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JGR 300 Case Study – BJ’s House of Fitness: A Business on the Ropes…
JGR 300 Case Study – BJ’s House of Fitness: A Business on the Ropes
Barry’s landlord doubled the
rent on the gym’s location, citing higher city property taxes, national
brands moving into the Cherry Street business district, and gentrification in the neighborhood.
A national chain of
fitness centers, Pump It! Gyms®, have opened a location three blocks from
BJ’s House Of Fitness. Their equipment and facilities are brand new and state-of-the-art. Pump
It! has blanketed the neighborhood in marketing and promotional offers. Pump It! memberships
cost $55 with a $34.99 joining fee and an annual “service” fee of $18.99. Late payment or
denied credit cards incur a $120 billing fee.
Barry’s new sign-ups have been flat. He notices most of the new members are drawn from the
affluent young professionals moving to the neighborhood. Comments from the newer members
have been mostly negative:
he’s received complaints about cleanliness, broken equipment, and
a lack of exercise class options. Barry has lost approximately 50% of new members since the
start of the year and his online rating has fallen from 4.5 to 2.5 stars.
Barry has verbally encouraged
his staff to clean better and engage in proactive customer
service. Requests to his staff have not been followed up with training, written performance
goals, or performance-based bonuses. Staff have responded with increased absenteeism and
low morale. One longtime employee recently quit, citing the lack of pay raise and a higher cost
of living in the neighborhood.
It hasn’t been all bad news for Barry. The biggest local paper featured a glowing profile of BJ’s
House Of Fitness, including a professionally-shot photo spread. The photographer, a
neighborhood resident, has approached Barry about using the photographs for promotional
materials. The newspaper profile also attracted the attention of a local documentary filmmaker,
who wants to make a short film about Barry’s life as a bodybuilder and the quirky regulars at the
gym.
Recently, Barry was approached by another national gym chain, 4 Minute Fitness, about
rebranding BJ’s House Of Fitness as a 4 Minute Fitness franchise location. Barry would have to
pay hefty franchise fees and give 50% of revenue to 4 Minute Fitness. In exchange, 4 Minute.
Fitness can connect Barry to business financing and centralized billing and
scheduling software
to streamline his operation.
Nationally, U.S. economic growth has slowed but the $27.6 billion gym and health club sector is
continuing to grow. The newly-released Pittsburgh City Economic Report notes continuing
population growth of 1.5%, fueled by young, college-educated workers moving to the city for its
rising tech sector and low cost of living.
With his reserve funds rapidly draining from the increased rent, Barry fears he may have to
close BJ’s House Of Fitness unless changes are made, and fast.
Assignment 3: BJ’s House of Fitness: A Business on the Ropes
Due Week 9 and worth 170 points.
Introduction
You have been learning about all the different tools you have to meet challenges and to both manage and make changes to improve your business. Now it is time to put it all together and make a plan to save an organization!
For this assignment, read Case Study – BJ’s House of Fitness: A Business on the Ropes.
BJ’s House of Fitness is strugglingand may be in a fight for its very survival. Think about the challenges and changes the business is facing. What does it need to do to become competitive? How would you turn challenges into opportunities? It is up to you to find solutions!
Instructions
You will be developing and formatting your paper for this assignment without a template.
Describe the challenges the organization is going through.
Explain why the challenges are occurring.
Explain the approach you would use to find a solution.
Assess the following organizational aspects (address some of these in your response):
What aspects of the business are working?
What’s not working?
What are the organization’s goals and priorities?
Are they still valid or do they need to change?
Evaluate staff performance.
Is each individual pulling their weight?
Does Barry need to hire or reduce staff?
Does he need to train or retrain employees?
Evaluate available resources (people, time, money).
Does Barry need to reallocate resources?
If yes, how?
Identify who you would ask for advice on this process and explain why.
Identify the opportunities in this situation.
Assess the situation and recommend changes you want to make at the organization. Are they in line with the organization’s values, mission, and vision?
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