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BSBMGT616 Develop And Implement Strategic Plan
Instructions to the Writer:
1. There are 3 different documents attached to this email, necessaries to answer this Assignment.
Doc 1. Aussie Fitness – Case Study
Doc 2. Milestone Project Phases
Doc 3. AF Centre Corporate Marketing Plan Performance Review
2. Please, do not modify the questions or sub-titles in the tables of this Assignment. Fill up the tables just with the information the trainer is asking for in each table. Otherwise, the trainer will mark them as “Unsatisfactory”.
- I just want to avoid any similar situation as happened with the last Assignment -
3. Some questions got 2 or 3 small questions on it.
Those questions are identified as (Answer a & b) or (Answer a, b & c). Do not forget to answer all of them, otherwise the trainer will mark them as “Incomplete Answer”.
- I just want to avoid any similar situation as happened with the last Assignment -
4. Please, I would like just the questions and answers identifies by Number or letters in another document.
I do not want the answers in this template.
Thank you in advance.
Kind Regards
BSBMGT616 Develop and implement strategic plan
Assessment description
You will prepare a formal SP (Strategic plan) for the owners Mary and James Franklin of the Aussie Fitness Centre Chain/Brand.
Assessment Procedure
From the Aussie Fitness case study – Attached to this email, you will create a SP (Strategic Plan) for the organization, prepare the plan following the formal report style layout:
Introduction to AF
The Aussie fitness center is one of the fastest-growing fitness corporations which was founded in 2001 in Perth and is owned by Mary and James Franklin. The Chief Executive officers of fitness centers are Mary and James Franklin. Its Head office consists of General Manager Human Resource, Finance, Marketing, and other training and support staff. Rented facilities of Aussie Fitness center has located near to each city largest shopping center and in future Aussie fitness center has to expand its business nationally and internationally. With the increase in demand Aussie fitness center mission is to increase its number of centers. In the United States and the United Kingdom (UK), Aussie is expanding its branches. Per center investment required by Aussie fitness center is $300,000. The Aussie company use to conduct seminars for its promotion in 30 kilometers of its radius of the business. One of the key success of Aussie fitness center is the ability to offer Cardio Equipment, Barbells and weights, fitness accessories, strength equipment, supplements, commercial gym, and boxing MMA. Lambert consultancy has expertise in market research data and due to its expertise, Aussie fitness center has to contract the services of Lambert consultancy. Aussie does not require adaptation and they have to keep their standardized product and services while expanding its branches internationally. Aussie offer high-quality training because its trainers are highly qualified and have special training in their field of industry experience and interest. Marry and James has to use fair leadership skills in organization and they are increasing the skills and knowledge of employees to increase the organization productivity and reducing the employee turnover. To achieve the vision and mission of the company the organization is providing modern fitness techniques to its customers; this required an open honest and open communication of high management with its employees. In the future success of the business, the organization required more attention towards changing physical techniques with time and adopt a new one to retain loyal members and increase its reputation for future business.
Executive Summary
The makeup of the industry that we will be working on has been continuously changing. A healthy growth aspect can be seen in the industry as a whole. The industry suffered a lack of revenue during the global financial crisis. Now the spending on fitness has been on an increase. A major change in the industry is the induction of such provisions as the 24-hour gyms. The main features of these new additions are that they are affordable and accessible at any point in time. The importance of health and fitness has increased over some time. The obesity level in Australia is on an increase. The need of the hour is that the gyms provide services that are affordable as well as better in quality. The industry will slow down as the number of competitors has increased over time. The customers have a large number of options when it comes to fitness centers. These factors will affect the business of the fitness center that we are considering.
The Aussie fitness center is one of the biggest fitness centers contains several branches near or at biggest malls of the shopping centers. The Aussie fitness center is very popular in all age group people because of its best services. The CEO of Aussie fitness center required to expand his business nationally and internationally and increase sales up to 5% at the end of this year. The market shares are expected to increase by 20% at the end of this year. It is required that Aussie fitness Should advertise the business to achieve its strategic plan. The employees should be trained and qualified enough that the new techniques and technology adaptation is easy for the business. The company is working 24 hours to provide the services. This is done to take up the maximum share in one of the fastest-growing markets in the country. The company started work in the year 2001. The company sees growth as one of its major objectives as the demand for the service increases. The business is expected to cater 30 people per day while having to recruit 5 people as staff members. There will be a certain percentage of these people who are repeat visitors. The company was targeting the people who were born from the years 1946 to 1964. The company is now trying to attract other age groups as well. This will help the company to expand its customer base as well as to cover up the running costs of the business when the season is off. The company is also making its presence felt on the internet by making a new more attractive website.
