Planet Fitness Business Strategy: Research, Analysis & Action Plan

This report provides a comprehensive analysis of Planet Fitness' business and strategy management, examining the company's background, internal and external factors, and strategic planning methodologies. It utilizes tools such as IFE, EFE, CPM, BCG matrix, Grand Strategy Matrix, and QSPM to evaluate the company's competitive position and identify opportunities for growth. The report details Planet Fitness' cost leadership and judgment-free zone philosophy as key strengths, while also addressing weaknesses such as marketing strategy and rival offerings. An action plan is proposed for international market expansion and enhanced staff training, aiming to capitalize on market opportunities and improve operational efficiency. The analysis concludes with strategic recommendations for Planet Fitness to sustain its market leadership and achieve further growth.

Running Head: Business research on Planet Fitness 0 | P a g e
Business Management and Strategy
Management
Strategy Planning for Planet Fitness

Business research on Planet Fitness `
1 | P a g e
Table of Contents
Introduction................................................................................................................................2
Background of the company......................................................................................................2
Technical analysis......................................................................................................................3
Internal factor evaluation.......................................................................................................3
External factors evaluation matrix analysis...........................................................................4
Critical path method (CPM)...................................................................................................5
BCG matrix............................................................................................................................5
Grand strategy matrix.............................................................................................................6
QSPM analysis...........................................................................................................................6
Strategy Formation.....................................................................................................................7
Strategic Action Plan..................................................................................................................7
Gant Chart for the Above Action Plan.....................................................................................10
Conclusion................................................................................................................................10
Bibliography.............................................................................................................................12

Business research on Planet Fitness `
2 | P a g e
Introduction
In today’s world there is a high demand for variety of new and innovative business
strategies to grow the market of their products and services. Today, with the changes in
technologies, the age of competition in which all the restrictions related to institutions and
legal are getting easier and different barriers in business are crumbling. In this report,
business research on Planet fitness has been conducted.. In the last decade many studies have
published by recognized authors around the world and these studies states that growth of an
organization can only lead by the innovations and strategic management. (UME, 2015).
Planet Fitness has used several strategies and an effective management to grow its business in
United States of America successfully. These strategic approaches are the imperative steps
which help Planet Fitness to become the largest fitness club in terms of number of locations
and members with a total 1500 clubs. In this paper a complete analysis of business
management and strategy management of the American fitness firm Planet Fitness is
presented. Planet Fitness is one of the largest fitness firms operating in different states of
United States with an effective management in both the business management and strategy
management (Rastislav & Silvia, 2015).
Background of the Planet Fitness
In the year of 1992, Planet Fitness was founded by Michael and Marc Grondahl, in
Dover, New Hampshire. This was the time when Michael and Marc acquired a struggling
gym and they reduced their product prices to make a stand against the well-known brands at
that time. After one year in 1993, Grondahl brothers decided to hire a front man as the current
CEO of company to grab the opportunity to serve the larger segment of population by simple
strategy to provide a better fitness environment to the customers. This change in the

Business research on Planet Fitness `
3 | P a g e
environment was all about changing both the format and attitude of the company for its
customers. For this change they hired Chris Rondeau as the current CEO of the company.
After this change Planet Fitness was known as the “Judgment Free Zone” focusing more at
the average user than the passionate bodybuilding users. Then, in the year of 2003, it was the
management who decided to open its first ever franchised location in Florida, with Eric Dore
and Shane McGuiness. In 2013 TSG Consumer Partners LLC became the equity partner of
Planet Fitness (Lawrence, 2013). Planet fitness has reached a milestone of 1500clubs
claiming its clubs in all 50 states of US (Kufahl, 2018).
Technical analysis
This technical analysis has been used to identify present strategic plans, all the internal
and external factors of the business.
Internal factor evaluation
Internal factor evaluation is used to evaluate strengths, weaknesses an all the internal
environment factors of the Planet Fitness The IFE is used by Planet fitness to compete in the
market and improve its existing business functioning. To work on the internal factors of the
company Planet Fitness has two key strengths which are given as below
Cost leadership- The price of planet fitness gym membership and the second one is its
judgment free zone philosophy. Planet Fitness charges just 10$ per month for the unlimited
services which is the key sales element.
Product offering/ differentiation- The second key factor of judgment free zone
philosophy attracts the main segment of the market instead of the body builder segment. This
is because the Planet Fitness organization has found that the market growth of the company is
in providing its services to the average person. And to attract the average person company

Business research on Planet Fitness `
4 | P a g e
create this “Judgment Free Zone” philosophy to make sure that the environment of their
stores must be comfortable for the average person (Jurevicius, IFE & EFE Matrrices, 2014).
Strength Wight Rating Weighted score
Training centers .4 4 1.6
Customer
satisfaction
.3 3 .9
Financial position .2 5 1.0
Brand image .1 4 .4
Total 1 3.9
Weakness
Less effective
communication
.03 3 .9
Research and
development
.2 4 .8
Marketing strategy .3 4 1.2
Rival’s offering .2 2 .4
Total 1 3.3

