Strategic Management Analysis of Gymshark: Case Study

This report provides a strategic management analysis of Gymshark, an online gym apparel company. It covers an analysis of the internal and external environment, including PESTLE and SWOT analysis. The report also includes recommendations for enhancing market positioning.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of Corporation.................................................................................................................1
Environmental Analysis...................................................................................................................2
PESTLE Analysis...................................................................................................................2
SWOT Analysis......................................................................................................................3
Porter's Five Forces..........................................................................................................................5
Marketing Strategy...........................................................................................................................6
Internal Issues..................................................................................................................................9
CONCLUSION................................................................................................................................9
RECOMMENDATIONS...............................................................................................................10
BCG Matrix..........................................................................................................................10
REFERENCES..............................................................................................................................12
Gymshark Case Study..........................................................................................................13

INTRODUCTION
Strategic management can be referred to as the process of analysing the internal as well
as external environment in order to devise a distinct business strategy. Now, the course of actions
that are being formulated by business with a purpose of attaining competitive edge within the
market place is referred to as business strategy (Pröllochs and Feuerriegel, 2020). Generally, it
provides a route map which is being undertaken by firms for reaching their objectives along with
goals in peculiar time frame. Corporate strategies render guidance to firms across the world to
have leverage in context of opportunities that are being furnished by business environment in
which services are being delivered. An effectively crafted and implemented strategy tends to act
as an enhanced opportunity through which firm can enhance their overall functionalities.
The project seeks to carry out strategic management analysis based on Gymshark, an
online gym apparel company by way of a case study approach. This report covers an analysis of
the environment in which goods are being delivered by organisation that is both internal as well
as external through which relevant opportunities along with threats can be identified. In addition
to this, insight will be provided into industrial analysis with respect to the firm. Lastly, some
recommendations are provided with the help of which organisation can enhance its market
positioning.
Overview of Corporation
Gymshark is a well renowned online wellness attire brand began by Ben Francis all
together of secondary school companions. The corporation offers different items for people, for
example, tank top, shirt, pant, hoodie, shorts, tight, stringer and so on. The organization is
viewed as the most quickly developing as well as biggest brand inside exercise centre attire
within the bounds of United Kingdom. Gymshark provides its high quality offerings within the
bounds of 177 nations over the global periphery (Rafiq, Naz and Maqbool, 2020). Since the very
beginning, the business association has witnessed impeccable development and constantly
increasing base of customers. Gymshark is associated with various popular Instagrammer,
YouTuber and blogger by providing support to them supporting them in terms of sponsorship.
The entity possesses an internet based following of 30 million individuals across the globe. The
gym apparel brand focuses over leveraging ambassadors along with fitness influencer to build a
strong social media standing in the hyper competitive world.
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Environmental Analysis
Business environment can be referred to as the composite of internal as well as external
factors that tend to possess influence over the functionality of a business. It is important for a
corporation to constantly screen the business environment in order to identify the issues that
prevail within its confines (Wenzel, Stanske and Lieberman, 2020). Thus, this allows the
company to undertake steps, plans or course of action with the help of which it can deal with the
consequences in an effective manner. Business environmental analysis deals with external as
well as internal examination through the application of strategic management models and
theories in an effectual way. Now, Gymshark is an online sports apparel company functioning
within the bounds of United Kingdom. The top management of this firm realises the significance
of examining the business environment. Thus, it has decided to make use of certain models for
external and internal screening. In this relation, PESTLE analysis is conducted to portray the
findings related to external environment and SWOT is applied to gain knowledge of the different
aspects linked with internal environment of the company. Both the frameworks are discussed in a
detailed manner as follows:-
PESTLE Analysis
This is an external environment screening framework which is applied by organisations to
identify the probable opportunities as well as threats. This model is applied by Gymshark as
follows:-
Element Description Opportunity and/or Threat
Political This defines the extent of
government intervention in
the functionality of
company.
 Impact of Brexit negatively impacts upon
import of products.
 Interest of government in promoting
sports apparel brands such as Gymshark.
