GoodLife Fitness Clubs

Name: Simarpreet SinghCourse Code:

Teachers Name: RubinoffDue Date: Tuesday June 12, 2007

Page 1: IntroductionPage 2: Table of ContentsPage 3: Strategy ModelPage 4: Goal StructurePage 5: Porter’s Five Forces ModelPage 6: Porter’s Five Forces ModelPage 7: Leadership StylePage 8: Organizational HealthPage 9: Case StudyPage 10: Case StudyPage 11: Case StudyPage 12: Case StudyPage 13: Case StudyPage 14: Financial Analysis

Strategy Model:

Goal: They are planning to focus on services rather than sales. Company is

trying their best to increase the retention rate. Krista and others employees

are more into the improving of GoodLife services so customers can stick to

GoodLife Fitness for long run. GoodLife Fitness operation is trying to

improve their professional approach in managing.

Product Market Focus: From the beginning, the company did well into

providing the best in equipment, facilities, and service, with a well-trained

staff. GoodLife Staff was to offer high-quality service with education and

training. Now, GoodLife is only hiring individuals with right attitude (i.e.

customer focused). GoodLife spend 40% of their revenues into advertising

program in each season.

Core Activities: GoodLife have core activities like Fit Fix training and the

PUNCH program. They raised $500 000 through Core activities. GoodLife

have four sales associates (full time) are responsible for getting new

members. Personal trainers work with individual club members. Service

employees introduce new members to the club and its philosophy through a

series of programs on fitness and equipment use.

Value Proposition: GoodLife got larger to 30000 square feet and had an

open concept design with an extensive range of equipment and programs.

Each week GoodLife has staff meeting where they discuss a number of

issues, including how to improve the club. Krista wants the front desk

employees to focus into customer in the way of socializing and treat them

nicely. GoodLife has new employees and trainer to focus more in services to

keep the members for long-terms. If any member brings more members to

GoodLife then both members both will get discount.

Goal Structure:

Hard Goals: GoodLife’s Hard Goals are to improve the retention rate and

financial rate. Currently GoodLife’s Retention rate is 60% and Krista is

trying her best to keep members stick to GoodLife for long term. By

improving your club’s retention rates from 60 to 65 percent, based on last

year’s figures gross revenues would increase by over $35,000. Krista is

being flexible to the employees. GoodLife’s long-term goal is to raise the

sales percentage. They are doing survey on through what people are joining

the club so they can focus more in the specific advertising so they can get

more customers.

Soft Goals: GoodLife is planning to reduce money in the advertising.

Presently they are spending 6% of their revenue into the advertising. They

are focusing specifically into the work. They are hiring right employee for

the right spot. They placed two staff members in the front desk to remember

customers name and to socialize with them so they can feel relaxing in the

club. GoodLife is looking also on members’ complaints so they can improve

their service and offer the best to their customers. Krista is also teaching new

employee how to take care of members and how to be friendly to them. She

also increased employee’s wages so they can stick to GoodLife for long.

Porter's Five Forces Model:

Industry Competitors:

In the area of Kitchener and Waterloo, there is 15 fitness clubs. But

GoodLife has four majors’ competitors. Four majors competitors are

two YMCSs, The International Family Fitness Centre and Popeye's

Gym. Compare to competitors of GoodLife, GoodLife is doing much

better than their competitors. GoodLife offered cheap price for good

service and for more equipment. Krista is taking care of all problem

that arise in GoodLife such as a particular staff member was not

friendly and Krista dealt with the complaints right a way. Krista has

hired two special employees to take care of in the front desk just to

greet customer nicely. It could be because of those reasons GoodLife

is better than their competitors. GoodLife position is between top four

fitness clubs. GoodLife is better than their competitors because they

are lacking some kind of their goods in some parts like not treating

customer nicely or by not giving them good training. The fitness

market is growing at approximately 6 percent a year. GoodLife can be

at number one among their competitor by expanding their fitness club

and by hiring more employees for good services.

Potential Threats:

Potentially they want new software systems that can specifically tell

how many members had not visited the club for particular period. So

staff could contact members who had not visited for a specific period.

With this software retention rate might improve. There are other

available approaches to potentially such as any activities that built a

greater sense of "community" would increase interaction between

members and a sense of "belonging." Another Target that Krista

wanted to improve that was to make "motivation" to the front desk

associates. Krista was thinking of to "swiping machine" to be used in

the front desk to collect members data.

Buyers:

GoodLife buyers mostly are older than 18. Mostly people who are

involved with GoodLife service are people who are not in good form

or people who wants to stay in form. GoodLife’s buyers are more

females than males because they want to look fit, after having baby,

etc. GoodLife buyers’ retention percentage is 60%, 40% people are

who are not familiar with employee or people who have barely time to

come to GoodLife. Ten to fifteen percent of GoodLife’s buyers do not

renew their membership after months or years because they don’t

find fitness club interesting anymore.