Business research on Planet Fitness `
5 | P a g e
External factors evaluation matrix analysis
External factors evaluation matrix used to identify the major variables on which the
planet fitness should react against its rivals. Target market for the Planet Fitness is between
the ages of 15 and 44 who are looking for the population around the locations of its franchise
outlets. This segment being the main target of organization requires evaluating the external
factors related to the particular segment (Zkjadoon, 2016). For this, Planet Fitness thinks
about some major external factors such as:
 Globalization makes it easy to enter international market.
 People are looking for cheap gym memberships.
 Demand for new products.
 Increase in inflation rates creates a demand in lower priced products.
 Many gyms are pricing their membership to attract the people.
 Increase in the number of competitive fitness firms.
In this manner Planet Fitness study its above mentioned external factors and calculate
their respective weighted ration to prepare this matrix as

Business research on Planet Fitness `
6 | P a g e
External key factor
Opportunity Weight Rating Weighted
score
Globalization makes it easy to
enter international market
.20 3 .60
People are looking for cheap gym
memberships.
.20 4 .80
People are looking for cheap gym
memberships.
.10 3.5 .35
Demand for new products. .15 4 .60
Increase in inflation rates creates
a demand in lower priced
products.
.10 3 .30
Many gyms are pricing their
membership to attract the people.
.15 3.5 .525
Increase in the number of
competitive fitness firms
.10 4 .10
Total score 3.275

Business research on Planet Fitness `
7 | P a g e
This score of EFE matrix for Planet Fitness comes out 3.275 which makes the company
to be placed in quadrant number
Critical path method (CPM)
CPM is one of the management analysis methodologies. This methodology is
implemented to determine the best suitable way to reduce the overall time period to perform a
competitive repeating task which are required to provide a better support every time. In the
beginning this method was used to detect the suitable path to perform any routine task for an
organization. But today in this very competitive market all the organization use this method
to reduce the time period for the implementation of some innovative tasks to make their
organization survive in the current market. This method provides the best estimated time to
the decision makers and the executives of the organization to help them for the execution of
any task. This method also helps to identify the alternate ways to perform any task without
any hurdle (Agyei, 2015). This method helps Planet Fitness to decide the below prepared
strategic action plan in order to extend their business over the seas and attract 80% of their
targeted market segment who were not having a gym.
Higher moderate
weighted ratio of
external factors
Maximum
weighted ratio of
external factors
Minimum
weighted ratio of
external factors
Lower moderate
weighted ratio of
external factors
Rapid market growth
Strong
competitive
position
Slow market growth
Weak
competitive
position

Business research on Planet Fitness `
8 | P a g e
BCG matrix
Growth- share matrix or the BCG matrix is a planning tool used by the management of
Planet Fitness, to determine the quadrant of relative market share on horizontal axis and the
speed of market growth on the vertical axis of the quadrant. This tool was created by the
Boston Counseling Group to determine the strategic growth or the stand of the organization
and potential of the organization to grow in the near future. This analysis assisted
management to determine that Planet fitness fall in the star quadrant. (Jurevicius, Strategic
Management Insight, 2013).
Grand strategy matrix
Grand strategy matrix is an important analysis tool used for creating alternative strategy
plans for the company or an organization. This matrix method consists for four quadrants
similar to the BCG matrix plan. In this matrix plan each quadrant contains alternative

Business research on Planet Fitness `
9 | P a g e
strategies and entire firm with its respective divisions. This below given matrix chart shows
that Planet fitness will under the Quadrant-2
QSPM analysis
An organization must decide its strategic planning, like when, where and how it can
engage the existing as well as the potential customers through any means of medium. These
mediums can be pricing tactics, advertising, customer services, sales representatives etc.
Quantitative strategic planning matrix is used to evaluate the best strategic planning of an
organization from all the strategies developed by above methods. The analysis can be done
by different methods as discussed above but the best strategy is given by the QSPM (David,
David, & David, 2016).

Business research on Planet Fitness `
10 | P a g e
Strategy Formation
Strategy formation is the process in which the organization develops the new
innovative strategies and in this way company chooses the effective strategy to achieve its
new goals. Planet Fitness, being known for its judgment free zone philosophy, should provide
some additional adventurous facilities to its members like pool area, rock climbing zone,
cafeteria etc. these facilities can be proven beneficial for the market growth of the firm. In
additional, today Planet Fitness is the largest fitness brand in US, so now it should expand its
business in international market too. To penetrate the market there are three main
concentration strategies: (1) market penetration, (2) market development, and (product
development. An organization can adopt any one, two or all three strategies according to its
suitability to implementation (UMN, 2016). Planet Fitness is already providing the
franchises, in different states of United States of America, it will not be too difficult for
Planet Fitness to expand its brand value in international market therefore, Planet Fitness, can
use all three strategies to grow its business. Another strategy, Planet Fitness can implement
on, is providing essential training for the staff working in its outlets, in different cities, to
enhance the efficiency to perform their activities effectively (Blahova & Knapkova, 2011).
Strategic Action Plan
Strategic action plan is an over view of all the actions can be taken by the company to
implement its new strategies for the expansion or growth of its business in the near future.
Strategy goal Action Start time End time Duration
Expansion of
business in
Conduct a proper
study in different
June October 5 Months

Business research on Planet Fitness `
11 | P a g e
international
market
countries for
fitness demand
Selection of
countries for
business
expansion
November November 1 Month
Invitations for
franchised outlets
December December 1 Month
Distribution of
franchises
January January 1 Month
Inauguration of
stores
February March 2 Months
Introducing
different
products
Analyze the
demand for new
products in
different cities
April June 3 Months
Prioritize the
product according
to their demand
July July 1 Month