Attractiveness of German Fitness Industry for Global Investment

This essay evaluates the potential of the German fitness industry for investment by global companies like GoodLife Fitness Centers Inc. It discusses the domestic market performance, target market, competitors, financing, market entry mode, corporate social responsibility, marketing plan, risk assessment, and concludes with recommendations.

GoodLife Fitness Inc.
Germany

Introduction
People are beginning to understand the importance of fitness programs
based on the numbers of enrollment at fitness centers.The campaign
and awareness of health and fitness programs seems to grow day by
day, and many people are enrolling in fitness programs, and permanent
studios are created and established all across Germany. However, the
market is getting saturated, and market barrier entries are high making
it hard and only a few fitness studios in Germany seem to generate a
substantial revenue of the gross turnover. Thus, this essay will be
evaluating the attractiveness of German fitness industry for potential
investment of global companies such as GoodLife Fitness Centers Inc.

Domestic market performance
GoodLife Fitness Centers Inc. was established in 1979 by David Patchell-
Evans and is located in London, Canada. Company goals are grounded
on ensuring delivery of high-quality services coupled with education
and training, hygiene in the workplace and a variety of programs. The
company now boasts of a larger facility with state-of-the-art facilities.
The Kitchener-Waterloo region is reported to have approximately
fifteen clubs specialized on offering fitness and exercise activities that
serve a population of roughly 450,000.

Target market
The fitness industry has been reported to be one of the fastest growing
sport sectors in Germany. At the end of 2014, more than 9 million
members spread across 8000 studios. The government is highly
respected and recognized by the German population. The general
environment can be said to be peaceful and stable. A developed
economy with its people having high living standards sustained by the
skilled workforce and productive society. The fitness studios in
Germany are legally regulated and are only allowed to provide certified
equipment while the operator and the trainer are bound by law to have
possession of indeed specified licenses

competitors
The threats of substitutes are high, despite the fact that the fitness
industry in Germany commands a broader market with regards to
membership subscriptions, other sports also have attractive
membership also. The three identified fitness that command a large
share of German fitness market include McFit, FitnessFirst and Clever
Fit as they have many studios and large membership subscriptions.
Entering the German market is expensive as there is high initial capital
required for instance costs associated with establishing a location,
equipment, insurances and other miscellaneous expenses.

Financing
Penfund provided its second lien credit totaling to $100 million to
GoodLife Fitness Centers Inc. The proceeds from such financing summed
with the initial $310 million lien and revolving credit facility given by a
syndicate of banks are used to refinance the existing debt and the other
part of the proceeds used for expansion of the company. More than one
million Canadians pursue and achieve their goals with regards to health
and fitness would not be a dream come true were it not for the constant
support of Penfund and other financial partners. Funding from
independent institutions such as Penfund and other financial
institutions, GoodLife has a got a long shot in expanding to other foreign
viable markets as it has enough resources to venture in a new market

Market entry mode
It is a common practice that small businesses get tempted to dive in
foreign markets; a local agent plays a vital role in saving a company both
time and resources. Goodlife Fitness could choose a representative in the
fitness industry who they could enter into legal contracts. For instance,
GoodLife could use the services of German agents and representatives
who are authorized to have contractual sales agreements with foreign
customers on behalf of Goodlife. Representatives could be of help in
several ways, for instance, they could research existing and potential
markets, provide advice on various options with regards to financing and
modes of transportation, customs clearance, disseminating vital
information regarding German business practices.

Corporate social responsibility in
Germany
Safety and health system in German’s places of work employs a dual
structure. Officials of the respective departments such as the
supervisory authorities and accident insurance institutions have an
oversight role over enterprises and provide advice where needed. The
adoption of motor vehicle measures and incentives to catalyze the
replacement of old automobiles with cleaner and quieter ones. A
decline of the most polluting sectors such as iron and steel;
modernization of equipment and plant coupled with a turnover of
outdated equipment translating to higher productivity and cleaner
mechanisms

Marketing plan
Source of global-renowned Les Mills Fitness Programs. Virtual fitness
classes for people who either cannot make it to scheduled classes or
seek to try out a fitness class all by themselves. Personal trainer
certified who provides customized training assisting trainees in
achieving healthy results faster than anticipated. A segment of teen
fitness where the teens participating have access to the whole GoodLife
club except for sauna and pool. Goodlife members have access to
recipes, nutritional guidance from experts and knowledge regarding
how to develop and establish a healthy, nutrient-rich diet irrespective
of their goals.

Risk assessment
GoodLife Fitness has to be cautious on its pricing strategy as it should
also offer a price slightly lower than this for its products.A republic with
an estimated population of 81 million people is a politically stable
country as its population hold its government in high regards making
the whole state calm and peaceful making the country viable for
investment.The largest group that frequent the German fitness studio
ranges from 30-49 years old. Such figures indicate the demand for
services from the fitness studios portraying Germany as a potential
market for fitness products.

conclusion
Robust growth of the market has been hailed to be stronger than the
gross GDP which portrays a good sign of the economy. The fitness
market is highly competitive and barriers to venture the market are
high intensifying company rivalry. It would be recommendable to invest
in an existing studio through representatives and agents. Such a
strategy will not only open an opportunity to mitigate against risk entry
barriers but also to benefit from the economies of scale of GoodLife
Fitness and the presence of established assets.