Substitutes: People can eat healthy food and go for walk or cycling

after eating. Some people play sport thrice a week for an hour to stay

healthy. Some people work physically such as a labour work or

factory work to stay in good shape. Some people visit doctor to stay

aware of nutrients. Peoples often take care of their self by not eating

a lot of fast food.

Suppliers: American company supplies mostly GoodLife

equipments. Fitness like GoodLife buys equipment in big amount so

they can get equipment in low price. American company supplies

same equipment to all the fitness maybe that’s why all the fitness has

same equipment but different quantity.

Leadership Style:

Directive Style: GoodLife’s senior (Krista) is more directive most of

the time because she is responsible for the fitness club. Mostly, she

has to take a quick and efficient decision for the goods of the club.

She has to be directive because if revenue goes up and down it’s

because of her leadership style. I would say the 60% retention rate is

still 60% because of her. She can do better by asking for opinion to

others or by following some kind of pattern set by operations. She

have no other choice than be directive because she do not any other

co-worker to help her out in her position and she is the only one have

to handle all the clubs activities. Before taking any decision it is

always good to evaluate them by enquiring the good influence and

bad influence of the directive decision.

Participative Style: At some point of view she should ask for opinion

to other how clubs can improve or what’s good for the fitness. That

ways others employees will feel that they belong to GoodLife. That

might improve retention rate and some employees might not quit the

job. Krista is also participative person because when she hired some

new employees, she trained them and also gave them good salaries.

Most of the employees left before because they didn’t felt any interest

in the job and they were no particular training for them. But now

things are changing in good ways. Retention rate might increase later

on because Krista is trying different good things. It’s better if Krista

ask employees of other clubs to visit GoodLife and see how things

can improve. Any member or any employee could feel free to consult

the improvement of the club.

Organizational Health:

Enthusiasm: Krista has great enthusiasm for the work. Somehow,

her motive is to improve GoodLife’s retention rates. She is always

busy in member’s services and with employees. She should be more

enthusiastic of employees because they are the one who take care of

customers.

Boundaries: GoodLife’s employees work more individually because

Krista has given single and different task to all employees. They are

few employees who work in groups like front-desk, etc. The retention

rate is 60%, which shows they are loyal to GoodLife. Retention rate of

60% is not that bad. They can do better by getting more involved in

GoodLife. Krista has increased they salaries and because of that they

should do more than just what they are doing now. Krista is not really

cooperative. She is independent person. She won’t really ask for

opinion to others employees.

Problem Solving: GoodLife does not much problem in their club

except for main issues like retention rate and improving GoodLife’s

service. Their problem solving style is directive. Employees do

whatever is given to them by Krista. Employees are mostly never

asked to give their opinion while a problem is occurred. Employees

should take the opportunity to handle the problem by their self.

Learning and Sustainability: Some new employees learn from

Krista how to manage customer’s services. Mostly customers are

trained by their self and by their mistakes. Krista has set one good

example for everyone that how she reaches to the position where she

is today. That example could be given to the employees to inspire

them to work hard.

Case Study Method:

Identify the Problem: The problem GoodLife is having that their

service is not as good as their customer expect. GoodLife's

employees do not have confidence and they work, as they do not

belong to GoodLife. Krista cannot handle GoodLife by it self, she

need someone as same level as her to help her with her position.

GoodLife advertisement system isn’t good and neither GoodLife

fitness club. GoodLife suffer with future plans.

Invest money in specific (news, radio, etc.) advertisement

Full training should be given to employees

Good outlook and in look of GoodLife

Advance future planning

Availability of new equipment

High level wages

More programs and activities

More Co-worker

Knowledgeable trainers

Improvement in services

Training should be available in different language

Invest money in specific advertisement: GoodLife should be focus

on specific advertisement such as television commercial. Mostly

people like to watch television. In coming year, television channels

are allowed to advertise two times more than today. So that can

make people to watch GoodLife commercial two time or more.

Advertising on radio is sort of wasting time. Mostly people listen radio

in car during they doesn’t have anything else to listen. So it’s kind of

useless to advertise on radio unless you offer some price that take

attention of listeners. Television advertisement could be more

expensive then radio, yellow book and other advertisement. But its

worth to spend money on television and rather than spending money

on all different kind of advertisement. Unfit people stay home and

watch television and by looking at GoodLife advertise they might join

fitness. They should show how people got into fit form by GoodLife in

the commercial.

Full Training should be given to employees: I think people will go

to the fitness where they can find trainable people to take care of

them. Someone who is working there for long or by someone should

be hired to train new employees. New employees with experience

given can make GoodLife look good to customers. Confidence is big

thing on new work and employees can have confidence if they are

trained properly and only if they feel safe. Hiring some to train new

employees might cost $3000 to $4000. But it worth because

someone is specially there to take care of new employees rather than

Krista take care of them and waste her time.