Purpose of the report
There are many purposes of this comprehensive business report on an Aussie business that is working in the fitness industry. If we talk about the company, we see that the company will take the direction from this report as it contains the mission, vision and similar strategic management aspects. The investors will be more closely looking at the sections showing the growth aspects of the business. The company will also know better about the environment that it is working in. For the internal environment, it will see the strengths and weaknesses while for the external environment it will see the opportunities and threats. The company can also take help from this report as this provides ample information on the various aspects of running the business. The report also describes the various aspects of growing the business which will help the company when such decisions have been taken by the company. The other important party that will keep a close eye on this report is the investor section. The investors will see what the company has to do and how it would approach the desired scenario. They will see whether the company has the resources to successfully undertake the proposed growth projects and then they will decide whether or not to invest in the company. The employee will also have a look at this report to know exactly what is expected of them during the business. The general public will also have a look at this report to know the facts about the company. Customers will be helped in assessing the marketing efforts of the company and the ways in which the company will approach them. Competitor’s analysis will help the company to analyze the overall stature of the industry.
Vision Statement
By applying the historic approach, Aussie fitness center distinguishes themselves from other competitors through providing its services to all age people in the community. Our vision is to be considerate one of the top entertainment centers focused on the health and well-being of its members under innovative and specialized training systems
. Mission Statement
AF mission is to provide an entertaining and educational experience that meets the requirements necessaries for a healthier lifestyle adjusted for each member of the family and/or the community.
Values
Inclusive - AF aim to include the whole community, young and elderly generation, in the same environment.
Quality Assurance – Assuring quality of products and service to AF internal and external stakeholders.
Commitment - by integrating the entire community.
Lifestyle – Promote and encourage a healthy quality way of life.
Education - Inform the community about the different ways we can support them in living a more mindful way of life.
Connect: Incorporate a fun and safe culture into everything we do without community.
Key Performance Indicators (KPI’s) Objectives and Goals
From the Human Resource/Business Plan bring across and or provide the SMART KPI’s/objectives for AF using the SMART format and goals that you have identified they want to achieve. * Note: KPI’s should always be SMART
Objectives:
Achieve a market share of 27% by June 2020
Open two branches one in the UK and one in the USA by the end of next year.
Within one-year time open another center to cater to the needs of Perth residents.
Provide services to sportsmen and women within three months.
Reduce all the expenses by 10 percent within the next year
Update all the processors to the latest technology within the next quarter.
Marketing Objectives
Conduct seminars to increase sales up to 5% at the end of this year.
Attract niche customers to gain competitive advantage
Increase market shares 10% at the end of this year by expanding business nationally or internationally.
CM’s and ACM’s are to work with the Sales and Marketing (S&M) Team to discuss tactics and trends to attract new members and keep existing members interested in their respective centers. Milestones (Answer a & b)
Project milestones are flagged as important events and positive accomplishments for AF (Aussie Fitness) and the workforce team.
AF would like to implement a Dash Board System in to the fitness centers for more accurate reporting with regard to monitoring Key Performance Indicators and Milestones.
a). Complete the framework below providing four (4) points in each section for AF in reaching a milestone of implementing the Dashboard System as a pilot test initially in to the Sydney Centre.
b). Discuss above your framework what the milestone will achieve consider:
Benefits of the introducing the Dashboard system
Live, reliable/timely data
Shows trends
Morale
Efficiency/Productivity
Team work
Achievement
Recognition
Read the following and use the information as a guide before completing the chart (Doc 2. Milestone Project Phases – Attached to this e-mail)
Figure 1 - Milestone Framework
Initiate
Plan
Execute
Close
E.g. Produce a proposal for the owners of the details of introducing a dashboard software system
Obtain quotes
Set Quality control Checks
History
1.Increase the market shares of the company up to 27%.
Increase sales
Market research to increase the number of branches.
Continue
2.To cover the deficiency of professional and qualified staff
To increase customer satisfaction
Two staff members with professional certificates and specific field qualification should be select recruit and induct in each fitness center
History
3.Reduce turnover and absenteeism of Employees
Set standards during recruiting process.
Follow the standards to retain employees.
History
4.Increase net earnings at least 10%.
Control the expenses
Minimize the variable cost of per customer.
Continue
b) To increase market share, it is required to increase the sale and it the goal of the organization to increase the market shares up to 27%. The company has to focus on market research and increase the number of branches in those areas which have more demand for the gym and they are neglected by the competitors. The company should plan to open 2 branches at the end of this year for increasing the customer base. It is required to do more advertisement for the gym through conducting seminars and increase the productivity and efficiency of gym staff. Teamwork is required for the advertisement of the business which accomplishes goals at a specific time. If any business wants to expend itself then it is necessary to consider the wants and needs of the customer and for customer satisfaction more professional and experienced staff with having a certificate in professional training. The company has to reduce absenteeism and turnover of the employees by setting policies at the time of recruitment that may help to reduce the absenteeism and turnover rate. The compensation of employees should be adjusted according to skills and experience. The employees should be bound to follow the rules of the company and show morale in the future. The AF company should control the expenses and increase net earnings of at least 10% at the end of this year. It is only possible with efficient teamwork to minimize the variable cost of per customer. The goals can only be achieved if they are executed inefficiently. The AF fitness should set a goal to achieve success in future time. The reputation of the company can only be achieved by giving better product and services at a lower cost which is affordable for all income person.