 Adherence to international trade
restrictions and tariffs.
Economical This element lays down the
extent of development of
the economy of a country.
 Impact of economy of countries on sale of
leisure products.
 Strong economies will facilitate increased
number of gym memberships, thereby
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increasing the demand of gym apparel
sold by Gymshark.
Social This element is concerned
with values, beliefs, norms,
traditions & preferences
held by the people of any
nation.
 Interest of people towards products of
Gymshark on social media.
 High average income of key demographic
sections for Gymshark will enhance sales
of company.
 Sponsorship of social media influencers or
fitness athletes helps to create awareness
about the gym apparel brand.
Technological This aspect defines the
magnitude of development
of a country in relation to
the domain of technology.
 Artificial intelligence, Smartphone
Commerce, Wearable technology and chat
bots present opportunities for Gymshark
to enhance its market share and sales.
Legal This is related to the laws
and legislation pertinent to a
nation which is applicable
to companies which are
functioning within the
country.
 Maintaining awareness of design patents
of rival firms to avoid getting involved in
legal issues.
 Written contracts to be maintained with
sponsored athletes.
Environment This element is concerned
with the initiatives taken by
company to operate in the
interests of environment.
 Environmental friendly packing will help
to gain praise from government as well as
customers.
 Use of organic materials to colour or
weave fabrics.
SWOT Analysis
This is a strategic management framework applied by the organisations across the world for the
purpose of gaining an insight into the internal environment of the corporation. This provides
assistance to the organisation in acquainting it with the opportunities, strengths, weaknesses and
threats. The top management of respective sports apparel brand realises the significance of taking
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into account the internal environment in order to identify the discrepancies that need to be dealt
with in a timely manner along with the opportunities that can be tapped by the entity in near
future. SWOT analysis has been conducted by Gymshark as follows:-
Strengths Weaknesses
 Gymshark is engaged in outsourcing
within the bounds of China and
consequently, thus possessing extensive
haggling capacity to identify and tap a
suitable provider who can provide
materials at low pricing.
 Financial exchanges done hereby by
opting for the method of NEFT are
rapid (Lim, Jee and De Run, 2020).
 The internet promotion of Gymshark is
successfully carried out by way of
eminent web based life influencers.
 Gymshark possesses solid web based
standing which renders aid to it in
capturing the attention of public at
large.
 The company provides exercise centre
attire on sensible costing as opposed to
its rivals that renders aid in picking up
the consideration of every single
financial area of society.
 Gymshark does not have its own mobile
app.
 Import cost gets added to the overall
cost of company’s operations owing to
outsourcing inside the bounds of China.
 The substitution effect gets raised
because of similarity in product line
with companies like Nike, Athleta,
Physiq Apparel, etc.
 The organisation is deficient of
technological initiatives and efforts like
AI, wearables, chatbot and so on.
Opportunities Threats
 Technology presents opportunity in
front of Gymshark to upgrade its
market positioning and appeal to the
customers in a better manner.
 The high extent of rivalry in sports
apparel industry pose risk of loss of
market share along with product
substitution to the firm.
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 Gymshark has the potential as well as
the resources to come up with mobile
app and thereby capture the attention of
large customer base.
 The entity has the opportunity to tap
into new markets in order to expand its
global market share.
 This entity can open its physical stores
to gain the attention of larger audience
base and thereby increase its gains in
upcoming future.
 Gymshark can introduce wearables to
appeal to the audience which is moved
by this technology.
 Lack of technological initiatives may
shift the customers from Gymshark to
other rival firms pertinent to the same
industry.
