...1. Situation Bally Total Fitness is a public firm in the U.S. health club industry. Since 1962, the company had developed into a large and nationwide commercial operator of fitness centers in the Unite States. But with the increasingly fierce market competition and the internal management problems such as poor accounting standards, the stock price of the company collapsed. Some shareholders had lost faith in the company. A major shareholder of the company was urging the CEO to sell the company. So the company faced two alternatives, one alternative was to sell the company to meet the demand of shareholders; the other alternative was to strengthen its internal control system to remedy the management fault. In this way to restore the stock price, restore the confidence of shareholders, and enable the company to keep a major player in the health club industry. Exercise gyms had a long history in the Unite States which can be dating back to 150 years ago. By 2004, the revenue of the U.S. health club was about $14.2 billion. There were more than 26,000 health clubs in the U.S. and over 13% of the U.S. populations for about 41 million were the members of these club. About 60 million people used health club in 2002 in the U.S. If coupled with non-members. One key driving point of health club phenomenon was the growing awareness about health and well-being, and concern about obesity and its effects among Americans. In 2004, two-thirds of adult populations were recognized as being...
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...healthy and fit, the fitness industry is maintaining steady growth because of better dietary practices and a resurgence to play and become more active. It is no surprise the demand for gyms and health and fitness clubs will continue to rise. Therefore, my paper will cover the critical concepts as it relates to Bally Total Fitness Case Study. I will highlight Bally’s history, macro environment, SWOT analysis, corporate-level strategy, business-level strategy, and my recommendation for Bally Total Fitness. History, Development, and Growth Dave “Wild man” Wildman is said to be the founder of Bally Fitness, but it was Raymond T. (Ray) Moloney back in the early 1930’s who decided to create an affordable past time of pinball. Anyone could play pinball at the price of seven balls for one cent or 10 balls for a nickel. In January of 1932, Ray founded the popular past time while working under Lion Manufacturing in Chicago. The Ballyhoo pinball game was easy to make and very profitable. With the creation of the “Goofy,” the “Airway,” the “Rocket,” and the “Bumper” pinball machines, Bally Manufacturing, under Moloney’s leadership, took off. Bally Manufacturing headquarters remained in Chicago at the same address for almost 50 years. In 1936, Bally Manufacturing developed the automatic dice machine named “Reliance”. This development was an overnight success and prompted further delving into the three wheeled slots, and the newest addition the “Bally Baby.” The “Bally Baby” was a five...
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...Bally Total Fitness – Case Summary Bally Total Fitness is born in 1962 and become leading firm in US Health club industry. Since 2002, Paul Toback as CEO has did a lot of intervention to avoid Bally from banckrupcy. Consumer demand for health club has been arise in USA. By 2004 US health club industry took in revenur of $ 14.1 billion with more than 26.000 health club operated in the United States, compare in 1987 only 11.800 health club (Exhibit 1). The demand cause Americans become more concern about their health since two third of adult population categorized as overweight and nearly one third as obese. The motivation to join health club are a disire to lose weight, to get in shape, to meet people or to reduce stress. The frequency of health club attendance in 2001 has arise compare to 1987. The people visited health club more than 100 days per year in 1987 only 31% become 41 % in 2001 (Exhibit 2). More people in younger age has increase as member in health club 12.3% in 2001 compare to 1997, and people in age 45-54 also increace 11.5% as well as age 55+ increase 13.1%. Most club equipped facilities with aerobic and weight machines. Some health club provide swimming pool. Total capital required for 40.000 – 50.000 square-foot health club was roughly $1.5 million, with $500.000 in equipment alone. Smaller health club can be built with cost $144.000 to buy equipment for 10.000 square-foot. Health club format in United States : * Owner-operated clubs : Operated...
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...BACKGROUND AND OVERVIEW Bally Total Fitness was created in 1996 with Lee Hillman as its first CEO. Bally traces its existence to the Health and Tennis Corporation, run by Dave Wildman. Wildman had begun to purchase ailing gyms and aggressively expanded and acquired several other brands as well. In the 1990s, as part of a diversification move, Bally Manufacturing, a gambling equipment company, decided to purchase Wildman’s collection of gyms and other brands. This diversification of brands created what was known as Bally Entertainment. Bally Total Fitness was then created in 1996 as the health club portion of Bally Entertainment. Lee Hillman started the company off in an unusual path, Mr. Hillman used a retrenchment strategy by selling off outlets, rationalizing Bally’s brand portfolio, and closing several clubs, which then returned the business to profitability. During Hillman’s course of leadership, Bally developed a very broad range of products and services, which increased revenues out of the company’s existing membership base and added profit to the bottom line. The company faced a triggering event when Bally’s CEO Lee Hillman stepped down suddenly in December of 2002. Bally’s chief operation officer at the time, Paul Toback, replaced Mr. Hillman and moved to the top of the company. Toback’s started as CEO explaining that he expected changes to the company to be “more evolutionary than revolutionary”. Under Hillman’s lead, Bally was operating essentially as two different...