Training and Development (Answer a & b)
a). From identifying the above KPI’s/objectives complete the Communication Skills example and provide three (3) more training sessions would be relevant for the owners of AF to provide for their internal stakeholders, and the benefits for all the stakeholders involved.
b). Above your table discuss the importance of AF training their internal workforce, and the benefits it has for all parties.
Table 1 – Training and development Benefits
Initiate
Plan
Execute
Close
Communication Skills
All AF staff will be trained to communicate with internal and external stakeholders in a consistent manner, no matter which state or country the AF center is located.
Consistency in service from AF staff
Everyone trained the same so all employees are sending the same consistent message.
Feel confident in their communication skills
Participation certificate
AF benefits as membership retention remains consistent.
Productivity increases.
Absenteeism reduces.
1.Sales training
All staff should be trained in terms of needs of the customer and their other characteristics.
Train the staff to handle dissatisfied customers.
Conduct the seminars near to the branches of the AF.
Give incentives to employees on achieving specific targets.
Use modern promotional strategies and make advertisement through internet e.g. Instagram, Facebook and twitter and other social media
Sales increases.
Market shares increases.
2.Proffessional accounting training
Staff should be trained to make accurate accounting records giving ample information.
Make proper budgeting to improve the efficiency of the business.
Accounting staff get professional accounting training through good training centers.
Recruit more competent and qualified Accounting Staff
Install latest accounting software and train staff upon them.
New software’s are implemented in AF.
Budgeting is proper.
Sales increases.
3.Customer services training
All staff should be trained in terms of needs of the customer and their other characteristics
Increase customer satisfaction ratings from 87% to 89%
Qualified employees appointed with having specific specialization
Give employees customer training during duty hours by conducting training sessions.
Improved customer satisfaction
Increase of customers in AF.
b) It is important for AF company to give proper communication training to employs so that they can easily communicate all age group customers. To improve Sales and market shares the sales related training is very essential. For accurate accounting analysis it is important to take professional accounting training to handle the software. The customers satisfaction is the key of success it is required to give proper customer training to all employees and conduct training curses during the duty hours.
Financial (Answer a & b)
a). Using the AF corporate marketing plan performance review for year end, complete the tables with the variance between the forecasted/budgeted amount and actuals.
(Doc 3. AF Centre Corporate Marketing Plan Performance Review – Attached to this e-mail)
b). Identify the highest favorable and unfavorable variables and discuss why this might have occurred.
Table 2 – Sales Forecast Year 1
Forecasted Amount
Actual Amount
Variance
-/+
Favorable/Unfavorable
U/F
Sales
Corporate Employees
$298,783
$258,935
+ $39,848
F
Regular Clients
$242,077
$280,952
-$38,875
U
Total Sales
$540860
$540,860
$0
BE
Direct Cost of Sales
Corporate Employees
$29,878
$47,357
-$17,479
U
Regular Clients
$24,208
$28,349
-$4,141
U
Subtotal Direct Cost of Sales
$54,086
$75,706
+$21620
F
Table 3 – Marketing Expenses Year 1
Forecasted Amount
Actual Amount
Variance
-/+
Favorable/Unfavorable
U/F
Marketing Expense
Pamphlet Production
$1,400
$1400
$0
BE
Website Production/Maintenance
$9,200
$9,218
-$18.00
U
Other
$14,000
$38,600
-$24,600
U
Additional Salaries
$0
$24,600
-$24600
UF
Total Sales and Marketing Expenses
$24,600
$73,818
-$49,218
U
Table 4 – Website Development Year 1
Budget
Amount
Actual Amount
Variance
-/+
Favorable/Unfavorable
U/F
Web Development
Website Completion
$9,200
$8,100
+$1,100
F
Total Web Development Budget
$9,200
$9,200
$0
BE
Totals
$19,400
$17,300
+$2100
F
In the first section, corporate employee sales are favorable because the actual sales are more than expected sales and sales to regular clients is unfavorable because the actual amount of sales are greater than the forecasted amount. Total sales are at the breakeven point that total sales actual value is equal to forecasted total sales. In the second section of sales, actual sales to corporate employees are more expensive as compared to it was forecast so it is unfavorable. The regular clients in the second section of Sales show unfavorable results because the actual cost spent on sale is more than the budgeted cost. In marketing expenses for the production of the pamphlet, the actual expenses are equal to forecasted and it is at breakeven point. Web production maintenance expenses are unfavorable with a negative variance of $18. Other expenses are unfavorable because actual expenses reached to 38,600 and they were forecasted only $14000. Total sales and marketing expenses are unfavorable because the variance is negative 49,218. Which means that sales and marketing expenses are more than double as compared to it was expected. There is a need to make proper marketing strategies which saves cost for future projects. The total website development budget is favorable and the company is expending less than it was expected in the past.
SWOT Analysis (Answer a & b)
a). Conduct a SWOT analysis of the business with a minimum of four (4) in each quadrant.
b). above your SWOT discuss the main areas that you have identified for the owners of AF to be able to take action and make informed decisions.
