Bally Total Fitness Recommendation

5736 words, 23 pages

Intro Sample...

UGBA 106

The health club industry is an industry that is plagued with rapid growth and increasing competition. Clubs are struggling to stay competitive niche and emerging markets while remaining profitable. Many clubs seek multiple forms of revenue, Bally Total Fitness (Bally’s) being no exception. As one of the largest health conglomerates, Bally’s has had an interesting past riddled with successes and challenges. In the past few years, Bally’s has been largely scrutinized and has struggled to maintain positive net income and declining stock prices. This report serves as a recommendation as to how to deal with the problems that Bally’s is currently facing. In order to understand our recommendation, we would first like... View More »

Body Sample...

There has been exponential growth in the elderly enrolling in gyms. Fitness center enrollment for individuals over 55 have surged 273% from 1993 to 2003.

Memberships for individuals under 18 and 55+ have significantly increased in four years. Users under the age of 18 have increased by 12.3% and consumers over 55 have increased enrollment by 13.1%

Pricing techniques are quite intricate within the industry. Fitness facilities usually begin their affiliation with members through a one-time enrollment fee. The average fee within the industry is $150. Additionally, new members generally commit to a contract and a specified monthly or yearly membership fee. Many other methods of payment are prevalent, such as month-to-month and pay-as-you-go. But, contract subscriptions are most effective, in which 30% of members drop and 70% renew after the contract expiries. Bally Total Fitness has traditionally aimed to commit customers for longer periods, but has proven to be unpopular. Furthermore, facility fees serve as an additional source of revenue. This maintenance charge accounts for 28% of revenue for a traditional health club. However, profitability largely comes from personal trainer add-on programs, which accounts for 50% of revenue. These alternative sources of revenue are seen as the future for health club industry as they struggle to increase revenue from membership dues alone.

Bally’s History
Bally Total Fitness is a result of several mergers & acquisitions. Dave Wildman, a business tycoon, began his Health and Tennis centers by organically expanding and acquiring ...

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