Competitive Position of the Organization - PDF

Virgin Active - Competitor
in fitness and well-being
sector

Table of Contents
INTRODUCTION...........................................................................................................................1
Background of the Company...........................................................................................................1
Competitive Advantage...................................................................................................................1
Competitive Position of the Organization........................................................................................5
RECOMMENDATIONS.................................................................................................................8
CONCLUSION................................................................................................................................8
........................................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business is the broader term when it is linked with the international market because there
are various factors affect the organization such as internal as well as external. So management
have to formulate various strategies in order to achieve their organisational goals & objectives. It
further helps in increase efficiency as well as effectiveness of the enterprises (Aquatic Exercise
Association, 2017). For the better understanding of this concept, this report selected Virgin
Active company which is a chain of health club. It is situated in 8 countries across the world and
it was founded in 1998 by Richard Branson. This report include various topics such as analytical
tools to measure competitive advantage and other business strategies. Along with this, it includes
PESTEL, SWOT and marketing analysis by using marketing mix. In addition, it includes
organizational functions such as marketing, finance, human resource along with some
recommendations.
Background of the Company
Virgin Active company provide the health and fitness related services to the customers
and it includes the health centers which provide gym equipment, tennis, sports activities,
training, spa, swimming pool etc. Company founded in 1998 in the United Kingdom by Richard
Branson and its headquarter situated in London, England. Currently, Virgin Active have their
operational activities in 8 countries where they have 45 health clubs in UK and 250 across the
globe. In total 8500 employees only in UK's health clubs and total 1.2 million members are
attached with Virgin Group (Virgin Active, 2019). Currently organization not offer franchise
options but its competitor that is Planet Fitness started a franchise group.
Competitive Advantage
PESTEL Analysis: It is an analytical tool which helps the organization to identify their
external factors which affect the organization in terms of productivity and profitability. By using
PESTEL analysis manager of Virgin Active identify the potential impact which impact the
operational activity of the company and it is discussed below:
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Illustration 1: PESTEL Analysis, 2019.
 Political: This factors include political stability, government rules & regulation, trade
policy, tax policy etc. Virgin Active follow all the government rules, regulation and
policies as per the nature of business (Bratton and Gold, 2017). In the Britain, this
company is most trusted brand where lots of customers buy their products and it has huge
influence. Government interference is not clear because of partnership with various
companies.
 Economic: This factor is majorly concern about profitability of the company because it
affect the economy and it includes inflation, interest rate, disposable income etc. Virgin
Active run their business through partnership and expand their business globally where
global recession affect the business. Fluctuation in local or international market also
affect the manager's decision making process.
 Social: It will influence by the society where they organization have to focus on different
culture, value, population etc. So Virgin Active have responsibility to serve quality
service to their customer on time. Because Virgin provide poor punctuality services
which they have to improve to address their customer's requirement on time.
 Technological: Change in the technology always affect the organization if they effective
adopt the technology then it is beneficial for the organization. If not, so they have to
survive in the market for the longer period (Chelladurai and Kerwin, 2018). Effective
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R&D helps the manager of Virgin Active to identify their clients needs and preference
which affect the demand and further impact the productivity or profitability.
 Environmental: It is an important factor which business has to consider to survive in the
market. Currently environmental concern will increase so manager of Virgin Active have
to ensure that business follow all the environmental laws in order to increase their
efficiency. Company have pressure from their competitors so they have to analyse the
impact before talking any decision.
 Legal: This factor include laws and regulation which is mandatory to follow otherwise
they have to face legal complications and government interference. So management
ensure that Virgin Active follow business related regulations such as employment act,
age discrimination, workplace safety etc. These regulation required to follow otherwise
government will interfere and take necessary action through fine or cancel the licences.
Above discussed analytical tool help the manager of Virgin Active to analyse factors
which affect the business. Manager will take their decision as per its impact which helps in
developing strategies in order to increase productivity or profitability. Along with this, it helps in
achieving business goals & objectives.
