Detailed Situation Analysis Report on Gymshark's Business Strategy

This report provides a comprehensive situation analysis of Gymshark, a prominent player in the fitness apparel market. It begins by defining Gymshark's value propositions, core brand values, and buyer behavior, highlighting the company's focus on quality, community, and online presence. The analysis then delves into the micro-environment, examining the company, suppliers, intermediaries, public, customers, and competitors. Following this, the macro-environment is explored, considering demographic, economic, natural, political, technological, and cultural factors influencing Gymshark's operations. Finally, a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is presented, summarizing the company's internal and external factors. The report concludes with a summary of the key findings, emphasizing the importance of situation analysis in strategic decision-making and business growth.

Situation Analysis

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Task 1- Explain value propositions, core brand values and buyer behaviour.............................1
Task 2- Analyse micro-environment...........................................................................................2
Task 3- Analyse macro environment..........................................................................................3
Task 4- List strengths, weaknesses, opportunities and threats ...................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
An organization operates in a particular business scenario wherein variety of situations is
faced by it. These must be analysed for making expansion plans to tap and explore growth
opportunities. In this, the potential markets should be identified where new products can be
launched or new business can be started (Clarke, Friese & Washburn, (2016). All these require
application of various analysis for finding capabilities to survive in the new market. In this
report, Gymshark has been chosen which has its headquarters in Solihull, United Kingdom.
Furthermore, this assignment covers value propositions, core brand values and buyer behaviour,
analysis of micro and macro environment factors affecting the business and using SWOT
analysis for identifying strengths, weaknesses, opportunities and threats.
MAIN BODY
Task 1- Explain value propositions, core brand values and buyer behaviour
Value proposition can be referred to as a promise made by the company to be delivered to
its customers by making products or service accordingly. It is a statement or declaration about
the brand sold by the organizations. Gymshark is a successful company which has gained huge
recognition in different corners of the world. It has value proposition which is providing quality
in the products being manufactured by it. Furthermore, it is also focused on making contribution
to the society for their betterment. It is planning to expand the market by opening more than 100
international online stores (Welch & VanHoose, (2012).
Core brand values refer to practices or efforts of the organizations for connecting with
large number of targetted audience. It helps in building a strong and healthy relationships with
customers and make it different from its rivals. Gymshark has values for taking the individuals
together by making them work in a combined form and fulfil the visions of the company.
Furthermore, to make products with a combination of art and engineering comprising features
that are future conscious as Gymshark believes in future. Also, it is here to bring ideas which are
in consistent with its visions. These all work simultaneously in order to achieve the goals and
objectives.
Buyer behaviour refers to the study about the perceptions of people towards the products
of a specific entity. In this, decision making process of a customer is examined and evaluated so
as to know the pattern followed for choosing items or services available in the market. By
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looking at the past records, Gymshark has been able to capture market at great extent through the
strategies and plans formulated by it. On analysing the behaviour of buyers, it has been obtained
that people particularly belonging to the millennial category and active on social media are
attracted to the products of Gymshark. Moreover, it persuade the customers through social media
as people find the products of this brand unique and different from its competitors. Also, young
generation are becoming more relied on online shopping so this is the reason why it started as
online site. By encouraging the youth to involve in the company, it can see that consumers buy
products of Gymshark on repetitive basis. Hence, the quality and services provided it are able to
fulfil the expectations of buyers. Along with this, this brand is popular among those who are into
sports, gym, or similar activities as the clothes provide comfort and fitness which are always in
high demand (Lyubareva, Benghozi & Fidele, (2014).
Task 2- Analyse micro-environment
Micro-environment analysis refers to evaluation of various factors which have the
capabilities to influence the operations, performance an decision making. The people involved in
this are stakeholders who are important for the company. Hence, an analysis has been conducted
regarding this, which is as follows:
Company- Gymshark was established in the year 2012 in textile industry of UK and
gained recognition on social networks. The strategies and policies made by it had the motive to
attract large number of customers online and connect with them. This made it become successful
in a short span of time which increased its turnover to 40.5million in 2017. This shows that, it
holds a strong position in the market and giving tough competition to its rivals.
Suppliers- A supplier refers to an individual or business engaged in the business of
providing raw material to another organizations for converting them into final outputs. Any
hurdle from the side of suppliers have huge impact on the activities of production. In the context
of Gymshark, it manufacturers the products by using own material due to which the costs are
kept minimum resulting to low prices of final products (Osterwalder and et. al., (2014).
Intermediaries- These are the people or businesses which are treated as the connection
between two parties. In other words, any third party who is acts as a link in order to finalise a
deal is known as intermediary. With reference to Gymshark, the whole business is managed by
Gymshark only through online as it does not have any third person in between. This saves a lot
of costs which ultimately assist in providing the products at the price people are willing to pay.
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Public- This is the general public which are interested in the business of the company
directly as well as indirectly. Resources used in organizations are of the people living in the
society and in order to carry the business, entities are required to return the favour. Gymshark is