Porter's Five Forces
This is an industrial analysis framework which is put to use by companies for the purpose
of gaining knowledge of the extent of rivalry prevailing within a particular corporate sector
(Bratton and Boak, 2020). The analysis done within this framework leads to attainment of
knowledge regarding the top market players and the extent of threat posed by them to the
existence as well as functionality of a firm. In this relation, it has been identified that it is
important for Gymshark to do the analysis of sports apparel industry in order to identify the
threats linked to the concerned sector. Thus, the Porter’s Five Force analysis of Gymshark is
presented below:-
Element Power Description
Threat of
New
Entrants
High The extent of this force in context of sports apparel industry is
acknowledged to be high. This is because it is easy for
organisations to setup venture in this sector. Furthermore, the
legal regulations to carry out business within this industry are
quite liberal. In addition to this, the marketing as well as branding
processes through social media marketing are quite easy to be
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conducted by new firms to capture the attention of people in
market place. This creates the threat of new entrants for
Gymshark.
Threat of
Substitutes
High The magnitude of this aspect is recognised to be high due to the
presence of top notch players like Under Armour, Nike, and
Adidas in the market place which deals in similar product line.
This tends to cause threat of substitution for Gymshark, creating
risk of loss of market share for the company.
Competitive
Rivalry
High The intensity of competition within the bounds of sports apparel
industry is quite high owing to the presence of firms like Adidas,
Nike, FP Movement, Style Runner, etc. which pose direct
competition to Gymshark, creating risk of loss of share to the
company.
Bargaining
Power of
Suppliers
Low The power of this element is acknowledged to be low within the
bounds of sports apparel sector. This owes to the large quantum
of vendors pertinent to this industry which provides Gymshark
with the option to switch to other organisation in case it finds that
a supplier is providing low quality materials or providing
materials at high rates.
Bargaining
Power of
Buyers
High The bargaining power held by the purchasers within the confines
of sports apparel sector is high. This is so because the switching
cost for the customers within this market is quite low. Thus,
customers being rational decision makers can shift to those
brands which can provide with same product at lower price.
Marketing Strategy
Marketing strategy proves to be an essential as well as crucial aspect for an organisation in
which there are required to target group of consumers to offer their services and products among
them to gain profitable advantages. In this, elements like segmentation, targeting and positioning
act as foundation stone that facilitate an organisation to check efficient marketing strategy. This
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framework assess entity to effectively formulate marketing communication strategy as well as
plan through which they can influence target consumer base by interacting them in effective
manner (Hill, Schilling and Jones, 2020). In context to gymshark entity manager is undertaking
use of STP model in order to target consumers by taking advantage of optimum strategy to make
significant improvement in their market position.
STP
Segmentation: In this entity target their customers on certain set of parameters, after this
they select one factor criteria according to their marketing strategy in order to offer their product
and services with an aim to gain maximum advantage. It has been identified that a market can be
segmented as per according to for basic criteria which are further beings find below:
Demographics: In this entity can segment market according to different attribute and
characteristics relating to ethnicity, age, material status, income, education level occupation,
population and more.
Psychographics: Within this entity duly segment their market as per according to attitude,
hobbies of individuals, lifestyle and personality traits.
Behavioural: In this company can segment market according to consumer behaviour
characteristics that involve factors like brand loyalty, distribution channel, consumer reaction
towards marketing, purchasing behaviour of consumers etc.
Geographic: It is an essential component in which an organisation target market on the basis of
state, country, city etc. It not allows them to offer their product and services to consumers but
also facilitate them to accomplish their marketing objectives. In accordance with this Gymshark
duly formulated a marketing strategy in which they characterized the demographic structure by
targeting consumers on the basis of their age group of 18 to 25 years. It has been identified that
individual of this age are mainly tend towards health care, music, fashion fitness thus, this group
of consumers can targeted with efficient use of marketing strategy through which company can
accomplish their objectives effectively.
Targeting: In this organisation engage in the process of targeting a particular market
segment as per according to the earlier stage of STP. In this entity effectively characterize their
customers in order to further develop suitable as well as effective marketing strategy in order to
accomplish their business goals in a well define and efficient manner. In relation to this
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Gymshark duly selected certain group of consumers and target them on different bases by taking
assistance of differentiated marketing strategy which is further been defined below:
Consumer Aspect Description
Age 18 to 25 years
Gender Male & Female
Occupation White Collar, Senior/Junior Executive, Junior Managerial
position
Income Level Annual Income of SGD $25,000-50,000
Consumer Values  Fun loving
 Health conscious
 Fitness and music loving
Positioning: In this entity is required to position their product or services in a selected
market segment among consumers in order to accomplish their sales objectives (Crawshaw,
Budhwar and Davis, 2020). In relation to this Gymshark duly developed and design a
comfortable workout with an aim to satisfy customers with high quality product. Along with it
has been evaluated that company is offering wide range of women as well as men clothing that
further allow them to ensure maximum attention from customers.