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...An Analysis of the U.S. Health Club Industry in 2004 and the Role of Bally Total Fitness Executive Summary Introduction The rise of the U.S. health club industry can be traced back to the 1980s and 1990s when the majority of health clubs emerged. By 2004, this $14 billion industry claimed 41 million members. Although the health club industry operated in a perfectly competitive market, several prominent key players gained large market share, including Bally Total Fitness and 24 hour Fitness. This perfect competition encouraged entry of smaller emerging firms into the industry. In 2004, the health club industry consisted of 26,000 clubs in the U.S. Of this growing market, the fifty largest firms were responsible for 33% of industry revenue and 38% of the clubs was not-for-profit. The for-profit industry was divided into the following formats: owner-operated clubs, franchised clubs, design and management companies and health spas. Bally Total Fitness, the largest publicly traded health club operator in the United States in 2004, claimed over 3.6 million members worldwide. This multi-million dollar company had earned a reputation as being the “largest and only nationwide commercial operator of fitness centers” in the United States, a substantial leap from the single modest club that first opened in 1962. Several advantages contributed to Bally’s success over the other health clubs in the industry. CEO...
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...A Case Analysis of Bally Total Fitness’s External Environment Group 2: Meghan Cree, Sarah Medve, Rachel Hamrick, Jacob Rath, James Wallerstedt, Samuel Kube Due: 01/27/15 Word Count: 2039 Case: Bally Total Fitness By 2004, Bally Total Fitness was a major leader in the $14.1 billion health club industry. With over 400 million facilities worldwide, Bally was the “largest publicly traded health club operator in the United States in 2003” (Wells, John R., 1-7). Bally’s success was fueled by many components including membership revenue, various products and programs, and their recognizable, worldwide image; however, in 2004, Bally faced a major shock to its reputation. Fraudulent accounting practices were discovered and examined, resulting in an uproar from shareholders, complaining of financial misrepresentation. As a result, Bally Total Fitness faced a drop in their stock price, lawsuits from current shareholders, and a damaged repute. The following analysis will evaluate how the general external environment affects Bally Total Fitness, examine Bally Total Fitness’s current standing in the health club industry, options on how to rebuild its status in this industry, and solutions to implement for eliminating any skepticism among shareholders and increasing membership numbers. Macro–Environment Analysis Gym and exercise equipment manufacturers are constantly upgrading current models of exercise machines as well as developing innovative designs...
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...Bally Total Fitness Case 1 2011 Fall Comm 400 Health Club Industry Bally Total Fitness was a leading firm in the health club industry. Since market competition had intensified, Bally’s stock price dropped leading to an investigation by the Security and Exchange Commission. To improve Bally’s current position, we apply the Porter’s Five Forces Model to analyze its external environment. The competitive rivalry in health club industry is intense as there are many small or equally sized competitors. In addition, exit barriers are high because of higher capital costs and operation costs, indicating that the health club industry is hard to exit. Equipment makers are the industry’s major suppliers. Suppliers have high bargaining power because there are only a small number of well-known suppliers. Consumers are the buyers and have moderate bargaining power when choosing a health club, because there are numerous clubs in the industry. But once they are committed to memberships, they have a lower bargaining power. The threat of substitute products is high. Consumers can workout at home, outdoors, or at gyms within their workplaces. Besides, they can go to health spas designed for workouts. Nutritional and athletic products are complimentary to the health club industry. The threat of new entrants is rather low because it is difficult to acquire decent real estate or a good location; also, exercise equipments are highly valued. Consumers who have had a good experience with their...
