BM561 Business Consulting: PureGym's Market Analysis and Key Issues

This business consulting report analyzes PureGym Limited, a UK-based gym chain, to identify key challenges it faces in the market. The report uses frameworks like PESTEL analysis, Porter's Five Forces, and STP approach to assess the external environment, competitive landscape, and target market. It highlights issues such as government pressure to lower membership costs due to rising obesity, increasing competition from other fitness providers, and the need for new equipment upgrades. The report concludes that PureGym must develop effective strategies to address these challenges and maintain its competitive edge while staying true to its mission of providing affordable fitness access. Desklib provides access to similar reports and solved assignments for students.

BM561 Business
Consulting

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Clarify who your client is and summarise the problem that they are facing..........................3
Competitors, target customers, market and influencing factors from the external
environment............................................................................................................................3
The top three issues that the client is facing..........................................................................6
CONCLUSION..........................................................................................................................6
REFERENCES...........................................................................................................................7
Books and Journals:...............................................................................................................7

INTRODUCTION
This report aims to analyse the problem of a client project. That means it is the
research report which is based on the client's problem. The client in this report is PureGym
Limited. It is a chain of no-frills health club that is based in West Yorkshire with headquarter
in Leeds (Algar, 2021). It is identified that PureGym is founded in 2008 and provides low-
cost and high-quality facilities for physical fitness. This report will include the analysis of the
client's problem and after that analyse of the influencing factors from the external
environment that provides a direct or indirect impact on the client's problem. It will also
discuss the analysis of competitors and target customer market so that company can find the
top 3 issues.
MAIN BODY
Clarify who your client is and summarise the problem that they are facing
PureGym is the client of this report. It was owned by CC MP capital and other
investors privately and they have offices and London and South Hampton. It is identified that
this gym is found to be one of the largest chains of the gym in Britain including approximate
one registered member (Mardones and et.al., 2020). Still they are facing a problem in the
market because every day there are many factors that affect the gym. According to the
counting it is found that in 2021 the gym become the largest operator in the UK with more
than 1 million numbers and 307 gems. But because of the pandemic situation and other
factors, they are facing a problem in running their gym in the market. The pandemic is not a
single reason for the slowdown of the gym as there are many more factors which can be
better understood with the help of analysing of the influencing factors.
Competitors, target customers, market and influencing factors from the external environment
For more understanding of the problem of the client, it becomes very important to
analyse the competitors, influencing factors and target customers and market so that company
is able to identify what is the main problem and found the related solution accordingly. It
becomes necessary to use appropriate models and frameworks which helps to make the
analysis easier (Aitchison, 2020). So the prepared model is used below which helps an
individual is able to identify and analyse the problem of the company in a more effective
way.
PESTEL Analysis

PESTEL analysis includes 6 important factors from the external environment that
generally provided a direct or indirect impact on the organisation's success and growth. It
becomes necessary to understand for the organisation that every day the complexity of the
business environment is increasing because of its dynamic nature. So that's why it is
necessary to analyse these factors which are mentioned below by PureGym:
 Political factor: In this factor, the companies are facing political forces due to the
government and it becomes necessary for the PureGym to analyse the political factors
so that they are able to run their business in an effective way. It is identified that
government make pressure on gyms because of an increasing obesity crisis to stop the
increasing number and this is the reason that they do this by pressurising gyms to
lower membership costs (Edmondson and et.al., 2022). It becomes a problem for
PureGym as they already offer a low membership price as which reduces the profit
margin.
 Economic factors: Economic factors include all the factors that are affected by the
economic growth of the country. Because of the pandemic situation, the economic
situation of every country has become very poor and this is the main reason that it
provided a direct impact on the profitability of PureGym. They are facing a problem
of economic instability.
 Social factors: Social factors include the ageing population which is found to be more
than 10 million people in the UK that are each 65. It is expected to double in the next
30 years. So it becomes very important for the PureGym to evolve the facilities for
senior members so that they can also join the gym which gives them an upper hand
over competitors.
 Technological factors: Technology factors are provided with a negative impact on
PureGym because there are many machines are requirements are found necessary to
be implemented in the gym if they want to survive in the competitive market.
 Legal factors: There are less legal factors found in this industry that provides a
negative impact on the company.
 Ecological factors: Ecological factor includes the factors in which it becomes
necessary for the gym to do sustainable business so that they can develop
sustainability in the environment.
Porter’s Five Forces Model