Good outlook and in look of GoodLife: GoodLife is a big and

professional fitness club. GoodLife must look brand-new and some

entertainment club to exercise. It should look huge fitness from

outside and from inside. They should have pool inside, private

washroom, free towel services, proteins pills and cafeteria with

healthy foods.

Advance future planning: GoodLife’s should have better future

planning and advance equipment to do better than their competitors.

GoodLife’s should be informed about how their competitors are doing.

That will attract more people to GoodLife.

Availability of new equipment: GoodLife should pay good tip to

their supplier to get availabity of new equipments as soon as it’s

available in the market. They should advertise their new available

equipment in the television commercial or on their flyer.

High-level wages: New employees should get good wages, good

benefits and race of $0.25 par 6 months. That will stick them to stay

with GoodLife for long-term. So, Krista doesn’t have waste her time

and money on new employees to train them.

More programs and activities: GoodLife should have different

program and activities each month. More different activities will bring

interest to the customers. Some activities should be for kids to keep

them busy.

More Co-workers: Krista and other employees need co-worker to

help them in work and try to welcome more customers. Especially

Krista need co-worker to because she is always in her work and has

no time to look on all the activities. If she get co-worker that will make

her work easier and it will give her more time to look on employees

and spend time with customers.

Recommendation: I would recommend strongly to GoodLife fitness

club to have more people in the operation. That will make a lot easier

for Krista to handle GoodLife. I think she is lacking her attention to

some area of service because she does not have enough time to go

through all. By having more people in operation might create positive

outcome. By having someone, the same rank as herself, to cooperate

with her at work she might improve the GoodLife. The only way

GoodLife can make its money is if it offers a respectable service to its

customers. Customers will love that if any member from the operation

take care of them and treat them nicely. Also, I would recommend

Krista to look at certain kind of service area. She should look for new

things to offer more services to customers. She should come up with

new with things such as having pool in the fitness club and

entertainment games to keep kids busy so they parents can enjoy

fitness. These sorts of things may get better retention rate. That can

happen only if someone helps her out. Or else she focus to different

services every day and that will make her keep latest of each single

task. By going through task once a while will let her inform what is

missing around or what is not going well. I recommend Krista to be

updated about GoodLife’s competitors. She should know what the

good things other fitness has are but GoodLife does not. That way

might bring some customer to GoodLife. People always goes to place

where they have more option and good prices. There is Jane to in the

operation can help Krista to make little easier for her or Jane can be

partner of Krista and take more responsibilities. That can happen only

if someone helps Krista in her work so she can have time to pay

attention to other responsibilities. Krista should have link with seniors

of other fitness club to for get help in tasks or what’s new with others

fitness. There is another way to get help to improve the retention rate

is by asking to senior about how GoodLife can do better. GoodLife is

huge fitness club and only one person is responsible for all activities

happen there. I would say there should be more people in operation.

The retention rate is 60% maybe because it is too much stress for

one person to handle. I think so much stress is not letting her focus

on her work properly. The way she reaches to top spot I think she can

do better and come up with new things if she does not have a too

much stress. There is so many ways to approach improvement of

retention if she looks outside of fitness club.

Implementation:

Short run: Krista should give more tasks to all the employees and

make them responsible. By doing that, she will have more free time to

spend with customer and try to find what is their needs. She should

try to spend more time outside of her office.

Medium run: Krista should look for useless expenses and try to

reduce them so revenue can increase. If revenue increases then

Krista salaries will increase to. She should talk to other fitness

employees to find out what can improve GoodLife. She should look

for student to help GoodLife in exchange giving them 40 hours. She

should be more focused on how GoodLife can make money through

small different activities.

Long run: She should look for evaluate some of the employees for

promotion. She should evaluate him or her by giving them different

tasks each week and see how good they are with members. She

should also give them bonus or race to motive them to work more

hard for GoodLife. Their long-term goal should be to increase

retention rate 60% to 65%. She should try different things to improve

it such as raise money for charity, etc.

Financial Analysis: After reviewing, the retention rate shows

decreasing value because member’s amount is increasing. Day a day

members are joining fitness which mean club is doing well.

GoodLife’s revenues are much higher than expense. On exhibit its

shows that GoodLife business sales are increasing. Their expenses

are 80 percent close to revenues (100%). GoodLife’s membership

revenue has increased pretty good. She should invite some kind of

hilarious people to entertain them while they members are exercising.

Hilarious person could one of her friend or her relatives. She should

try to find someone from outside that might cost her $200 to 300$ par

days. She can ask to top dog for co-worker or if she is allowing hiring

people for help her.