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Figure 1: Positioning Map of Gymshark
Internal Issues
There are number of internal issues that can have direct or indirect impact upon company
performance, profitability and productivity. In context to this, gymshark is required have aware
about some certain form of internal issues those who are having capability to affect their brand
performance (Coen and Vannoni, 2020). In addition to this company should aware themselves
with the latest trend, technology that other essential factor in same sector. Along with this, entity
must engage themselves in continuous market research, it has been identified that company is
facing lack of innovative and technological initiatives like Smartphone commerce, AI, wearable,
technology and high-tech software in their business process which is posing many issues in front
of company to become market leader in the segment of gym apparel. This is also affecting their
overall sales and profitability in number of ways.
CONCLUSION
It can be concluded that, business strategy assist organisation within gaining enhanced
competitive advantage with reference to their competitors. The route map is formulated that
assists entity within accomplishment of their goals by addressing preferences of their probable
customers as per desired standards and in stipulated time frame (Bailey, Pitelis and Tomlinson,
2020). Through the examination of internal and external environment, firm can acknowledge the
working environment and accordingly formulate strategies that will assist them within
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maintaining quality standards as well as meet them within formulated duration or even before
that. This will enable to have enhanced form of strategies which can ensure them to have
sustainable growth. There exists wide range of frameworks that are used for internal and external
analysis. This provides aid to the organisation in relation to identification of their opportunities
and threats which can have relevant impact on their functionalities. Furthermore, strategies can
be developed, applied and implemented in the organisation accordingly.
RECOMMENDATIONS
BCG Matrix
BCG matrix is a strategic tool that an organisation can use in order to evaluate strategic
position of brand portfolio along with their potential (Certo, Kalm and LePine, 2020). This
framework elaborates and define business portfolio according to industry attractiveness as well
as competitive position. Further it has been evaluated that, with the help of this an entity can
effectively able to acquire information on knowledge of brand that further aid entity to make
their investment. In accordance with this, BCG metrics allow Gymshark to undertake knowledge
related to their investment in accessories segment while associate other segments of product
portfolio.
As per the analysis done above over the strategic management of Gymshark, it has been
identified that there is a scope of improvement in the company and its different domains. In this
relation, certain suggestions have been provided to the firm. As per according to the evaluation it
has been identified that marketing is a crucial and most important activity that are required to be
considered by an organisation as it not only assist them to influence interest of maximum number
of individual but also allows them to enhance their market share holding along with brand
performance in respective industrial sector. It further assist organisation to undertake advantage
of different type of opportunities like wearable technology, artificial intelligence, chat bots,
Smartphone commerce and more. It has been identified that gym apparel industry is having their
competitor in the name of Style Runner, Nike, Athleta, FP Movement and Adidas those who
with the use of aggressive marketing create number of threat elements upon company
sustainability. In this it is essential for entity top management that they should engage in the
process of innovation and uniqueness in their production process with the use of high technology
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in order to differentiate their offerings from other and enhance their sales profitability in a
maximum rate.
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REFERENCES
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Bailey, D., Pitelis, C. and Tomlinson, P.R., 2020. Strategic management and regional industrial
strategy: cross-fertilization to mutual advantage. Regional Studies, 54(5), pp.647-659.
Coen, D. and Vannoni, M., 2020. The strategic management of government affairs in
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as a Strategic Management System tool to Improve Sustainable Development: Measuring
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Bratton, J. and Boak, G., 2020. STRATEGIC MANAGEMENT, INNOVATION AND
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APPENDIX
Gymshark Case Study
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