Business Environment of PureGym: Organizational Structure and Strategic Objectives

This paper discusses the business environment of PureGym, including its organizational structure, strengths and weaknesses, and strategic objectives. The company is a chain of fitness centers and gyms in the UK, with a flexible organizational structure and a contemporary management approach.

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STUDENT NAME
NAME OF THE INSTITUTE

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Table of Contents
Introduction........................................................................................................................................... 3
Task 1: Organizational Introduction............................................................................................. 3
Task 2: Organizational structure.................................................................................................... 4
Task 3: Modern management approach....................................................................................... 5
Task 4: Two innovative strategic management objectives....................................................6
Conclusion.............................................................................................................................................. 8
References.............................................................................................................................................. 9
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Introduction
The health and fitness industry is competitive industry in UK. There are players from
both organized and unorganized sector (Ferrand & Robinson, 2010). For any company to operate
in this sector, it is important to adequately analyze the internal and external environmental
factors. The objective of this paper is to discuss the business environment of PureGym. The
paper discusses the background of the company, its organizational structure, strengths and
weakness. The paper also discusses the key strategic objectives for the company. It is important
that the management of the company should have a vision in place so that it can achieve its goals
and objectives.
Task 1: Organizational Introduction
PureGym is a private limited company that was founded in the year 2009. The company
is a chain of fitness center and gyms in UK. PureGym is the largest gym in the country in terms
of membership. It has close to 450,00 members. The company has close to 180 gyms in the
country and it has the plan to increase the count to 300 by 2020. The company operates in the
health club industry and this industry is a booming industry in the country (De Lyon & Neville,
2017). The management of the company realizes the fact that health enthusiasm has increased
among the people and it is expected that the demand of gyms would further increase. The
number of membership in the gyms has seen a phenomenal growth of more than 10%. One of the
unique things about PureGYm is that it operates 24 hours a day. People can come anytime and
do cardio and other exercise. In terms of facilities it does not provide any swimming pool
facilities and this is considered as one of the weakness of the company. Peter Roberts founded
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PureGym and the expansion plan of the company looks positive. There have been some
expansion plans about the company from merger and acquisition. In May 2015, PureGym said
they are close to buying their UK rival LA Fitness for around £60 million to £80 million. The
industry is highly competitive in nature and the good thing about the industry is that it is not
saturated. There is a scope of multiple players to co-exist.
Task 2: Organizational structure
Generally, organization would have the horizontal organizational structure or a vertical
organizational structure (Mullins, 2016). PurGym has a very flexible or horizontal organizational
structure. The company has only three levels of hierarchy within the system. It helps the senior
management to manage the employees and the organization in an effective manner. The three
levels of PureGym organizational structure can be shown as:
Senior
Management
(CXO's)
Branch/ GYM
Head
Branch
Executives Staff
Function
Head
Marketing Finance
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As shown in the above diagram, the leaders and senior managers have established a very
lean and flexible organization structure. The objective behind this structure is ease and
efficiency. The leaders want to have a structure in place where the employees can reach out to
senior managers without any apprehensions. The current organizational structure of PureGym is
effective and people understand their roles and responsibilities. There is a proper of chain of
command and it is expected that people would follow this chain of command. The second level
or the level of branch or gym head is given freedom to recruit branch executives and staff
members. With this freedom, the senior leaders have to ensure that the customer experience
remains the same as they mover from one gym to another. To ensure this, leaders have different
function heads (De Lyon & Neville, 2017). One such head is training and development head that
is responsible to ensure that all the training needs of people are meet. The management ensures
that adequate training is provided to the new and the existing employees.
Task 3: Modern management approach
The management of PureGym believes in contemporary style of management. The
company use systems theory of modern management. The system theory is an interesting theory
that could help organizations to analyze and overcome number of internal problems. The system
theory is typically based on the way organization, as a unit, is defined. Under system theory,
there is open system theory and closed system theory. The advocates of system theory suggest