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...Strategic Analysis Masters in Management, Spring 2016 Final Exam (due no later than Tuesday 8th March 2016 at 23:59 UK time) Case: Bally Total Fitness Questions: Question 1: Did Bally have a competitive advantage in the U.S. health club industry (around 2004)? Use the tools and frameworks covered during the course to address this question. [70 points] Question 2: How serious are the competitive threats faced by Bally Total Fitness in 2004? Feel free to consider broader elements in the firm’s environment (i.e. consumer trends) and actions of competitors. [10 points] Question 3: What would have been your recommendations to Paul Toback, Bally’s CEO, as he pondered about the future of the firm in 2004? Justify your answer using case facts but make sure you develop logically concrete arguments. [10 points] Additional 10 points will be granted for clarity, structure of argument, completeness of the analysis and logical consistency. Administration: If you think a question requires more details you may incorporate any assumptions you think are required to answer it. Clearly state your assumptions in your answers. If they are reasonable you will be given credit. Use a maximum of 4 pages (sensible margins, Times New Roman size 12 font or similar). Be sensible- if you think the font may be too small or the margins too narrow then they probably are. Where needed, external material from the web is allowed with referencing to the original source...
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...Ernst & Young EXECUTIVE SUMMARY Ernst & Young commonly referred as EY, is one of the Big Four professional services firms along with Deloitte, PricewaterhouseCoopers and KPMG Ernst & Young is a multinational professional services firm headquartered in London, United Kingdom and was the third largest professional services firm in the world by aggregated revenue in 2012. The firm has employed 167,000 people and has more than 700 offices across more than 140 countries, providing assurance (including financial audit), tax, consulting and advisory services. In FY 2012, EY earned a record of $24.4 billion USD in revenue, ranking the third among the Big Four, after PricewaterhouseCoopers and Deloitte, ahead of KPMG. Ernst & Young offers its services to companies in a vast range of industries, including asset management, life sciences, mining, media and entertainment, retail, technology, and hotel and leisure. The company's financial reporting segment offers an IFRS/GAAP comparison so companies can compare and contrast the international and US accounting standards. The group's members firms are organized in four geographic areas: Europe, the Middle East, India, and Africa; the Americas (including Ernst & Young LLP); Japan; and the Asia/Pacific region. Ernst & Young is increasingly focused on the emerging markets, which have seen more rapid economic recovery than the developed nations. The company sees the trend of growth in the emerging markets as one that...
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...strong value held by many Asian cultures is the importance of one’s health, natural healing, meditation, and spirituality. These core health values within the Indian society alongside the emergence of Western influence on aesthetics, appealing body physique (slim and toned for females, muscular and built for males) serves as a perfect business opportunity for L.A. Fitness to expand into the Indian market. Opening L.A. Fitness in India to promote good health and well-being the “western” way seems fitting to the common “East meets West” motto. L.A. Fitness established in 1984 and has acquired Bally Total Fitness which currently has operations outside of North America in China and Korea. L.A. Fitness has based its strong expansion from its commitment to understanding and meeting the distinct needs of each community they serve. It offers a wide range of amenities beyond the core gym machines/free weights such as swimming pools, tennis courts, hot tubs, saunas, group classes, personal training and most importantly highly trained staff. This allows for a fun, pleasurable and effective workout for all ages and fitness level Our target market will be the young aged, middle class. The Indian middle class is projected to grow over the next two decades from 5% of the population to more than 40% and represent the fifth largest consumer market in the...
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...Diamond model Solution: Industry Overview Kraft Foods Inc operates in the food and beverages industry. The industry is constituted by those companies that involve in stages of activities from procuring the raw food material after harvest till the retail purchase. The activities involved are the processing of raw food materials, manufacturing, packaging the food products and distributing them. The products may be fresh, prepared foods, packaged foods, alcoholic and nonalcoholic beverages. All the products that are meant for human consumption except the pharmaceutical products belong to this industry. The dairy sector forms the largest part of the food industry. The baked and cereal items and chilled foods are the close second and third. In case of the beverages industry, it is divided into alcoholic and nonalcoholic segment. A vast of the alcoholic market is made up of beer, cider and other flavored alcoholic beverages. On the other hand, soft drinks, coffee, tea, juice and water constitute the nonalcoholic beverage market. The industry is highly competitive and fragmented. Though the competition is among few notable players, no player has a dominant position to dictate the price levels. The players rely largely on advertisements to promote their brand and secure the market position (Food and Beverages Industry Profile, 2009). Market size: With over 16.5 million people employed, the US food and beverages industry constitutes around 10% of the country’s Gross Domestic Product...
