UR UMUC Healthy Fitness Center Case Study
In 1980, the UR UMUC Healthy Fitness Center was opened in a growing area of a bedroom community, by Tom Ellington, a UMUC Business Management graduate after he retired from the US Marine Corps. It has an exercise room with many different kinds of specialized equipment, rooms for various exercise and martial arts classes, and locker rooms with showers for men and women. In addition, there is a small snack area where members can buy bottled water, soda, fruit juices and snacks, with tables and chairs where people can relax. There are several part time staff members that man the counter where people check in; they also sell memberships and collect payments. There are trained exercise room attendants to assist members, and a maintenance staff to ensure cleanliness of the facility and minor maintenance of the equipment. Recently you were hired by the owner and founder as the manager, and you are very excited about this opportunity!
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UR UMUC Healthy is a for-profit Fitness Center and must cover its variable costs, fund future improvements and produce a reasonable profit for the owners. Unfortunately, business has been steadily declining over the last five years. Although your predecessor did a good job at the Center, it has become out-dated. You recognize that some of the equipment really needs to be replaced, but you are not sure which equipment should be replaced first. The classes and exercise programs available have also become out-dated. There is little known about the makeup of the membership (age, sex, goals, interests, problems, complaints, etc.). You don’t know if there are long waits for particular equipment. If you had more information in these areas you feel that you could increase membership and income. For instance, if you knew which equipment was most heavily used, perhaps you would opt to replace that first, or add more similar equipment. The membership fee structure has not been reviewed in many years, and your contracts with outside firms that perform preventative and major maintenance, and those that provide cleaning supplies, vending machines, and towels have not been reviewed in a number of years. Recently, there have been weeks when the Center has run out of clean towels and the vending machines were out of the most popular items. In addition, customers have been requesting WiFi reception in the Center as well as cardio monitoring features on the cardio equipment.
The Center is open from 5 AM to 10 PM and is busy most of the day; however, the make-up of the people differs over the course of the day and each group has its own characteristics. The early group, 5 – 8 AM are the heavy workout members who speed through their exercises and head out for work or school. The next group, 8 AM -2 PM are older and take their time exercising and attending classes and spend a lot of time in social interaction; they are generally either retired or moms with their kids in school. The period from 2 – 4 PM is the least busy and is made up largely of high school students and others who like a less crowded environment. From 4 – 7 PM the group is made up of workers on their way home who want to get their workout in before dinner. The last group, 7 – 10 PM, is young single people who want show themselves off and attract the opposite sex, while exercising or taking classes.
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One problem that you notice immediately is that you do not know which employees are scheduled to work each day, and there is no way to quickly get a substitute if one is needed. All employees require annual training and certifications in CPR, Safety, First Aid and the use of AED Defibrillators, while the contract trainers require various additional certifications periodically based on their specialty. All of the membership records, orders for towels and snack bar items, and financial and payroll accounts are kept on paper. The Center does not have a Web site, and uses very little marketing except word-of-mouth, and essentially still operates the same as it did in 1980.
Throughout this course you will manage the UR UMUC Healthy Fitness Center, taking advantage of business practices discussed in the class, the Course Modules and the textbook to increase revenue, keep the business running, and bring the Center into the 21st century. You will identify one area that is in need of improvement a
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Case Study, Stage 1: Business Environment Analysis
Before you begin this assignment, be sure you have read the “UR UMUC Healthy Fitness Center Case Study.”
Business Environment Analysis for UR UMUC Healthy Fitness Center
The UR UMUC Healthy Fitness Center has been in business since 1980 and has seen an increase in competition from small fitness centers, Cable TV and Internet Exercise channels and sites, WII and other TV Game Console, various exercise equipment infomercials and increasing supply of Exercise DVD’s . One of your fitness instructors told you that she saw a sign announcing the construction of Gold’s Gym (a well-known national fitness franchise) a few blocks away. Your staff is worried and is looking to you to provide reassurance that the competition will not affect the business. In addition, you have decided to develop your strategic direction for bringing the UR UMUC Healthy Fitness Center into the 21st century.
You know that Michael Porter’s Five Forces Model is a useful tool for analyzing a business, understanding the importance of the five competitive forces and helping to develop its Generic Strategy. It is also used to aid organizations facing the challenging decisions of dealing with changes made by existing competitors, entering a new industry or industry segment or developing a strategy for dealing with new competition. The Five Forces Model helps determine the relative importance of the forces affecting competitive position that could affect the future success of a business and includes:
Case Study, Stage 1: Business Environment Analysis
Before you begin this assignment, be sure you have read the “UR UMUC Healthy Fitness Center Case Study.”
