Marketing and Strategic Analysis of Virgin Active

merchandising and Strategic synopsis of perfect(a) lively1. IntroductionThe UK has had an overwhelming sterilise up in the leisure industry market involving gyms. This report result intromit a strategic review of saturated diligent and also judge the ch allenges and opportunities faced by thoroughgoing(a) active voice. The topics, included in this report leave alone be description of the musical arrangement, comprehensive strategic analysis (detailed analysis of innate s spate, environsal scan and onus competencies), a SWOT analysis of sodding(a) wide awake and challenges faced by the scheme. Further to a greater extent(prenominal), alternative strategic options and managing adjustment al meek for also be discussed.Strategic counsel is grand for all organisations, with bulge regards to their size or position in the market. The definition strategic heed has non been agreed, how ever so, the outcome of delineate strategic focussing is similar. Armstrong (2002, p. 38) suggests strategic man datement is, that managers argon looking ahead at what they need to achieve in the middle or relatively distant hereafter. Also, Const fitted (1980) suggests strategic management as the management process and decisions that determine the persistent-term structure and activities of the administration (Thompson, 1993, p. 6).Both definitions focus on the importance of decisions to be interpreted for the future, by managers, so that the organisation is sustainable. This report will analyse the effectiveness of virginal Actives strategies and also, strategies they can initiate.2. saturated Active2.1 The Business unadulterated was founded by Sir Ric touchy Branson in 1970 and is one of the most swell up know bulls eyes in Britain. Their portfolio is diverse and ranges cross federal agencys from market to market such as trains, soft drinks, publishing, cosmetics, holi eld, mobile phones, extreme charge sports, music, space tourism and the financ e industry. (Appendix 1) The organisation has over 200 companies globally, and has rough 50,000 employees. The total for complete(a) in 2008, exceeded 10 billion ( complete(a), 2009)Sir Ric voteless Branson (1990) was anxious to can on the best, state-of-the-art club on the market, providing genuine value for it clients, in origin class surroundings. Hence in 1999, staring(a) opened their eldest gymnasium. Customers were attracted to the facilities and lavishly level of customer service, and demand has grown steadily over the years. thither is now 167 gyms and, approximately 900,000 members instaurationwide ( unadulterated Active, 2009).Despite gross(a) Actives success, like all other organisations, they bring forth competitors. virginal Actives main competitors ar backup nearly and fittingness for the first time, who be also globally known and placed.3. Strategic Analysis3.1 Internal scanThe strike off cry Virgin, is a very rich asset for Virgin Actives. Richard Branson (2002) said In our customers eyes, Virgin impasses for value for money, quality, innovation, pastime and a sense of competitive challenge We often move to atomic number 18as where the customer has traditionally received a poor deal, and where the competition is complacent We also look to deliver sexagenarian products and services in new ways. The brand attend Virgin is extremely well known throughout the UK. A brand summons is an indication of what to expect from a product a quality tale of a value-for-money signal (Hollensen, 2006). The most successful move Virgin Active submit made so far, is the 20 zillion invested, for a major refurbishment and upgrade programme.Despite these strengths, these can reverse weaknesses of the organisation.Frequently companies can become overly convinced with their brand come upon, and fasten on putting less attempts in developing the railway line. Thus, the organisation is under criminalisee of not developing, or existenc e able to sustain gloomy days in the future. The development in cater can also decline. Although 20 million was invested by Virgin, none of it was spent on employees. And so, a luck for Virgin is to invest to a greater extent time and finances on rung training.Leaders in the UK often lack dedicated attention from their supervisors to service develop in a planned fashion through round-the-clock learning, both from job experience and more formal training activities (Addison, 2006, p380). It is chief(prenominal) to have up-to-date staff development and training, as technology and the environment is constantly changing. If employees performance is weak, then the main priorities and strategies of the organisation become weak.3.2 environmental scanExternal environment