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...Diamond model Solution: Industry Overview Kraft Foods Inc operates in the food and beverages industry. The industry is constituted by those companies that involve in stages of activities from procuring the raw food material after harvest till the retail purchase. The activities involved are the processing of raw food materials, manufacturing, packaging the food products and distributing them. The products may be fresh, prepared foods, packaged foods, alcoholic and nonalcoholic beverages. All the products that are meant for human consumption except the pharmaceutical products belong to this industry. The dairy sector forms the largest part of the food industry. The baked and cereal items and chilled foods are the close second and third. In case of the beverages industry, it is divided into alcoholic and nonalcoholic segment. A vast of the alcoholic market is made up of beer, cider and other flavored alcoholic beverages. On the other hand, soft drinks, coffee, tea, juice and water constitute the nonalcoholic beverage market. The industry is highly competitive and fragmented. Though the competition is among few notable players, no player has a dominant position to dictate the price levels. The players rely largely on advertisements to promote their brand and secure the market position (Food and Beverages Industry Profile, 2009). Market size: With over 16.5 million people employed, the US food and beverages industry constitutes around 10% of the country’s Gross Domestic Product...
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...Crafting and Executing Strategy Assignment 1 By Sarisa Sukbumrung BUS 599 Dr. Johnnie. Drake E. Drake, Jr. Strayer University Fall 2011 Abstract The objectives of this paper are to illustrate the business strategy of Jet Blue airways. The company’s strategy advantages, i.e., the quality of services, market strategies, and employees trained and challenges of a company competing on price. Latterly, focus on how the company deals with high competitive market industry, shareholder and financial management. Assignment: #1 - Crafting and Executing Strategy 1. Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The trends in the U.S. airline industry, most of the U.S. airlines are operate in discount airline carrier by offering the passengers low fares, operated point to point system, used two types of aircraft and served only snacks, also provided quick turnaround times at airports. The most of the U.S. airline concentrated in the domestic route, however most the domestic flight can help the company gain small amount of the profits margin. It is the high competition between the pricing of each airline to attract the customer. Many airlines save the time ranged from 20 to 30 minutes during the flight because no meal served during the flight, so the plane do not have to wait for catering services to replenish the aircraft. Although, to save time for flight attendants to clean up all the trash, that is also help...
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...their movements, sleep, and food consumption (Jawbone). The wristband makes it easier for users to live a healthier lifestyle in an organized manner. The Jawbone UP would be considered in the industry of fitness and wellness. Its competition includes companies like Basis Band, Fitbit, DirectLife, Adidas miCoach Pacer, Nike+, Valencell, and many other devices. The industry size for this product can be seen as large for that there are many competitors with the Jawbone UP and living healthier lifestyles is trending. Many companies such as Nike+ and Fitbit have been in the industry for quite some time creating most of the industry’s market share, but with many new companies creating tracking devices of their own as well as smartphone apps have made the industry larger and more competitive. Current trends involved in the fitness and wellness industry are being developed from individuals as well as corporations. Today, individuals are looking for new ways to lose weight, reduce the amount of stress in their lives, and live healthier lifestyle trends. Individuals will start to become more proactive in trying to keep up with these healthier lifestyles that will lead companies to involve themselves in this new market to combat the higher healthcare costs. Another major trend in the fitness and wellness industry is the obesity crisis happening in the United States. Many Americans have developed inactive and poor eating habits leading to preventable diseases like diabetes and heart problems...
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...Lus10552_ch09_321-355 7/3/06 21:21 Page 321 CONFIRMING PAGES CHAPTER 9 Motivating Performance LEARNING OUTCOMES After completing this chapter, you should be able to: 1. Explain the motivation process and the three factors affecting performance. 2. Describe four content motivation theories. 3. Describe two process motivation theories. 4. State how reinforcement is used to increase performance. 5. List the four steps in the model for giving praise. 6. Identify the four parts of the model for writing objectives. 7. Explain the three steps of managing by objectives. 8. State ways to enrich, design, and simplify jobs. 9. Explain possible limitations of using motivation theories outside North America. 10. Define the following 16 key terms (in order of appearance in the chapter): motivation performance formula content motivation theories needs hierarchy two-factor theory manifest needs theory process motivation theories expectancy theory CHAPTER OUTLINE The Importance of Motivation What Is Motivation and Why Is It Important? How Motivation Affects Behavior, Human Relations, and Performance Copyright © 2008 by The McGraw-Hill Companies. All rights reserved. equity theory reinforcement theory giving praise objectives management by objectives (MBO) job enrichment job design job simplification Content Motivation Theories Schedules of Reinforcement Organizational Reinforcement for Getting Employees to Come to Work and to Be...
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