Business Environment Analysis for UR UMUC Healthy Fitness Center
The UR UMUC Healthy Fitness Center has been in business since 1980 and has seen an increase in competition from small fitness centers, Cable TV and Internet Exercise channels and sites, WII and other TV Game Console, various exercise equipment infomercials and increasing supply of Exercise DVD’s . One of your fitness instructors told you that she saw a sign announcing the construction of Gold’s Gym (a well-known national fitness franchise) a few blocks away. Your staff is worried and is looking to you to provide reassurance that the competition will not affect the business. In addition, you have decided to develop your strategic direction for bringing the UR UMUC Healthy Fitness Center into the 21st century.
You know that Michael Porter’s Five Forces Model is a useful tool for analyzing a business, understanding the importance of the five competitive forces and helping to develop its Generic Strategy. It is also used to aid organizations facing the challenging decisions of dealing with changes made by existing competitors, entering a new industry or industry segment or developing a strategy for dealing with new competition. The Five Forces Model helps determine the relative importance of the forces affecting competitive position that could affect the future success of a business and includes:
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• Buyer Power
• Supplier power
• Threat of substitute products or services
• Threat of new entrants
• Rivalry among existing competitors
The Five Forces and the Generic Strategy are fully described and discussed in the textbook, and the Business Model and Competitive Advantage are covered in Module 1. In order to analyze the Fitness Center’s current competitive position and develop a Generic Strategic direction, you have decided to use the Five Forces Model to analyze your Fitness Center business.
Purpose of this Assignment
This assignment gives you the opportunity to apply the concepts of the Porter Five Forces model to a specific business, and develop a strategic direction for your business. This assignment specifically addresses the following course outcomes to enable you to:
• analyze business strategy to recognize how technology solutions enable strategic outcomes
• analyze internal and external business processes to identify information systems requirements.
Assignment
Using the textbook and external resources, write a short paper 2-3 pages in length, not including References page and cover sheet, responding to the bulleted items below. Remember to use the APA formatting rules and correctly cite and reference your sources with APA format. Use the Grading Rubric to be sure you have covered everything. Submit your paper via your Assignment Folder as a Microsoft Word document with your last name included in the filename.
Create a document that includes the following:
• Brief introduction providing the background of the case, why you are writing and what is to come in your paper. This should only be 3-5 sentences.
• Perform a Porter’s Five Forces analysis for your UR UMUC Healthy Fitness Center, addressing each force in one or two sentences and defining the force, its impact (Positive, Negative or Neutral) on the Fitness Center and whether it should affect your strategy (Yes/No). (See Textbook, pp. 15-18 and Course Module 1.) Do not identify solutions or things that you are doing that would affect the factor. (The idea is to identify how the different forces affect the UR UMUC Healthy Fitness Center and how much.) This provides you with a view of the business that will allow you to select a Generic Strategy and a Strategic Business Area on which to focus your efforts.
• Brief introduction providing the background of the case, why you are writing and what is to come in your paper. This should only be 3-5 sentences.
• Perform a Porter’s Five Forces analysis for your UR UMUC Healthy Fitness Center, addressing each force in one or two sentences and defining the force, its impact (Positive, Negative or Neutral) on the Fitness Center and whether it should affect your strategy (Yes/No). (See Textbook, pp. 15-18 and Course Module 1.) Do not identify solutions or things that you are doing that would affect the factor. (The idea is to identify how the different forces affect the UR UMUC Healthy Fitness Center and how much.) This provides you with a view of the business that will allow you to select a Generic Strategy and a Strategic Business Area on which to focus your efforts.
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• Determine which of Porter’s Three Generic Strategies (see textbook page 20) that you will use to improve your UR UMUC Healthy Fitness Center for the 21st century and explain why you selected it and tie it into the significant forces that you have identified.
• Using your analysis of the Fitness Center’s Business Model (based on what you learned in Module 1), identify an important Strategic Business Area that needs to be improved. The Strategic Business Areas relate to the direct variables (explained in Module 1 and illustrated in the Walmart Example Case Study). Explain why you have selected that Strategic Business Area and how improving it will improve operation of the Center, including how it relates to the Generic Strategy you selected.
• Within the selected Strategic Business Area, identify and select a single daily process that is within and supports the Strategic Business Area that needs improvement. Note: A process is defined in your textbook as “a standardized set of activities that accomplish a specific task, such as processing a customer’s order.” (Baltzan, 2012, p. 20) (In Stage 2 you will model the AS IS process and the TO BE Process, and propose a technology solution to improve the process you identify here, so select a process that is appropriate for a technology solution.)
• At the end of your report with your References enter the following headings and complete the information using one concise sentence for each. You will be starting each subsequent stage by including this information as a method to keep us focused on the objectives.
GENERIC STRATEGY:
STRATEGIC BUSINESS AREA:
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