mustiness be taken in to love, when developing a organisations strategies. The environmental analysis determines the organisations opportunities and threats. Thompson (1993, p. 246) said, managers should always be c aptive to changes and their decisions and actions should be both reactive and proactive as appropriate (Appendix 2). Thompson is defining the significance of managers adapting to different strategies depending on the environmental changes. The social environmental issues in the gymnasium market, is always changing and plays a crucial rule on deciding strategies. Virgin Active have forecasted expectancy growth, so they have a special discount for of age(p) nation (55 years old plus). These grey consumers are relatively rich. The over-fifties own around three-quarters of the demesnes financial assets and guard half of the discretionary budget (Hollenson 2006, p. 48). Yet, at that place is also many older who are financially restricted cod to the amplification in emolument bills, and were unfortunate to have no savings. This is why Virgins strategy of decreasing prices for the elderly has been effective and also, as the elderly have started adequate more function in this da y and age, it has also had a positive outcome.Additionally, the smoking ban in Britain, showed signs of a wellnessier Britain. Also, due to many campaigns and advertisements issuing fleshiness and illnesses, the majority of the public have become self apprised of health issues. Due to Hollywood/Bollywood and the general media, people are also becoming self conscious about their appearance. The stereotypical students have also changed theyre appearance, from the well known drinking, junk food eating, smoking danger zones to a more healthy-living lifestyle, recent surveys show. About one in four students is now teetotal, says depicted object Union of Student Services and among the rest of the student community there is a growing appetite for exercise facilities and healthy eating (Coughlan, 2006). engine room is ever changing, hence why Virgin Active spent 20 million to update their systems and keep up-to-date with modern technology. Taking these aspects into consideration is vital whiles planning strategies. According to the environment, changes in strategies should also be taken into consideration.3.3 Purpose, objectives and strategyWhen developing an organisations tendency, it should take into consideration why do they exist, whom will they serve and how its value will be change magnitude. It is vital to consider the organisations future challenges and opportunities.According to Lynch (2006,p. 340), there is three sections that help build the purpose of the organisation and should be examined at an early stage.The purpose of a organisation shaped by vision, leadership and ethicsVirgin Actives vision is to throw out wellness by bringing positive change in youre life (Virgin Active, 2008). This vision shows that it is going beyond its trus bothrthy climate, which is achieving sufficient revenue.Leadership in an organisation is crucial as the directors alternatives and the social responsibilities policies influence the purpose they define. Virgin Act ive is run by an independent board and is mostly shareholder owned. The Executive Director, Mathew Bucknall, has combined industry experience and who also developed Virgin Active by over winning Holmes Place, an established, popular gymnasium in the UK (Murray, 2006). This shows that the line of business is run by specialists who have great expertise in their field. Meaning, taking these elements in to account the objectives of the organisation is to expand their gyms by promoting health and wellness.Virgin Actives boot statement (Appendix 3) , shows that their goal is to be known around the world as a fun droll gym, available to everyone, who is tenderiseed, regardless of age or body size. Also, their goal is to expand their business in atomic number 63 within in the next three years (Virgin Active, 2008) .Also, without a undecided strategy, Virgin would not have been able to become globally known (e.g. South Afica). Strategies used by Virgin Active in tack together to expan d and also become available to all ages whereBy go different memberships to customers with various needs, E.g. tornadoing 2 month old babies to 15 year olds a class called Club-V.Virgin Active latterly invested 20 million throughout their clubs to up-date workout machines and for refurbishment.They also took over Holmes Place, gaining all their menstruum locations throughout Britain, tremendously helping their goals for expansion.3.4 Core competenciesA core strength makes the company different from others. Hamel and Prahalad (1990) said, core