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Competitive advantage isn’t just about price, as at low-cost gyms, but offering benefits that aren’t easily replicated (Boom Cycle, left)


Strategic Analysis Tools


• External analysis tools: PESTLE analysis and scenario planning


industry lifecycles and market segment analysis.


Key tools used in a strategic analysis might include:


• Competitive analysis tools: Five Forces analysis, strategic groupings,


• Internal analysis tools: value chain, capability analysis,


benchmarking and SWOT analysis.


number of strategic management processes: strategic analysis, strategic formulation and strategic implementation. This fi nal element includes monitoring and control. Although portrayed as a science


by many, the number of components and decisions inherent as the strategic processes unfold – and as the various processes overlap – suggests that to view strategy making in this light may be unwise. Basically ‘you pays your money and you takes your choice’. However, implemented effectively,


these strategic processes can be used by companies to identify competitive advantage in the shape of a differentiated blend of unique activities that prospects and customers of their specifi c business will value: the unique experiential features found at some high-end health clubs, for example, or the combination of low price, convenience and functionality found at low-cost clubs.


March 2014 © Cybertrek 2014


Strategic analysis Strategic analysis is concerned with understanding the organisation’s position within its environment. This includes an analysis of the organisation’s external environment, its competitive environment, its market segments and an assessment of the organisation’s internal environment – including understanding its strategic capabilities, which may help or hinder strategy. Overall then, a strategic analysis is


concerned with knowing your external business context, your competitors and how you fare against them, your potential and actual customers and your internal strengths, weakness and capabilities. This knowledge allows organisations to use their strengths to exploit opportunities while minimising their weaknesses and threats. The value of this deliberate approach


can be viewed within the health club sector itself. UK health club operators


struggling to combat the emergence of low-cost competition from the likes of Pure Gym and The Gym Group would have seen weak signals from the external environment as far back as 2006, and in the years since then. These signals could have been detected during a strategic analysis and strategies formulated to mitigate their impact. Currently, other signals from the


external environment suggest that future provision of physical activity may involve, as Algar calls it in his 2014 market report, ‘salami slices’. For example, group indoor cycling classes


– traditionally provided by health clubs – are now being appropriated by specialist microgym providers such as Boom Cycle and Psycle, particularly in markets like London. Strategic analysis aids the formulation


of strategy by alerting health clubs to these signals, rather than being blindsided by them. Furthermore, a bridge can be created


between the strategic analysis stage and strategy formulation by incorporating an additional piece of analysis: analysis of organisational purpose. This includes considering organisational stakeholders and understanding organisational culture. Also critical is having a clear sense of why the health club exists (its mission), knowing its desired future state (its vision) and having objectives that need to be achieved for health club success. In light of the totality of this strategic


analysis, future strategic objectives may be set. From there, strategies can be formulated to try to achieve objectives.


Strategic formulation Competitive strategy concerns setting the health club apart from its competitors. Although competitive advantage can be short-lived, as other


Read Health Club Management online at healthclubmanagement.co.uk/digital 57


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