SWOT Analysis:
It is also one of the analytical tool which helps the organization to identify their internal
as well as external strength (Dockalikova and Klozikova, 2014). With the help of SWOT
analysis, manager identify strength, weakness, opportunity and threats. It further helps in
decisions making process which provide competitive advantage to the Virgin Active company
and it is discussed below:
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Illustration 2: SWOT Analysis, 2019.
Strength Weakness
 Virgin Active have strong brand name
in the UK and it is enough to promote
their products.
 Company use different methods of
distribution where they provide their
product in the retail stores and through
online mode.
 Virgin Active also using different way
to export their products in the
international market. First one is
international airports and second is two
big seaports.
 In the Virgin Active, there are different
department and each of them have
manager. So it is hard for the
organization to maintain coordination
and control all the activities.
 In the Virgin Active, there are lots of
communication gap which create
confusion and it further affect the
business operations.
 Due to poor punctuality in the
transportation affect the customer's
requirement and it will affect the
organizational growth in the market.
Opportunity Threats
 Company always ready to expand their
business through partnership with other
country's company (Hutson, 2013).
 In order to expand their reach to the
customers, manager develop strategy to
 Success of Virgin Active will be
depended on corporate parenting
strategy which is led by the Richard
Branson.
 They have to build long term strategy
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expand their business.
 Through expending their operational
activities, employees get the
opportunity to train or enhance their
skills.
 Virgin Active use high technology to
execute their services in order to make
people aware about their products.
 By using digital marketing platform to
promote their products will helps to
attract more customer in order to
achieve business goals & objectives.
in order to get success and achieve their
business goals & objectives.
 Virgin Active have to follow strong
leadership approach in order to
implement their business strategy in
effective manner.
 Develop long term policies and
strategies in order to give tough
competition to their competitors and
able to survive in the competitive
market (Hwang and Ng, 2013).
From the above discussion SWOT analysis help the organization as well as manager to
identify their strength as well as weakness. Manager of Virgin Active have to analyse these
opportunities & threats which further helps in developing strategies and decision making
process. By using PESTEL or SWOT analysis organization get the effective competitive
advantage in order to enhance their employees as well as operational performance. It is important
for the manager of Virgin Active to analyse these impact before developing any strategy.
Competitive Position of the Organization
Marketing Mix:
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Illustration 3: Marketing Mix, 2019.
Marketing Mix Details
Product Virgin Active provide the various health related services across the
worlds such as Clubs, Gyms and Spas. Customer's can find near by their
location. Currently there are 192 fitness club across the various countries.
Virgin Active have 1.2 million members and it will be 5035 member per
club on average basis.
Place Company currently distributed their services in the 8 countries where it
has 247 clubs. These countries includes UK, South Africa, Italy,
Australia, Singapore, Thailand, Botswana and Namibia. Highest club
situated in the South African country along with 715,000 members
(Kauerhof, 2017).
Price In order to increase their demand in the market organization have to
identify their willingness of customer to pay for a specific product &
services. They also ensure that price will be set after targeting their
customers such as VIP people or generate customers. Virgin Active use
cost effective price strategy where they provide membership at
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affordable price where cost of per month is $58. They also provide
different rage of membership for example: children, adults, old citizens
etc.
Promotion It is the most important strategy of the organization to boost their sales
through developing marketing strategy. Virgin Active promote their
products & services by using various methods. Such as online, paid,
affiliated, advertising on television, radio and using social median sites to
promote their services which is most effective to increase their sales and
profit margin.
Physical evidence Company using high quality equipment which they used in the Gym and
their clubs. It will helps the organisation to make their accessories more
attractive which develop a fun in the individual at the time taking their
classes regarding their health.
People Virgin Active have 45 clubs in the UK which have around 8500
employees. It is the fastest growing business of the Virgin Group which
have total 247 clubs across the globe (Malhotra and Malhotra, 2012).
Process Currently Virgin Active expand their business in the 8 countries where
they have total 247 clubs and highest clubs are in South Africa where
people are satisfied with their services.
Human resource management:
Objectives: Main objective of this company is to make exercise overpowering through
providing its members with the help of their fitness experts. They wanted to provide fastest
services to their members and become most valuable or known brand of fitness across the world.