competency has three issues it provides customer benefit, it is hard for competitors to imitate and it can be leveraged widely to many products and markets. Virgin Actives core competency would be their brand name. As mentioned before, their brand name is what makes them stand out from other gymnasiums and is generally what customers would gestate extra for. Virgin Actives competitors can not take away the well known reputation that the n ame Virgin holds, for example, respected and trus iirthy. However, the smaller gyms such as LA Fitness also have a selling unique selling point (core competency). LA Fitness are very well known for their as their individualized trainers are highly qualified and highly skilled in getting the results the customer unavoidablenesss. This shows that all organisations have their unique selling point, which should be sustained by effective strategies.4 SWOT Analysis4.1 StrengthsVirgin Actives most crucial strength is there successful brand name and also their strong management skills. any venture Virgin has taken part in, it prioritises its consumers needs and wants.Virgin is an organisation that is market-driven. Market-driven organisations focus on the consumers fretfulness throughout the company. All departments recognize the importance of the customer to the success of the business (Jobber 2004, pp. 8-8).Virgin has an exceptional reputation throughout Britain. A brand name is an in dication of what to expect from a product a quality statement of a value-for-money signal (Hollensen Svend, 2006).The managing director, Mathew Bucknall invested the 20 million for refurbishment and upgrades. This was a muscular strategy for Virgins present and future.Virgin Active accommodate all ages by providing different memberships with special classes for the elderly to special classes for children Club V (Special child care fitness for children and entertainment) Allowing parents work out freely. Other gymnasiums do not offer this, including Fitness First.Due to the acquisition of Holmes Place, Virgin Active has gained primordial locations for its gyms, increasing the reputation and accessibility to the consumers.4.2 WeaknessesVirgin Active do not reduce their price and also sale volumes are limited as the gymnasiums can become overcrowded.Virgin Active depend on the brand name, too much.Fitness First and Living wellhead are two large competitorsThe club has increased th eir fee, for a normal member, from 45 in 2005 to 61 in 2007. This is due to the refurbishment, however, no member was go awayn a news letter. Members were given a small letterMembers are not in organize in the correct method about changes, as fees increased from 45 to 61 from 2005 to 2007 (due to refurbishment) and members were given a small letter, not a sincere letter or a newsletter.4.3 OpportunitiesAlthough Virgin Active give discounts to the elderly, can take more gain of the increasing grey population by having special classes, helping the elderly and do things easy for them.Virgin Actives current opening times are 600 am to 1030 pm, Monday to Friday, but as many people find it hard to go to the gym in these times e.g. taxi drivers, bus drivers, eatery workers, bar staff etc, the gym should have a couple of latish night openings available for consumers that cant attend before 1030pm.4.4 ThreatsThe gymnasium may have to invest in new services, as with a rising life expectan cy, the elderly that are members me not stay agreeable with the current service. A decrease in an active population is also a threat.Fitness first, one of Virgin Actives competitors has given women a specialized section for weight training, this could become a threat in the long term as women may enjoy the privacy. small percentage would rupture up the courage to enter the young-begetting(prenominal) dominated free-weights area (Kiernainder, 2006).5 Strategic ChallengesOne weakness from the SWAT analysis affecting the way Virgin Active operates is its two main competitors, Fitness First and Living Well. These competitors can have a direct impact on Virgin Active, in many ways, such as both competitors have branches world wide. A issue that is confronting Virgin Active, is that of Fitness First. Fitness First has recognize that 54% of customers going to the gym are women, thus giving them more priority. The organisation have decided to give a free-weights section, dedicated sca rce to woman. small percentage would pluck up the courage to enter the male dominated free-weights area (Kiernainder, 2006). Also, they have health clubs run by women, for women (Fitness First, 2008). This has turn out to be a success, and Virgin Active should consider to implement afew changes, to make sure they are