growing at a fast pace as well as it is planning to open more than 100 international online outlets.
This means that it has created jobs for individuals in more than one country as human capital is
required for smooth functioning of online platform.
Customers- These are the buyers to whom goods or services are produced and sold at a
price which has been fixed by the entity. It is for the purpose of earning profit and make
increased sales. Gymshark has made huge turnover in less than a decade which is the result of
higher sales and profit. This is because of implementation of effective strategies for attracting the
customers. With this existing buyers made the company reach a revenue of $128m in 2018.
Competitors- A rival is a person or business which has business in the same or similar
industry or selling products which can be substituted with that of other organizations. Since,
Gymshark is a successful company and giving tough competition to other entities. Therefore, it
has number of rivals such as Aesthetic Revolution, Nike, Addidas etc. and Under Armour being
the top competition for Gymshark.
Task 3- Analyse macro environment
Factors which are external and beyond the control of organizations are know as macro
environment. These are equally significant for businesses as it includes variety of forces ranging
from political to legal. It has been conducted in the context of Gymshark which is provided
below:
Demographic- It is the features of the people belonging to a particular area and are
categorised into factors like age, race, income and many more. It is very important to consider
these basis for formulating strategies and plans of expansion. In the context of Gymshark, the
main target for its new plan is millennial. It does not want to shift from this criteria as these are
the people who are young and more inclined to gym and fitness club (Craig & Campbell, (2012).
Economic- These factors include interest rate, tax rates, wages, inflation, recession, boom
etc. It is crucial from the point of view of investment as businesses often consider the market
which has the stability in the economy. Gymshark has analysed the potential of online business
as there is less fluctuations in such organizations. Furthermore, the tax rates also get reduced
with this.
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Natural- This factor of macro business environment is about the nature in which
organizations carry their businesses. From last few years, the level of global warming and release
of harmful gases have been increased due to growth in industrialisation. Hence, Gymshark uses
processes and techniques by which emission of CO2 gases can be minimised. This is the
initiative taken by it.
Political- These factors which are governed through policies made by the government.
There is always interference of federal and it covers foreign trade policy, trade restrictions,
competition regulations and laws and many more. Business revolve around these factors and
with regard to Gymshark, it has always complied with rules and regulations so that it does not
get pressurised. It consider the restrictions imposed by the government in case of transporting the
goods from one place to another.
Technological- This is about the advancement or development taking place within the
technologies that are being used by organizations. Gymshark is aware about the condition of the
environment as well as the market and competition. In order to remain competitive and at top
position, it is considering to use those technology which are loaded with features that can make
the production speedy (Pîndiche & Ionita, (2013).
Cultural factors- These factors revolve around the lifestyle, values and attitudes of the
people living in the country. In the context of Gymshark, the reason for expanding the business is
to promote “athleisure trend” in different countries. This is the recent practice that has gained
recognition and became popular among it target customers. By considering this, it will be
producing the products which can fulfil the expectations of customers.
With the application of marketing theory, it can identify more about the target market by
focusing on basic concepts of marketing. Furthermore, these theories can be applied within a
particular area and make decision making accordingly.
Task 4- List strengths, weaknesses, opportunities and threats
SWOT is an analysis which is used by organizations for identifying strengths,
weaknesses, opportunities and threats in the prevailing market conditions. The information
gathered from this in respect of Gymshark has been provided below:
Strengths
 Its brand name is recognised in many
different nations of the world.
Weaknesses
 It has to make huge investment for its
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 The strategies and plans have made it
gain success due to which it made
strong position in the market.
 It has competitive advantage by
proving in less than a decade.
future plans.
 Stakeholders have huge demand which
the company may not be able to fulfil
leading to loss of business.
 No access to outside suppliers who may
provide raw material at much low
prices.
Opportunities
 There are companies who ready to
collaborate with Gymshark.
 Higher market potential for the
business in textile industry throughout
the world.
Threats
 There are huge number of competitors
who are also doing well in the business.
 Large number of people still believe
and prefer traditional shopping from
physical stores.
CONCLUSION
From the above report, it has been concluded that, situation analysis is about examining
the existing as well as potential market for the purpose of making decisions. This helps the
organizations in making decisions regarding expanding the business. Companies may choose to
increase the market share either through development of new product or start business in new
places. This is helpful in achieving the growth by which sales and profit can be increased. Hence,
analysis should be done for getting the accurate information which can be used for decision
making.
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REFERENCES
Books & Journals:
Clarke, A. E., Friese, C., & Washburn, R. (2016). Situational analysis in practice: Mapping
research with grounded theory. Routledge.
Welch, B., & VanHoose, D. (2012). U.S. Patent Application No. 13/166,934.
Lyubareva, I., Benghozi, P. J., & Fidele, T. (2014). Online business models in creative
industries: Diversity and structure. International Studies of Management &
Organization, 44(4), 43-62.
Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2014). Value proposition design: How
to create products and services customers want. John Wiley & Sons.
Craig, T., & Campbell, D. (2012). Organisations and the business environment. Routledge.
Pîndiche, E., & Ionita, R. (2013). The influence of micro and macro environment components on
trade companies in romania. Journal of knowledge Management, Economics and
information Technology, 9, 327-337.
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