Functions:
 Finance: In this department accountant manage have responsibility to record each and
every transaction which is related to the business operations. With the help of finance and
accounts functions, organization able to analyse their revenue and total expenses. It also
helps in analysing financial position of the Virgin Active (Tirunillai and Tellis, 2014). So
stakeholders can take further investment decisions by using various accounting
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techniques. Finance department also a source of funding for other functional departments
such as operations, marketing, human resources etc.
 Marketing: This department will helps in increasing sales through generating demand
among the market. Main role and responsibility of the company is develop promotional
strategy in order to increase sales and it will automatically increase the profit margin. In
context of Virgin Active, marketing manager have to build promotional strategy and for
the implementation business required funds from finance department.
 Human resources: Under the department of human resources, they have to done various
activities which help the Virgin Active company to achieve their business goals &
objectives. It will be don through increasing their staff members efficiency. Firstly they
have to hire skilled people who can provide best services to their customers. Such as
trained trainer for aerobic, yoga and for further exercise in the gym (Yang and Jiang-
yang, 2013). These people will contribute to satisfy their customer along with this, they
also required some training on regular basis that how to handle equipments and carry out
according to the individual.
RECOMMENDATIONS
Virgin Active is the well known brand of the worlds in the fitness industry where they
have to maintain their activities in order to increase their reach to the members. Company have
to hire professionals of this filed who can effectively trained individual. Human resources
department have to enhance their recruiting process and it will be included more physical test. To
increase their members they have to develop more effective or powerful marketing strategy
which attract more people. They have to offer various discount to their new or existing members
in order to attract or increase their customers loyalty. In addition, they have to done various
social care activities such as conduct a health campaign where they teach various exercise to
become healthy & fit for longer time. It is a kind of CSR activities which is contribution for the
society as well as it provide longer benefits through attracting new members for their club.
CONCLUSION
From the above discussion it has been concluded that, every organization required to
done competitive analysis through various analytical tools such as PESTEL or SWOT. It helps
the manager to analyse internal as well as external factors and its impact on the production and
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profit margin. In addition, by using various marketing strategy organization analyse their
position and also identify the requirement of further improvement. With the help of marketing
mix strategy, management evaluate various aspects such as product, price, place, promotion,
people, process or physical evidence. With the help of various analysis organization able to
done their competitive analysis in order to increase their organizational efficiency or
effectiveness. It will further helps in achieving business goals & objectives which provide huge
market growth.
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REFERENCES
Books and journals:
Aquatic Exercise Association, 2017. Aquatic fitness professional manual. Human Kinetics.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Chelladurai, P. and Kerwin, S., 2018. Human resource management in sport and recreation.
Human Kinetics.
Dockalikova, I. and Klozikova, J., 2014, November. MCDM Methods in Practice: Determining
the Significance of PESTEL Analysis Criteria. In European Conference on
Management, Leadership & Governance (p. 418). Academic Conferences International
Limited.
Hutson, D. J., 2013. “Your body is your business card”: Bodily capital and health authority in the
fitness industry. Social science & medicine. 90. pp.63-71.
Hwang, B. G. and Ng, W. J., 2013. Project management knowledge and skills for green
construction: Overcoming challenges. International Journal of Project Management.
31(2). pp.272-284.
Kauerhof, A., 2017. Strategies for Autonomous, Connected and Smart Mobility in the
Automotive Industry. A Comparative Analysis of BMW Group and Tesla Motors Inc.
GRIN Publishing.
Malhotra, N. K. and Malhotra, N. K., 2012. Basic marketing research: Integration of social
media. Boston: Pearson.
Tirunillai, S. and Tellis, G. J., 2014. Mining marketing meaning from online chatter: Strategic
brand analysis of big data using latent dirichlet allocation. Journal of Marketing
Research. 51(4). pp.463-479.
Yang, Y. and Jiang-yang, Y. U., 2013. Study on Suspension Mechanism of China Fitness Market
[J]. Journal of Guangzhou Sport University. 3.
Online
Virgin Active. 2019. [Online]. Available Through:
<https://www.virginactive.com/index.html>
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