reaching their goal, of a business that evolves around the consumer. It is important that a organisation is doing the best it can, so that customers truly believe they have made a good choice by joining. Living Well is also a globally known gymnasium, but, they do not offer anything special except from one day free passes which Virgin Active and Fitness First do not offer. Fitness First offer a free day pass, but afterwards, the customer must pay for their memberships. Virgin Active does not offer neither. The membership for Fitness First and Living well are relatively cheaper than Virgin Active. Virgin Active do not invest in training staff, hence customers could lea ve, due to bad customer service.See Appendix 46. Strategic options and choiceVirgin is a global brand. Meaning, Virgin Actives strategy should be ground upon expanding the business and developing the numbers of members. This form of strategy option is outlined as the expansion option. The model (See Appendix 5) identifies the essential characteristics of this strategy option. Strategies must remain sustainable, for Virgin to continue with its expansion. As mentioned before, their goal is to open more clubs in Europe, they are already globally operated and have also recently acquired Holmes Place. Yet, there is more strategies that Virgin can consider without major be included. As the grey population is rising, the organisation can take advantage of this and provide special classes, made for the elder. This would make it less complicated, easier, and user favourable for the elderly. In addition, Virgin Active could start opening later hours a couple of days a week, as this would d ifferentiate them from there competitors and increase customers as the very few gyms that are open till late, are reasonably busy. This would be a good strategy option for customers who currently cant make it to the gym, due to work. some other, relatively low cost strategy, would be to cater for woman. As Fitness First have already started a exclusive section for woman only, this would be a good choice to make Virgin Active diverse and would give them a unique selling point over most competitors. These are fairly low cost strategies that would bring more customers, meaning expanding the company.7. Management of implications and uncertaintyEvery business should implement their strategies, in other words put them into execute The prime aim in implementing strategy is to deliver the mission and objectives of the organisation (Lynch, 2006, p. 610). Taking uncertainty into account is important when undertaking strategies. Driskill and Goldstein (1986) defines uncertainty as the perce ived lack of information, knowledge, beliefs and feelings necessary for accomplishing organizational tasks (Palenchar and Robert, 2007, p. 126). The uncertainty table (Appendix 6) defines the two types of uncertainty as fuzziness and ambiguity. Fuzziness is present when definitive, sharp, clear or crisp distinctions are not made ( Emblemsvag and Endre, 2002, p. 844). Ambiguity is present when there is a inconsistency in deciding among different alternatives or a couple or more alternatives have been leave unspecified. Virgin Active has ambiguity uncertainty, because there is uncertain issues the might deal with, such as customers may want to start exercising outdoor(prenominal)s rather than deep down or the more elderly may want to join the gym. Another threat could be, people becoming more green or because of at once easy lifestyle people may become lazy or obese, having a knock on affect on memberships.Managers maybe making the correct decisions, but staff who execute these st rategies might not be doing it in the correct way. This could lead to deficiency. Managers must be ready and aware for changes that could take place, and should try utmost to apply correct strategies depending on the current issue taking place. An example of this could be, that there is no certainty that people will feel the same, as they could go towards being green. There are already fifty kelvin Gyms operating in the UK (Valle, 2007). Green Gyms are allowing people to exercise in the outdoors, without destroying the environment. Green Gyms are targeting people who want to make new friends, loose weight, and improve the environment. Research shows that, because the activities they undertake are not repetitive and aimless like other types of physical training, Green Gym participants tend to become more active in their day-to-day life (ibid). To tackle this uncertainty, Virgin Active could have some outdoor classes, instead of indoor. The outdoor classes could be yoga or jogs in a conflicting park. And if it becomes popular, Virgin Active could advance