With the help of Porter's 5 forces model, the PureGym is able to analyse the
competitive environment. It included 5 important forces that need to be analysed by the
company in order to find the problems. Competition is analysed with the help of this
framework. The analysis is also mentioned in below points:
 The threat of new entrants includes the new entry of organisations in travel and leisure
which brings innovation and they make pressure on the gym with the help of lowering
their pricing strategy.
 The bargaining power of suppliers is found to be high and it makes a domain position
that decreases the margins of PureGym.
 Buyers' bargaining power is also pressurizing the PureGym which affects the
profitability of the gym industry in long run (Noack, 2020). Buyers want to get the
best offers by paying minimum prices which becomes very difficult for the gym to
satisfy.
 The threat of substitutes in the industries continuously increasing because there are
many services and other similar products are found that offers a value proposition in a
unique way.
 It is identified that the competition in this industry is very high and the top
competitors of PureGym include David Lloyd, The Gym, and Gymbox. These are
important competitors of the PureGym and they are all together raising their revenue
per year.
STP Approach
It is necessary to analyse the market of the fitness industry which can be possible with
the help of the STP approach.
 Segmentation: It is identified that PureGym segmented their market on the basis of
democratic factors in which they give priority to income and age level. Segmentation
helps them to reduce the complexity of reaching the market.
 Targeting: It is founded the target audience of the gym is 18 to 34-year-old people.
They're focused on these age people so that they are able to get healthy.
 Positioning: For the purpose of positioning the company is work done idea that didn't
need to develop the physical fitness of people according to the requirements including
low cost so that anyone can afford their services (Schroff, 2020). In addition to this,

they also use social listening tools in order to analyse fitness conversations. In this
way, they are giving a reason to the customers to join their gym.
The top three issues that the client is facing
After analysing the market, competitors and influencing factors from the external
environment, there are some issues found that are faced by PureGym. The top three issues are
mentioned below according to the rank which shows the intensity of issues:
 In the analysis of political factors, it is analysed that company is facing a problem of
pressure provided by the government. Due to the obesity rise, the Government
employment a plan where they reduce the membership prices of the gym so that every
person is able to get interested in fitness. It makes pressure to reduce the prices of
membership which is already done by PureGym but due to this, they are facing an
issue of low margin.
 It is identified and analysed that competition is continuously increasing in this
industry and it makes pressure on PureGym to make effective strategies that help to
overcome the competition. But it increases the expenses for the gym which directly
impacts the aim of PureGym as they want to provide easy and affordable access to
services so that people are able to get a healthier life (Wilson-Nash, Goode and
Currie, 2020). It becomes an issue that how they can deal with competition and
expenses of the company.
 New types of equipment have also become an issue for PureGym because it increases
the expenses and they are not able to afford that which reduces the chances to gain a
competitive advantage.
CONCLUSION
It can be concluded from the above discussion that every day the competition in the
Fitness industry increases and it becomes necessary for gyms to make write a strategy in
order to survive in the market. This report included an example of a Gym organisation which
included an analysis of their problem. It also included important frameworks that help them
to analyse a problem in a more effective manner.

REFERENCES
Books and Journals:
Aitchison, J., 2020. When will gyms reopen in Scotland and what changes will be in
place?. Irvine Times (Irvine, Scotland), pp.NA-NA.
Algar, R., 2021. The Fitness Industry in the United Kingdom. In The Global Private Health
& Fitness Business: A Marketing Perspective (pp. 5-14). Emerald Publishing
Limited.
Edmondson, L., and et.al., 2022. COVID-19 and the Sport Sector. In Routledge Handbook of
Sport and COVID-19 (pp. 10-22). Routledge.
Mardones, J.I., and et.al., 2020. Unraveling the Karenia selliformis complex with the
description of a non-gymnodimine producing Patagonian phylotype. Harmful
Algae, 98, p.101892.
Noack, M., 2020. The gym group private equity challenge–group F company and market
overview (Doctoral dissertation).
Schroff, J.L., 2020. The gym group private equity challenge–group F capital structure,
financial forecast & LBO, returns, exit strategy and due dilligence (Doctoral
dissertation).
Wilson-Nash, C., Goode, A. and Currie, A., 2020. Introducing the socialbot: a novel
touchpoint along the young adult customer journey. European Journal of Marketing.