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Town Sports Discussion BSM Program Response
1st Post: Based on your studies throughout the BSM program, what are the issues facing Town Sports that may impact their ability to grow
2nd Posts: Responding to 2 other students’ posts, discuss what you would advise Town Sports should do and why
REPLY TO
peer 1
I think that Town Sports needs to evaluate all methods of growth such as horizontal or vertical expansion in order to determine a strategy that will work for them. Town Sports current method revolves primarily around horizontal expansion, they continue to add locations to their roster, however, most of these locations are clustered. Clustering does offer some benefits, but it can also offer some shortcomings.
Gym locations that are within a members’ network of activities allow the member multiple locations to serve their needs depending on what their plans are for the day. But locations that are too close together may be affected by the same external events such as power outages or natural disasters as mentioned in the case study. Town Sports needs to also be cognizant that there is such a thing as being too clustered. Too many locations within a small geographic footprint can cost more than they are worth as each comes with its own set of expenses and may no longer be offering benefit to the members.
Looking at Town Sports locations, some of them are within a couple blocks of each other. I think that they need to evaluate whether this offers any additional benefit to the members, and if not work towards the liquidation of these facilities, or make them more specialized studios to cater to a certain clientele’s needs, such as a dedicated Pilates studio or cycling studio.
In order to remain competitive, Town Sports needs to continually evaluate and refine their business model. Gym goers’ preferences are changing, demographics are changing, and there is many market opportunities that Town Sports is not necessarily capitalizing on such as the growing interest in gyms from children and teens, growing availability of aging baby boomers, etc.
There is not much in terms of vertical expansion that Town Sports can do. They do already offer additional products and services other than the traditional gym membership such as pro shop sales, massages, laundry service, and locker rentals, but those mostly fall into the horizontal growth strategy. These additional offerings account for roughly twenty percent of Town Sports revenues.
Reference:
Wheelen, T., Hunger, D., Hoffman, A., & Bamford, C., (2017). Strategic Management and Business Policy: Globalization, Innovation and Sustainability (15th Ed.). Pearson.
peer 2
After reading case 16 Town Sports International Holdings, Inc: Unsquashable. Town Sports International was founded in 1990 to promote the love of squash, considered an older sport than the modern fitness industry. As the company expanded its scope of operations, Henry Saint changed its name to Town Sports International. Unfortunately, due to the increasing number of competitors and the declining popularity of squash during the 1970s, Saint and his partners had to adapt their business model. They added exercise machines and changed their membership fee structure to accommodate the new revenue stream. During the 1980s, squash was no longer considered a profitable sport. Giardina and Tascher realized they had to change the company’s approach to becoming a fitness brand. They decided to change the company’s name to Town Sports International, which allowed the company to continue to grow while also moving away from its core offerings of squash courts and equipment.
Town Sports faced two main issues that impacted its ability to grow. First a change in consumer behavior. The fitness industry continues to grow, and people started gaining more awareness of health and fitness. The fitness clubs could adapt their offerings to meet the varying needs of their customers. This allowed them to make fitness more accessible to a broader range of people. Many studios and groups offer various types of training, such as yoga and Pilates. Running groups or city-based intramural teams also attracted members with low membership fees. Online exercise programs and DVDs were available for a low, one-time payment. Personal trainers who worked out of their homes or local gyms could also help people reach their goals. Second, increase competition. The rise of smaller studios led to a shift in the way people exercise. Instead of relying on the traditional full-service facilities, many people started using smaller studios that specialized in different types of exercise, such as yoga, boxing, and Pilates, which had significantly lower start-up costs when entering the market. The number of clubs offering lower prices and service levels has continued to grow in the market. As a result, the company faced increasing competition from larger and smaller fitness centers.
Resource:
Wheelen, Thomas L; Hunger, J. David; Hoffman, Alan N.; Bamford, Charles E.. Strategic Management and Business Policy. Pearson Education
Score | Evaluation Criteria | |
Total score 100% | Meets all the criteria necessary for an A+ grade. Well formatted and instructions sufficiently followed. Well punctuated and grammar checked. | |
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Above 75% | Meets most of the sections but has not checked for plagiarism. Partially meets the professor’s instructions, follows professor’s classwork materials, easy to read, well punctuated, correctness | |
Above 60% | Has not checked for plagiarism and has not proofread the project well. Out of context, can be cited for plagiarism and grammar mistakes and not correctly punctuated, fails to adhere to the professor’s classwork materials, easy to read, well punctuated, correctness | |
Above 45% | Instructions are not well articulated. Has plenty of grammar mistakes and does not meet the quality standards needed. Needs to be revised. Not well punctuated | |
Less than 40% | Poor quality work that requires work that requires to be revised entirely. Does not meet appropriate quality standards and cannot be submitted as it is to the professor for marking. Definition of a failed grade | |
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Town Sports Discussion BSM Program Response