Table 5 - AF SWOT Analysis
Internal
Strengths
Weaknesses
Loyalty of customers
Convenient location
Among 370 clubs it's the biggest fitness center
Technology
Technological advances
material development
usage change and customer preference
Strong supply chain management
Competitive prices
24/7 Service
Consumer equipment brand awareness
Advance technology – that has room to be
Upgrade
Classes of fitness doesn't match with every person time table
High cost as compared to competitors
short on space
Inability to use technology
Language barriers
Limited financial resources
External
Opportunities
Threats
To meet the needs of customers innovation can produce new product and services.
Increase sport popularity
Daily routine / Habits
Increase interest in fitness shown by social media
Government incentives to reduce unhealthy lifestyle
Championships in bodybuilding in the country give them a high recognition
A campaign by educational institutions against obesity.
It is easy for smaller competitors to focus customers more easily
The economic downturn
High energy cost impact our profits
Political Instability
Changes in taxation Laws
Constant advancements in Technology
A campaign by some people against the use of Protein drinks
b) The technological aspects that are involved are the availability of the latest equipment, the speed at which the current technology can out date. This is a very critical aspect as the technology changes at a very rapid pace. The businesses that are not paying need to each and every aspect of the technological environment will not be able to survive for long (Phadermrod, Crowder & Wills, 2019). The owner of AF has to adopt the new technology because the rapid change in technology may make them outdated and this may create a space for competitors to grab the customers. The customers’ needs and preferences have changed very rapidly and the need for any business to adopt new techniques and provide new services according to the need of the customer. The change in the legislation of technology is also expected. The company will have to keep an eye on any happenings in the external environment that can affect the company in the normal course of the business. The owner has to focus on the downturn in the economy and make remedies according to it. It is necessary to reduce the cost of the gym accessible to all classes of the community to take competitive advantage. The companies have to follow the regulations for their protein diet and all food supplement products. The government gives incentives for reducing the healthy diet and AF have to be very careful about using those food supplements which are unhealthy and that may cause serious health issues. The taxation policies change with the passage of time rapidly. The company should be aware of the change in the policies of taxation and the owner should go through the policies of taxation. The availability of credit is a big issue for the companies who purchase their products on lease. The company has to make proper policies for credit purchases. The new business should have enough space that every department is managed easily. The location selection is a very important factor for the success of any organization. It is necessary that the company should reduce its expense and cost that is easily approachable for the whole community.
PESTLE Analysis (Answer a & b)
a). Conduct a PESTLE analysis for AF in a table format with four (4) in each quadrant.
b). Above your table discuss the important factors that you see AF need to be particularly aware of.
Table 6 – PESTLE Analysis
Political
Economical
Political instability
Changes in labor law
Tax implementation
Amendment in legislation
Instability in economy
Inflation
interest rate
Credit availability
instability income of customer
Social
Technological
Referencing of family and friends
Influence of social media
Life style
Fitness trends
Competitor technology
Innovations
Change in equipment
Technology legislation
Legal
Environmental
Health & safety laws
consumer protection
Ethics of Marketing
Labor law
Severity in temperature
Natural disaster
Change in climate
Weather
The political instability is unpredictable and it is very critical for the business of the company if there is an instability in political environment. The labor laws may change with the change in government. The new government may implement high taxes on the business of AF company. The rates of taxes will also directly affect the organization as it has to charge the customers a higher amount if the taxes are higher. With higher taxes, it will become a little expensive and difficult for the company to provide the same quality of services to its customers. The state of the economy also affects the organization as this aspect directly affects the purchasing power and disposable incomes of the general public. The company will benefit by consulting the government as it will know about the various obligations that it has towards the government. On the other hand, the company will also know the ways in which it can acquire certain benefits from the government. The discussion will also include the steps that the government can take to improve the current situation of the industry. This will help the company to draw a complete picture of the scenario that it will face regarding the government. The stakeholders include the external parties that are directly or indirectly affected by the actions of the firm. The stakeholders can be external as well as internal. The most important external issue these days is the environment that is affected negatively by any business activity. By studying the stakeholders in a greater detail, the business will be able to know what improvements can be made to the existing model of the business. The environmental issues can create some problems for the business and they can also provide some very attractive opportunities for the companies. In a recession, the organization should expect to have a lower amount of revenues while in the boom, the revenues of the company will prosper. This will affect the commitment aspect of the business objectives. The business will not be able to serve the customers with the same level of commitment as before. If we see the change in legislations, the government may change the laws regarding usage of certain food supplements. This may affect the business of the organization. This will hurt the organization in a sense that the business will not be able to include all the societal groups in the business that it is doing (Johansson, & Andreasson, 2016). The people who want to use certain supplements will be excluded from the scenario. The socio aspects that will affect the business will be the availability of the proper training staff. This will in turn depend on the availability of the trainers. The remuneration paid to them will also play a crucial role in this decision (Richardson, Smith, & Papathomas, 2017). A very important aspect that relates to this particular business is the effect that family and friends have on a person to join in.
Competitor Analysis (Answer a & b)
a). Create a competitor analysis of four (4) fitness center’s that offer similar productsand services to AF.
b). Above your table discuss AF Unique Selling Point in (USP) comparison to the competitors you have identified.
