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Case Study, Stage 1: Business Environment Analysis

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Case Study, Stage 1: Business Environment Analysis
IFSM 300
Instructor: Walter L Blount
31 March 2013

The health and fitness industry is growing at a remarkable rate in spite of the turbulent economy. According to a 2011 IBISWorld study, revenue for the health and fitness industry is expected to rise 2.6 percent each year to annual earnings of $28.2 billion by 2016. Combine that with growing concerns about obesity and associated health issues and there has never been a better time to own a fitness facility. Most gyms offer a variety of services to address the needs and convenience of the customers but UR UMUC Healthy Fitness Center will seek to differentiate itself from its competition by introducing a new business model that revolves around attracting young, affluent customers. We will provide outstanding service, invest heavily in the newest technology to enhance the client experience, keep the center spotlessly clean and well maintained, and enhance the aging facility with up-to-date equipment and innovative and imaginative programs.
Porter’s Five Forces Analysis
Buyer Power: Buyer power is high because customers have many different fitness products and facilities to choose from and typically choose a gym based on individualized needs. Customers can have a positive impact on the business. Attracting and retaining them will be the most important part of the new business strategy.
Supplier Power: Supplier power is high since the fitness center will be changing its strategy to focus on elite clientele. Procuring only the best products available will be a key part of the new business strategy and will have a positive impact on the business.
Threat of Substitute Products or Services: The threat of substitute products is high from many fitness alternatives including Cable TV and Internet Exercise channels and sites, Wii and other gaming consoles, various

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