(California Fitness) background of the company, corporate vision, mission statement and corporate goals

3.0. Company Background

California Fitness is a wholly owned subsidiary of 24 Hour Fitness Worldwide which has a little fewer than 400 clubs serving more than 3 million members. The first California Fitness club was established in 1996 in the business district of Hong Kong. Currently, there are 16 clubs, after closures in four Asian countries, some abruptly breaking member contracts without reimbursements. California Fitness offers members the opportunity to experience the most innovative and largest number of Group exercise classes in the region as well as providing highly professional Personal Training from the largest group of Personal Trainers in the region. In addition to the cardio & resistance equipment, members can enjoy sauna & steam facilities, plus free internet via the in-club kiosks.

Beginning in 2005, California Fitness further differentiated its business by partnering with two fitness superstars, Jackie Chan and Yao Ming, to create signature clubs in the region. There are a total of 6 California Fitness-Jackie Chan Sport in Asia and 2 California Fitness-Yao Ming Sport in mainland China. Varieties of membership are available, including one-club membership to Zenith membership that allows cardholders to gain access of all 24 Hour Fitness and California Fitness clubs.

Mission

The mission of the California Fitness Centre is simple. They just want to help members live better through California Fitness.

Vision

To achieve their simple mission, California Fitness settles a vision which is designing the clubs to make exercise experience a pleasure. They want to build a good atmosphere for their customer who come and exercise there.

Statement

For California Fitness, exercise is like love. More you give, more you get back. That way, they are using “more you give, more you get” as their statement. For them, everyone can live healthily. It is just a matter of how they doing it. If they do good exercise, they will have a healthy life. If they want to lose weight, they must commit to exercise. Within that, it is believe they will be able to achieve the goal.

Goal

California Fitness should be able to achieve their goals which also become their objective in increasing sales at least 5% of gross profit in 3 years and entry to new market (Indonesia) by the end of 2014. The goal is to devote at least 5% of gross profit between 2012 and 2013 towards feasibility studies, resulting in entry into two new markets by the end of 2013.

Some strategies can be used to guide them to success such as Porter’s strategy, Ansoff’s matrix, BCG matrix, corporate goal market, and market entry strategy.

3.1   Porter’s strategy

For an organization to obtain a sustainable competitive advantage it is suggested that organization should follow either one of three generic strategies offered by Michael Porter which are cost leadership, differentiation, and focus (Eldring, 2009, 43). They are should not combine all three generic strategic because it cause high possibility “stuck in the middle” position. As a result, they will have no clear business strategy, which adds to their running costs causing a fall in sales and market share (Volberda and Tom, 2001, 242). “Stuck in the middle” companies are usually subject to a takeover or merger. To moving to Indonesia, They are more suggested to using cost leadership strategy. It is because in Indonesia, there are already a lot of gym centre with good price. Indonesian typically wants everything with cheap price with good quality. So to start open fitness centre, it is suggested to give big offer in front with good quality. As time passed by, they might increase the fee for others new member. With a good marketing and operational staff, it is believed that they will success in compete with others in Indonesia.

3.2 Ansoff’s Matrix

Ansoff’s matrix is a strategic tool used to aid the strategic thrust, which defines the future direction of the business. There are four generic alternatives steps in this matrix which are market penetration, product development, market development, and entry to new market (Mencer, 1996, 171).

To expand the business to Indonesia, California fitness is in market development product stage which means looking a new market with existing product and services.

3.3 Boston Consulting Group Matrix

Boston Consulting Group Matrix which well known with BCG matrix is usually used to evaluate a performance of the businesses in which a diversified organization operates. To evaluate the performance, BGC using both market growth rate and relative market share based. The matrix itself classified the businesses in which a diversified organization can engage as dogs, cash cow, question mark, and stars (Stonehouse et al, 2004, 92).

California Fitness center could be classified at stars stage. It is because California Fitness has a large share of rapid growing market. They could find a cash cow company to invest in their businesses to ensure their preeminent position

3.4 Market Entry Strategy

In terms of expanding their businesses to Indonesia, California Fitness should entry the market by Greenfield operation. Greenfield is an investment in a manufacturing, office, or others physical company–related structure or group of structure in a new area where no previous facilities exist (Denison, 2001, 84). Greenfield operation makes California fitness tremendous freedom in create creative management policy, culture, and all settings.