Table 7 – Competitor Analysis
Business Name/Location
Strengths
Products
Services
E.g. Aussie Fitness
Owners strong industry experience Locations
Fully equipped fitness center with a range of weight resistance equipment
Group Fitness Timetable
Personal Trainers
Various classes available for all member age groups
2.Good Life
Various amenities
Membership has many perks
Nationwide numerous clubs
Fitness exercise ball
Fitness resistance tube
Fitness deluxe kit
Provide latest machine and equipment
Training for use of food supplements
3 . Jets
Providing good services at low price
High customer satisfaction
Efficient franchiser system
Treadmill
Smith machine
Leg press
Jet physical fitness training
Nutritional counseling
Cardiovascular training
Negative resistance training
4 . Anytime fitness
Skilled workforce
Franchise owner takes constant training
Detailed and in-depth operation and marketing training.
No close day
Form rolling
Boxing kit
Machine fly
virtual coaching,
wellness consults
Private restrooms
4. F45
New programs of workout
Multi-Screen TVs display daily exercises
45-minute-highconcentration training with heart monitoring
Apps for booking and management-
Ab mat
Power pushups
Resistant loop bands
Kettle bell
Exercise group Classes
Personal training
b) AF is providing best services among all competitors and has a high position in the market. The 24/7 services of AF fitness company gives them a competitive advantage. The AF is popular in using the latest techniques and technology according to the wants and needs of the customers. The AF branches are present near or at the biggest malls in Australia. The services provided by AF company to all age group people. The access to the AF centers is very easy for all class of the community. The products use for fitness is healthy and safe to use. These things give AF company a great competitive advantage among the whole fitness industry.
Drafting Priority Issues (Answer a, b & c)
a). From conducting the above SWOT and PESTLE environmental analysis, identify four (4) issues that will affect the fitness centers business and place them in the below table.
b). Place the issues in order of priority for AF to be able to deal with them.
c). Provide a reason for each issue of the advantage of addressing problem area and the disadvantage of not addressing the matter.
Table 8 – Priority Issues
Priority Order
Subject
Issue
Advantages
Disadvantages
E.g. Competition
Local competitor has opened up close by
This will lift the standard of the AF Fitness center e.g. Customer Service
Possibility of losing members.
Competitor might force down membership costs which AF cannot compete with
1.
Growth
Increase off-peak
memberships.
Increase the market shares by 10% at the end of this year.
Off peak business pay higher rates and it could be expensive for the AF company.
2.
Technology Modification
Introduce more advance technology
To take competitive advantage of being more efficient in technology adaptation.
Costly
Difficult to implement
3.
Increase in sales
Increase brand awareness such as: promotions, advertisements in social media
Increase sales up to 5% at the end of this year to increase in retained earning up to 10%
High cost on Promotion
4.
Health and Safety rules
unhealthy food supplements
Safety of health and no fear of any illegal activities and default.
Competitor may use products which gives better results of fitness.
b. The company is showing low growth due to its off-season. The AF company management has to make a proper strategy for increasing off-season membership. The cost may be higher at offseason but the strategy should be relevant enough to keep all the cost and expenses in balance. The AF company have to focus on technological innovations and modification which can give a big competitive advantage to the AF company. To increase in sales, it is necessary to make good promotion to areas which are across 30 km of the branch of AF fitness. Sales promotion can also be done through the internet by using different applications and social media websites. To avoid the bad reputation of the company by giving unhealthy food supplement company should take care of the health and safety standards of the food supplements. The company should appoint and train those people who have health and safety standards awareness and they have good information about all food supplements to select those food supplements which can give better results in fitness and health.
C. The strategic goal of the company is to increase growth This includes the increase in market share with the help of promotion and increasing brand awareness. This is also evident from the fact that the company wants to increase the number of members that it is catering. In fact, almost all the objectives are pointing to the same strategic direction for the company and that is the growth aspect. The increase in off-peak membership will help to increase market shares in off-peak of the gym and it is also helpful to increase sales target at the end of this year. The increase in technology intense competition among the business class. THE business which adopts the new technology will be more successful as compared to business which is using outdated technology. Outdated technology maybe results in losing customers and their loyalty. Increase brand awareness such as: promotions, advertisements in social media by 2020. This issue is specific as it describes what to do. The cost related to this objective will be known to the company so it is measurable, the attainability aspect depends upon the execution. The company should follow health and safety standards because the government has stick rules regarding health and safety. This will be helpful for the company to gain the loyalty of the customers and it will be also helpful to get rid of the fear of default.
Gap Analysis (Answer a & b)
From the above identified issues there will be gaps with regard to what AF will be required to do to address the issues. Therefore, a gap analysis is required to be conducted of what AF strategies AF are required to implement in order to fill those gaps. These could include Human, Physical and Financial Resources.
a). Complete the table below bringing down the issues from above, identify the gap that AF is missing, provided a strategy and assign responsibilities to the task of filling the gaps.
b). Above your table discuss the importance of conducting the gap analysis to identify for AF what strategies they need to implement to be overall a high competitor within the overall market of the fitness industry.