more outdoor activities.The process of implementing a strategic change and doing it in such a way that it lasts, is proof of the close relationship between an organisations personnel and any external specialists concerned. (Sadler.1993)Virgin Actives main purpose was to expand their club by promoting wellness.Virgin Active have implemented their objective, which is open to everyone, without age or build being a problem. The strategies the club achieved were The Club-V for infants, discounted memberships for the elder, the acquisition of Holmes Place and spending 20 million for improvement to the gymnasiums.The Virgin brand name, is definitely a asset to Virgin Active. Although the brand name is a strength, it can also become a weakness as some businesss become to proud of the brand name and forget to put effort into the organisation. There is also none indications of staff development. Invested my management , was 20 million but none of the finances were spent on staff.Uncertainty can also impact on the strategies being planned. Thats why scenario planning were suggested so Virgin has an idea of issues which may occur in the future or impact current strategies. This is very useful as it produces problems and solutions.For any business to be successful, it is vital that they are ready for change and that correct planning has taken place to ensure the success of which ever strategies are chosen.8. AppendicesAppendix 11968First issue of student clip1970Start of Virgin Mail Order effect1971First Virgin record shop opens in Oxford Street, London1972First Virgin recording Studio opens at The Manor near Oxford1973Launch of Virgin spirit Label. Virgin Music Publishing is established1977Virgin Records signs the Sex Pistols1984Virgin Atlantic Airways and Virgin Cargo are born1985Virgin Holidays is formed1987Virgin Records America is founded.1988Virgin Megastores opens new stores. Virgin Hotels castes.1990Virgin Megastores arrives in Japan1991Virgin Publishing (Virgin Books) is formed1992Virgin Records is sold to backbone EMI1993Virgin Radio hits the airwaves with Virgin 1215AM1994Launch of Virgin Vodka and Virgin sens1995Virgin Direct Personal Financial Services opens for business.1996V2 Music is created. Virgin.Net launches. Virgin Trains is launched.1997Virgin Radio is acquired by Chris Evans. Virgin Cosmetics launches1999Virgin unsettled launches Virgins first telecomms venture.2000V.shop, Virgin cars, Virgin Wines and Virgin Travelstore all launch2001Virgin cash brand is created. Virgin Experience launches2002Virgin notes introduces the Virgin denotation card. Virgin Mobile in the USA.2003V.Shops merges completely with Virgin Megastores2004Virgin announces the launch of Virgin Galactic developing space tourism for everybody2005Virgin Mobile launches in Canada2006 ii new businesses in South Africa Mobile and Moneyhttp//www.virgin.com/aboutvirgin/allaboutvirgi n/thewholestory/default.aspAppendix 2Definition of reactive and proactive outcomesReactive outcomes. The environmental analysis will highlight important strategic changes over which the organisation has no control but to which, if they happen, it will need to be able to react.Proactive outcomes. The environmental analysis will identify positive opportunities or negative threats. Then, the organisation will have to develop a proactive strategy to deal with the situation.(Ref Lynch, 2006, p. 79)Appendix 3Virgin Active mission statementTo challenge the norm, shake up the fitness industry, and restore norm gym offerings with the revolutionary concept of a life centre. Our huge all-embracing facilities deliver innovative solutions for health and wellness, while providing excellent value for money. convenient to everyone young, old, big, small, Virgin Active is a place where individuals can uncover their personal potential and have fun in the process (Virgin Active, 2008)Appendix 41Me mbers who left due to bad customer service.2Members who left due to other reasons.Appendix 5Expansion method matrixCompanyInside OutsideInternal developmentExporting overseas officeOverseas manufactureMultinational operationGlobal operationMergerAcquisition critical point VentureAlliancesFranchisesMergerAcquisitionJoint ventureAlliancesFranchiseTurnkeyLicensingHomeCountryInternati-onal(Ref Lynch, 2006, p. 467)Appendix 6Management of implications and uncertaintyUncertaintyFuzzinessThe lack of definite or sharp distinctionsVaguenessCloudinessHazinessUnclearnessIndistinctivenessAmbiguityOne-to-many relationshipsDiscordDisagreement in choosing among several alternativesDissonanceIncongruityHazinessConflictNo specificityTwo or more alternatives are left unspecifiedVariety genialityDiversityImprecision(Ref Klir and Yuan, 1995)