Study active underestimates the market competitiveness and it can be a threat to the company in the future as the market competitiveness impose great power. Other than that, the company needs to focus on enhancing its investments as compared to other fitness educators so they can attract more and more customers.

Threats: Study Active faces tough market competitiveness in the market from three of the competitors. Their major competitors are YMCH Fit, The Fitness Circle and Educate Fitness (The Fitness Circle, 2021).

Opportunities: Using digital advancements, they can advertise and promote their services to attract more customers. They can also take advantage of social media influencers for promotions. On the other hand, the company needs to work on bringing digital facilities along with quality gym equipment so they can offer better educational training in the post-pandemic era (Stephen and Ashok, 2021). Last, the company must offer discounts on courses to attract customers and enhance competitiveness.

Conclusion

Strategic management plays a crucial role in gaining competitiveness in the market as it helps in implementing strategies adequately. The report has analysed the organisation from the UK offering fitness training. The primary focus is on Study Active along with critically analysing its competitors including YMCA Fit, Educate Fitness, and the Fitness Circle. Various tools have been used to analyse the external and internal environments of the company. Study Active needs to focus on enhancing its technologies so it can compete against its competitors. On the other hand, they face tough market competitiveness that can be threatening for their customer base.

References

Books and Journals

Adedoyin, F.F. and Zakari, A., (2020). Energy consumption, economic expansion, and CO2 emission in the UK: the role of economic policy uncertainty. Science of the Total Environment, 738, p.140014.

Alexy, O., West, J., Klapper, H. and Reitzig, M., (2018). Surrendering control to gain advantage: Reconciling openness and the resource‐based view of the firm. Strategic Management Journal, 39(6), pp.1704-1727.

Ariyani, W. and Daryanto, A., (2018). Operationalization of Internal Analysis Using the VRIO Framework: Development of Scale for Resource and Capabilities Organization (Case Study: XYZ Company Animal Feed Business Unit). Asian Business Research Journal, 3, pp.9-14.

Baena-Arroyo, M.J., García-Fernández, J., Gálvez-Ruiz, P. and Grimaldi-Puyana, M., (2020). Analyzing consumer loyalty through service experience and service convenience: Differences between instructor fitness classes and virtual fitness classes. Sustainability, 12(3), p.828.

Chatzoglou, P., Chatzoudes, D., Sarigiannidis, L. and Theriou, G., (2018). The role of firm-specific factors in the strategy-performance relationship: Revisiting the resource-based view of the firm and the VRIO framework. Management Research Review.

Chouhan, R. and Yakoub, J., (2020). How do gym brands differentiate in a crowded market?.

Collins, C.J., (2021). Expanding the resource based view model of strategic human resource management. The International Journal of Human Resource Management, 32(2), pp.331-358.

García-Fernández, J., Gálvez-Ruíz, P., Fernández-Gavira, J., Vélez-Colón, L., Pitts, B. and Bernal-García, A., (2018). The effects of service convenience and perceived quality on perceived value, satisfaction and loyalty in low-cost fitness centers. Sport Management Review, 21(3), pp.250-262.

Geraldes, R., da Costa, R.L. and Geraldes, J., (2019). VRIO FRAMEWORK-STATIC OR DYNAMIC?.

Gupta, G., Tan, K.T.L., Ee, Y.S. and Phang, C.S.C., (2018). Resource-based view of information systems: Sustainable and transient competitive advantage perspectives. Australasian Journal of Information Systems, 22.

Hendry, A.P., Schoen, D.J., Wolak, M.E. and Reid, J.M., (2018). The contemporary evolution of fitness. Annual Review of Ecology, Evolution, and Systematics, 49, pp.457-476.

Hitt, M. and Duane Ireland, R., (2017). The intersection of entrepreneurship and strategic management research. The Blackwell handbook of entrepreneurship, pp.45-63.

Hoskisson, R.E., Gambeta, E., Green, C.D. and Li, T.X., (2018). Is my firm-specific investment protected? Overcoming the stakeholder investment dilemma in the resource-based view. Academy of Management Review, 43(2), pp.284-306.

Lam, E.T. and Zhang, J.J., (2020). Differentiation of service quality in the health-fitness setting. Sport Business in the United States: Contemporary Perspectives.

Miethlich, B. and Oldenburg, A.G., (2019). Employment of persons with disabilities as competitive advantage: An analysis of the competitive implications. In 33nd International Business Information Management Association Conference (IBIMA), Education Excellence and Innovation Management through Vision 2020, Granada, Spain, 10-11.04. (2019) (pp. 7146-7158). King of Prussia, PA: IBIMA Publishing.

Miller, D., (2019). The resource-based view of the firm. In Oxford Research Encyclopedia of Business and Management.

Petrova, A., (2021). Post-crisis Preservation of the Business Centers.

Stephen, A. and Ashok, A., (2021). Leveraging business opportunities’ in the fitness industry sector; Post pandemic perspective. International Journal of Aquatic Science, pp.831-838.

Online

Educate Fitness. (2021). [Online]. Accessed through: <https://educatefitness.co.uk/>

Study Active. (2021). [Online]. Accessed through: <https://studyactive.co.uk/pages/why-choose-study-active>

The Fitness Circle. (2021). [Online]. Accessed through: <https://www.thefitnesscircle.co.uk/>

YMCA Fit. (2021). [Online]. Accessed through: <https://www.ymcafit.org.uk/about

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