Table 9 – Gap Analysis
Issue
AF Gap
Strategy
Responsibility for Gap
E.g. New Local Competitor
Competitor offering no lock in contracts
Compete by offering any new member signing up for the month of July free no lock in contract
Offer any new member who signs up for 12 months one month’s free membership for them and a friend.
Owners
Centre Managers
Sales Manager
1. Less space
Competitors offering more space
New projects should have sufficient space which are launching at the end of this year
acquire space from other businesses.
operation manager
Manager admin
2. Costly
Costly as compared to competitors
to reduce per client cost.
membership discounts offering.
Finance manager
Sales manager
3. Niche customers
Small competitors easily access niche customers.
conduct seminars to attract niche customers
advertisement through social media, messages and email etc
Marketing manager
Finance manager
4. Off- peak
The machines and trainers remain idle during off peak period.
discount on membership during off- peak period
launching off- peak projects.
Operation manager
Sales manager
b) The AF company should make and execute the strategies to provide good space to customers and giving them a good environment that they feel relax to visit the gym. Space should be managed according to the need and number of customers. The AF corporation should try to increase the space by acquiring floors or buildings beside the gym. The responsibility of providing enough space for all activities of the gym is on the Admin & operation manager. The AF gym is costly as compared to competitors the sales and finance manager should make strategies to reduce per client cost and give membership discounts annually, semiannually and quarterly. The Niche customers are the focus of the competitors and AF management should try to target the niche customers by advertisement through conducting seminars and the use of other resources to attract them. The responsibility of the Marketing Manager to advertise the Services at less cost. AF company have fewer sales during the off-peak season and the machinery and instructor remain idle during this time. It is required to launch different counseling classes and techniques to increase sales at the end of this year. To attract customers during the off-peak period the AF should give membership discount during that period.
Assessing Cooperative Ventures (Joint Venture) - (Answer a & b)
Mary and James Franklin are planning to introduce some supplementary services (particularly, remedial/sports massage, physiotherapy and chiropractic) on the second floor of the AF in the Sydney Centre. This will be the ‘pilot test’ for other centre’s.
a). They are considering a Joint Venture for this project, provide a discussion above your table about the advantages and disadvantages of Mary and James going in to a Joint Venture, include some of the information with regard to ‘Due Diligence’.
b). Additionally, identify the risks associated with a joint venture for AF.
Table 10 – Cooperative Venture Benefits and Risks
Joint Venture
Benefits
E.g. Access to established expertise and additional staff without huge expense
1. Both parties share the cost of initial capital and alleviating financial burden on each business.
2. Access to specialized knowledge at a low cost.
3. The credibility of the business may be enhanced because of the strong customer base.
4. Both companies will target the Large market easily and gain a competitive advantage in it.
Risks/Disadvantages
E.g. Clash of corporate culture and management styles
1.The Joint venture partner could get access to resources and technology.
2. Because of the compatibility problem and liability of partner mistake may cause a chance of failure of JV.
3. It is difficult to structure the agreement and it may create issues in the future.
4. It is sometimes difficult to withdrawal from some joint ventures.
a).Marry and James has recently plan to introduce the Joint venture with FILEX fitness center to introduce some supplementary products which may include remedial/sports massage, chiropractic, and physiotherapy on the second floor of the AF in the Sydney branch. The FILEX company had proved itself best in these supplementary services and Owner of the company is planning to make a Joint Venture with them. It will be easy for both organizations to alleviate the financial burden together of the new joint venture. The cost and expenses incurred in the expansion of the project will be divided among both organizations. The AF company could get specialized knowledge and experienced staff in those supplementary services at low cost. The customer credibility may be enhanced by providing those supplementary services and this will result in making a strong base of loyal customers. This may increase in growth of the business and sales may increase up to 5% at the end of this year. The market shares can also be increased by the successful implementation of this Joint venture. By the increase in market shares, the company may get a competitive advantage in the large market easily. The JV company may be easily accessing the resources and technology of the AF company. The contract will bind both parties for a specific time and sometimes the company bears huge loss due to a long contract agreement. It is difficult for an organization to quit from the JV.
B) The risk associated with this joint venture may be involved the exposure of technology and resources of the company with the new firm which could be dangerous in the future by having the same firm in a competitive environment. Joint venture firms may also have some issue of compatibility. The failure in plan execution from one company may create a loss for another company. It is difficult to make such a joint venture agreement which can address all conflicting issues. The company has to be very vigilant while making JV agreement because sometimes it is difficult to quit from the joint venture.
Cost Benefit Analysis (Answer a, b & c)
A cost and benefit analysis/pilot test will help the Franklins on deciding whether to go ahead with the project of renovating space for potential joint venture opportunity of introducing supplementary services such as remedial/sports massage, physiotherapy and chiropractic.
a). Conduct a CBA, fill/edit the blank spaces, you can add more fields, or create your own information in the CBA. List the benefits of the costs, so that the payback period can be identified.
b). Above your table discuss the importance/benefits of conducting a CBA and a pilot test before launching products/services across an organization.
c). Below your table calculate the payback period and your recommendations for the Franklins as to whether they should go ahead with the suggested project or not.
b) Cost and benefit analysis gives the company information about the benefits taken from incurred cost. If the value shows more benefits then the launching of product and services will be beneficial for the organization and if the cost is more than the launching of product and services should be avoided. This analysis gives clarity about the unpredictable situation. There is a risk associated with the development of the product and providing new services. The cost and benefit analysis gives a proper understanding of the future product and services launch. It is helpful for setting goals and also helps the company to estimate the net benefit of the business. It is a very useful tool for decision making.
