Set forth in this case study is an analysis of an out dated privately owned fitness center, whom after 30 plus year in business, is in jeopardy of being closed because of the emergence of new competitors. The analysis of the company will be done using Porter's Five Forces Model, in order to assess where the fitness center currently stands within the market place. Along with the analysis, a strategy for bringing the fitness center up to current information and technology standards will be introduced. Upon completion of the analysis, I will be able to determine what Strategic Business Area of the company needs to be improved upon; and narrow down which of its process' should be changed.
Quite simply put, the buying power associated with Porter's Five Forces Model (hereafter referred to as PFFM) is, "the ability of buyers to affect the price they must pay for an item" (Baltzan, 2012). According to the fitness centers information, they have staff members who sell and collect payments on memberships, but gives' no detail as to the number of current clients along with the percent of clients lost in recent years. This alone is not enough information to determine the buyer power. However, with the fitness center so outdated and limited in its variety of product, the availability of a new company with potentially newer technology resources, gives rise to the power of the buyer. This outcome will only serve to hurt the fitness center in the long run.
In the case of our fitness center, the supplier power will have a negative impact when viewed in PFFM. Based on the information given, the fitness center keeps all records for vendors and suppliers on paper. This system, although outdated, tells us our fitness center has a relationship with its suppliers but does not show its current level of involvement. Even though the fitness industry reaches an extremely broad market place, with multiple suppliers and products, it actually becomes a niche environment from the supplier's perspective.