that in the contemporary business environment, organizations should focus on open system
theory. Simply defined, a system that interfaces and interacts with its environment, by receiving
inputs from and delivering outputs to the outside, is called an open system (Robbins & Judge,
2014).
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There are various evidences that suggest that PureGym uses system theory and especially
open system theory. For example, the management of the company strongly believes that
benchmarking is a powerful tool that can help organizations to move forward. This is one of the
reasons that company has kept its door open to learn from the experiences of other companies in
the same industry. The management and the decision makers of the company also realize the fact
that it can learn a lot from its internal and external stakeholders. With time, PureGym has
established a very open and flexible culture where the management appreciates the viewpoint of
different people. It has helped the organization to develop an effective culture where
organization can grow and sustain (Johnson & Whittington, 2014). The open systems theory has
also helped the organization to get the best learning from external entities.
Task 4: Two innovative strategic management objectives
The strategic management objectives of any organization should be based on the analysis
of the internal and external environment. There are various tools to assess the internal and the
external environment of the company and business. SWOT analysis is a powerful tool that is
used by organizations to assess their internal and external environment (Knutsen & Brock,
2014). Within this framework, Strengths and Weaknesses are internal in nature and
Opportunities and Threats are external in nature. The SWOT matrix for PureGym can be
discussed as:
STRENGTHS
The strong foothold of PureGym in the country
is its biggest strength
The company has got some of the best experts
WEAKNESSES
The company lacks to ability to maintain
continuous profit.
The profit margins of the company is low as
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from the industry (Lloyd & Payne. 2013)
PureGym has established its centers across the
premium locations in the country
compared to industry average
The management has to deal with employee
engagement issue
THREATS
The threat from the competition is the biggest
threat
The company also faces threat from the
external environment and external factors like
political, social, economical, environmental,
etc.
OPPORTUNITIES
The biggest opportunity for PureGym lies in
the untapped market
The health enthusiasm has increased among the
people
The company can also focus on online gym
sessions through its mobile application
Based on the above SWOT analysis, two strategic management objectives of PureGym
would be:
Objective 1: Increase the market share in the country by 10% every year for next three years
This objective would ensure that the company is able to take the advantage of increased
market size. It would mean that the company should not be a laggard and in fact it should be an
early adaptor.
Objective 2: To use latest tools and technologies to reach out to consumers
The prime target audience of PureGym is millennial who have a good presence on social
media platforms. The attention span of millennial are less and it is important that the
organization should use the latest tools like Facebook and Internet marketing to reach out to its
targeted audience.
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To achieve the above strategic objectives, the management could use the SMART
framework to break down the objectives in terms of specific and measurable goals. It would
ensure that company could track its progress against these strategic objectives (Drafke &
Murtaugh, 2009). It is also important that the leaders must communicate the objectives to various
stakeholders in the organization.
Conclusion
The above paper discusses the business environment of PureGym. The market is
competitive in nature; however, the good thing for the company is that the market is not
saturated. The paper also discusses the strengths and weakness of the company and based on the
above analysis, it is recommended that the company must have a plan to manage its weaknesses.
There lies a huge opportunity to take a market chunk and at the same time, the opportunity also
exists to increase the market size. It is expected that the company would continue to grow in
future and the prospects looks positive.
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References
De Lyon, A.T., Neville, R.D. and Armour, K.M., 2017. The role of fitness professionals in
public health: a review of the literature.
Quest,
69(3), pp.313-330.
Drafke., M., and Murtaugh.,J. (2009) The Human Side of Organizations 10th ed., FT Prentice
Hall
Ferrand, A., Robinson, L. and Valette-Florence, P., 2010. The intention-to-repurchase paradox:
A case of the health and fitness industry.
Journal of Sport Management,
24(1), pp.83-105.
Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnér, P. (2014).
Exploring Strategy:
Text And Cases. 10th edn Harlow : Pearson
Knutsen, W., & Brock, K. (2014). Introductory essay: From a closed system to an open system:
A parallel critical review of the intellectual trajectories of publicness and
nonprofitness. Voluntas: International Journal Of Voluntary & Nonprofit Organizations, 25(5),
1113-1131
Lloyd, C. and Payne, J., 2013. Changing job roles in the Norwegian and UK fitness industry: in
search of national institutional effects.
Work, employment and society,
27(1), pp.3-20.
Mullins L. J..(2016)
Management and Organisational Behaviour 11edn., Harlow: Pearson
Robbins., S., P. and Judge., T., A. (2014) Essentials of Organizational Behaviour 12th edn. FT
Prentice Hall Vandeveer, R. and Menefee, M. (2010),
Human Behavior in Organizations 4th
edn., FT Prentice Hall
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