Table 11 – Cost Benefit Analysis
Costs
Category
Detail
Cost per year
COST
Construction
(1/2 Second floor)
Walls, painting, ceiling
$15,000
Furniture
Stools, Benches, Yoga seating
$15,000
Sound and light system
Premium sound towers, Virtual A/V system, speakers
$5,000
Personnel (4)
Salary including benefits
$120,000
Recruitment costs
$1,000
Incentives
$2500
Software license’s
JAVA, EViews
$2500
Advertising
Seminars and social media advertisement
$12500
TOTAL
$173500
Benefits
Category
Detail
Cost per year
BENEFITS
Extra Rooms for Services
Remedial Massage
$25,000
Use Updated software
Faster system increases in productivity/enroll new member in 15 minutes instead of 25.
$15,000
Modern technology
Improved customer service and retention as a result of advanced technology
$30,000
Joint venture with FILEX
Remedial/sports massage, chiropractic, and physiotherapy
$90,000
Market penetration
Better control over market research
$20000
AF Application development
Improve customer services
$7000
Accounting software
Time saving for clients
$5500
Virtual A/v system
For counseling sessions
$6300
TOTAL
$198800
C) Pay Back Calculation:
Costs $173500 (divided by) Benefits $198,800 = 0.87 of a year (approx.)
The calculations show that the benefits are more and costs are lower. The payback period comes out to be 11.5 months. The organization should take on the project as the benefits of the first year are more and costs are lesser.
Consultation (Answer a & b)
When considering a project as per the above scenario, consultation with relevant internal and external stakeholders will need to be conducted.
a). Complete the table identifying stakeholders, what information is required (sought) to be given by the stakeholder, when will this information be required and how will the information be provided.
b). Above your table discuss the importance of identifying when information is required within a task (project management). E.g. renovation of a building, certain stakeholders would be required to be consulted with before construction could take place.
Table 12. Stakeholder Consultation
Stakeholder
Information sought
When within the task/Project
Method
Architect/Builder
Plans drawn, Quotations, Timeframes (how long)
Beginning stages
Formal Meetings
Investors
Amount required and uses of finance
All stages
Formal Meetings
Customers
Benefits of the project
Beginning Stages
Interviews
Employees
Benefits of the project
All Stages
Formal Meetings
Front line staff
members of gym
All stages
Informal interviews
Chief executives
Planning about the project
All stages
Formal meetings
Mid line managers
Execution of the project
All stages
Formal meetings
Finance manager
Funds
Beginning stage
Formal meeting
b)The first and most important stakeholders are the investors and shareholders of the gym. It is essential to take information from them about the use of finance in the project. The investors should be consulted by conducting formal meetings in all stages of the project. The customers can give information about the services required for the gym in the beginning stage. The important consultants are also employees of the AF gym, they have direct dealings with the customers and they have information about the wants and needs of the customers. They are consulted in all stages of the business. The front line managers are required to conduct informal interviews with members of the gym to know about the requirements of the project. Chief executive should be consulted about the planning and development of the project in all stages of the project. Midline manager gives information during the execution of the project. The finance manager should be consulted at the start of the project about the availability of the funds required for the new project. Formal meetings should be conducted at the beginning stage of the project.
Gaining support for the plan
Discuss in a paragraph why a Draft of the Strategic Plan should be circulated to specific/relevant stakeholders:
Include in your discussion:
a) What important information will this provide for all parties involved?
b) What will you do with this information once you have received it back?
a) The information will be useful in planning and execution of the project. The investors are the Important stakeholders and it is important know about their will to plan a new project. The chief executive offices are important to consult because the planning of the project is totally depend upon them. The Finance manager gives the information about the finances needed for the project and the availability of the funds required to execute the project. The mid line managers gives important information about the project at all stages of the project. The front line employees get information from the clients about the wants and needs of the customer. The customers are the main focus in this competitive environment.
b) The information will be helpful to know about the expected success of the project. This information will also be useful to make strategic plan of the project and set goals to meet the expectations of the investors and customers.
Communicate the Strategic Plan (Answer a & b)
A communication plan outlines who you need to communicate with, about what, how you’re going to do it, and how often.
a). Complete the table below of how AF (Aussie Fitness) will effectively communicate the strategic plan with their workforce.
b). Discuss above your table the importance of clearly communicating the strategic plan to the relevant stakeholders, with a focus on how the plan will benefit them so that they will have more buy in to reaching the organizational objectives.
Table 13. Communication Plan
Key message
Sender
Audience
Method
When
e.g. Brief of organizational change
Owners
All departmental heads and center managers
Face to Face formal meeting with follow up Email
Beginning stage
Brief of organizational change
Departmental heads and center managers
All other staff in their respective department / center
Face to face formal metings
Beginning Stage
1.Increase in Sales
Marketing manager
Field staff in the advertising department
Presentations on the past figures of sales.
