Health Club Business Plan

Corporate Fitness

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Market Analysis Summary

4.0 Market Analysis Summary

In 1991, the U.S. medical bill was £738 million, of which businesses paid 30 percent. Recent studies indicate returns on investments in wellness programmes for various companies ranging from £1.91:1 to £5.78:1. General Electric's aircraft engines division, for example, saves £1 million per year through its wellness programmes. Traveller's Insurance Company reported savings of £7.8 million in 1991, attributable to its wellness programmes, and a return of £3.41 for every pound invested in wellness.

Important demographic changes are taking place in America that point to the importance of worker productivity in coming decades.

• 16 million new jobs will be created by the year 2000, but there will only be 14 million workers to fill them.
• By 1995, women will comprise one-third of the work force, a ratio that will increase to one-half by the year 2000.
• An estimated 80 percent of jobs to be filled in the immediate future will require more than a high-school education. Only 74 percent of Americans, however, finish high school, and only 67 percent graduate with adequate skills.
• The number of skilled workers available to fill new jobs is decreasing, meaning that employers are facing more severe competition for labour. Thus, the health and productivity of each employee becomes crucial to a company's success.

4.1 Market Segmentation

The market for corporate fitness is not particularly segmented, as potential customers include all downtown businesses that offer their employees some type of medical benefits, are experiencing escalating health care costs, and wish to more effectively manage those costs.

Corporate Fitness, however, segments its services for individual organisations. Corporate Fitness works with senior management to develop mission statements and provide incentive plans, and with employees to design personalised health and fitness programmes.

Market Analysis

Market Analysis
		1995	1996	1997	1998	1999
Potential Customers	Growth						CAGR
Corporate Employees	35%	750	1,013	1,368	1,847	2,493	35.03%
Manufacturing Employees	15%	250	288	331	381	438	15.05%
Industry Employees	25%	500	625	781	976	1,220	24.98%
Other	15%	300	345	397	457	526	15.07%
Total	26.96%	1,800	2,271	2,877	3,661	4,677	26.96%

Market Analysis (Pie)



4.2 Service Business Analysis

Several small fitness facilities are currently in operation in the downtown area, none of which cater their services to corporations. These organisations are primarily exercise facilities with little emphasis on personalising individual plans to improve working performance.

4.2.1 Business Participants

Participants in the fitness industry include national, regional, and local organisations. On the national level, companies such as Gold's Gym and the YMCA offer exercise facilities and training programmes. At the regional level, firms such as Better Bodies and Bally's offer comparable services, while locally, privately-owned businesses provide similar, but less extensive services to exercise-seekers.

4.2.2 Distribution Patterns

Few fitness centres are located in the downtown Seattle area, while the majority are found in suburban neighbourhoods and shopping complexes. Those in the downtown area are located close to professional centres containing restaurants, parks, and other recreational activities. In suburban locales, these establishments are often found close to grocery stores, restaurants, and retail stores.

4.2.3 Main Competitors

The three main competitors for Corporate Fitness are:

• YMCA-market is lower-income families and/or students who want accessibility and affordability of fitness facilities.
• Gold's Gym-services are targeted toward those motivated and dedicated individuals who workout five to seven times per week.
• Better Bodies-aimed at casual fitness-seekers who do not workout with a high intensity but still desire the status and recognition.