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Business Environment Analysis

Autor:   •  January 27, 2014  •  Case Study  •  1,263 Words (6 Pages)  •  987 Views

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The UR UMUC Healthy Fitness Center is a center that has been operating since 1980 as a center for various exercise and martial arts classes. Since Tom Ellington first opened the fitness center, there has been a boom in the need of fitness as the demand is growing and so is the requirement for the fitness center to adjust needs of their customers. As per the case study, it has been noticed that the equipment’s need to be replaced, the classes and exercise programs are out dated, there is no Wi-Fi reception in the center and there can be a threat of competition due to Gold’s Gym coming up just a few blocks away. The purpose of this paper is to give an analysis for the UR UMUC Fitness center with the ability to identify the needs of the business and provide a technology solution with the utilization and implementation of understanding competitive advantages.

In order to find a better solution, Michael Porter’s five forces model will be a useful tool for analyzing the business of UR UMUC Healthy fitness center. The first force to analyze any business is the Buyer Power. If we look at the Five Forces Model from the owner of the fitness center, we see that Buyer Power for the fitness center is at stake due to the fact that the business has now been declining over the last five years. Since there is Gold Gym which will soon be open just few blocks away from UMUC Healthy fitness center, the company will have to keep the prices low because people would not prefer paying high membership fees for services currently received at the fitness center.

The second force to analyze is the Supplier’s power. Here, the supplier power of the supplier is neutral because if we compare UMUC Healthy fitness center with Gold’s Gym, I think Gold’s gym will have a better supplier power because the equipment’s are manufactured by themselves and can easily be replaced and fixed when needed. On the other hand, the supplier power for UMUC remains neutral because they do not have regular maintenance contract with the supplier who can check the equipment’s on a regular bases and fix it when needed. Thus, it will be very challenging for UMUC to compete with Gold Gym in terms of Supplier power.

The third force is of the threat of substitute product or services. This is considerably high because of the competition it will face with Gold’s Gym. Gold’s gym are known to provide great customer service with amenities such as free child care, tanning booths, free one week training for new customers, variety of classes for all ages with no extra cost. This force therefore creates a negative impact on UMUC Healthy Fitness Center because it does not possess all the above mentioned facilities that Gold’s Gym offer. To protect themselves from competition, UR UMUC Healthy Fitness Center will have to offer better services and products in order to gain more cliental and use updated technology to satisfy customer needs.

The fourth force

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