All stages through continuous feedback
2. Increase market share 10%
Sales manager
Marketing department
Forrmal meetings
Beginning stage
3.Increase branches
Owner
All departments
Formal meeting
All stages
4.Joint venture
Owner
All departments
Formal meetings
All stages
b) To increase in sales at the end of this year by 5 % it is necessary for the marketing manager to communicate the plan with all staff of respective department or centers and conduct face to face formal meetings at the beginning stage of the plan. To increase market shares it is required for sales manager to conduct massage to the marketing department that it could make some marketing strategies to advertise the AF gym in all classes and all age groups of the customers. The owner should communicate all department about the expansion of business nationally o internationally at the need of this year. The formal meetings should be conducted at all stages of the project. To increase the flexibility in business it is required to make a joint venture with firms having specialization in a specific area of the field. The owner should communicate the message to all departments and formal meetings should be held at all stages of the project.
Distribution of the Strategic Plan (Answer a, b & c)
Certain groups of stakeholders will receive particular parts of the plan.
a). Provide a list of which part of the plan is distributed to who and where parts of the plan will be displayed/show/uploaded?
b). Discuss above your table the importance of only providing only relevant information to particular stakeholders.
c). Additionally, discuss that the plan needs to be written a style that suits the audience using the organisationaltemplatesorstyle guideto create the report.
Table 14 – Distribution
Stakeholder
Relevant Part of Plan / Where (Displayed/Stored/Shown)
E.g. Front-Line Staff
Key Goals placed in a newsletter on the Intranet
1. Physiotherapist
To get up to date about techniques of physiotherapy.
2. Finance staff
To implement new software’s to make budgets and conduct analysis of the business.
3. Chief executive
Supervise to improve products and services of AF gym.
4. Owners
Make strategy for development of business internationally.
b) The physiotherapist should be up to date from the latest techniques of the physiotherapy because it is important for customer satisfaction. The customer has information about the trend and they may demand the latest techniques of physiotherapy. The Finance staff should maintain proper records in the latest software to conduct the accounting analysis and it will be helpful in future decision making. The chief executive office should try to focus on the quality of services that are providing in the gym. He should focus on new techniques which should be implemented in the gym. The owner should try to expand the branches of the business nationally or internationally to gain maximum market shares and recognition all over the world. The owners should try to maintain the quality of services in all branches through proper supervision.
Monitoring and evaluating the SP
Comparing performance of whether AF are on track to reach the organisational objectives is important.
Discuss the following:
1. Who is responsible for monitoring the SP?
2. What tools/method AF will use to monitor progress and how if the KPI’s are not working will be adjusted?
3. What software system this data can be obtained from?
1. The top management is responsible to monitor the strategic plan with the help of feedback of all the lower level managers and staff.
2. Benchmarking can be one of the tools that can be used to analyze the performance of this strategic plan. These benchmarks may be set up against the performance of competitors or the company’s own performance. Benchmarking should be done against the key performance indicators as standards.
3. The data can be taken from the company and competitor’s annual reports and financial statements.
Final Recommendations – Conclusion
The company has to maintain a good level of services that is provided to the customers. This aspect is related to the commitment that has been considered one of the values of the company. This will require a regular assessment of the environment and to adapt to these changes by bringing in the desired changes in the goals, objectives and other relevant documents. These changes have to be put in place and the review systems should also be there. The review system should be allowed to take effect and improve the things whenever there is some gap in the documented aspects and the delivery aspect.
Discuss the recommendations that you are providing to AF under each of the following headings:
Human resources/Invest in Workforce: Recruit more professionals and well-educated employees having specialization in specific area.
Communication plan: Span of control should be democratic which is helpful in giving better services.
Continuous improvement/KPI: It is necessary to adopt new technology and new machines for AF fitness center.
Physical, and financial resources: AF company finance manager has to make strategy while spending money on lease purchasing of new machines.
Technology/Dashboards: To gain a competitive advantage it is necessary to adapt new technology.
Financials: Budgets/Forecasting: – Financial specialist should be consulted to make financial budgets.
Conclude the headings by confirming the importance of AF ensuring continuous improvement of the SP and that the SP should not remain a static document.
The AF company should plan to recruit more educated and experienced professionals who have specialization in specific area. The span of control should be democratic for easy communication of all level of hierarchy. The new technology adaptation is essential to provide up to date product and services to the customers of all age groups. The company high staff should make a proper strategy with the help of finance manager to check the retain earnings and resources of the projects to make investment according to budgeted cost.
25. Electronic References
Johansson, T., & Andreasson, J. (2016). The Gym and the beach: Globalization, situated bodies, and australian fitness. Journal of Contemporary Ethnography, 45(2), 143-167.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, 194-203.
Richardson, E. V., Smith, B., & Papathomas, A. (2017). Crossing boundaries: The perceived impact of disabled fitness instructors in the gym. Psychology of Sport and Exercise, 29, 84-92.
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