Gold's Gym Expansion to Asia

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GOLD’S GYM – PROPOSED EXPANSION TO ASIA

Table of contents

Page

1. Background of the company_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _04

2. PESTLS analysis and SWOT/5 Forces Analysis _ _ _ _ _ _ _ _ _ _05

3. Factor score analysis _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _17

4. Analysis of the cultures _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _18

5. Analysis of the market environment _ __ _ _ _ _ _ _ _ _ _ _ _ _21

6. Analysis of the market mix _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _26

7. Trade agreements and laws affecting the expansion _ _ _ _ _ _32

8. Market entry strategy and recommendations _ _ _ _ _ _ _ _ _ _36

9. Bibliography and References _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _39

PART 01 - Background of the company - GOLD's GYM

Gold's Gym International, Inc. is one of the largest fitness club chains in the world, one of few global players in a highly fragmented market. The company operates primarily through franchising. Gold's Gym claims 2.5 million members worldwide, and some 600 gyms found in 27 countries. The chain began with a single establishment, which became the center of the sport of bodybuilding in the United States.

Gold’s Gym earns income through franchising, operating company-owned gyms, and through selling apparel and accessories licensed with the Gold's logo. The company was founded by Joe Gold in 1965. Gold sold the company in 1970, and it changed hands several times since then. In 2004 the firm was acquired by the Texas-based investment group TRT Holdings.

The company increased its sales of accessories in the late 1980s. In 1988 it began selling its clothing at department stores and sporting goods stores as well as in its own franchises.

Gold’s Gym currently operates in almost all the states in US and a dominant player. It has operations in 20+ countries and wishes to expand to pursue aggressive growth.

Country Analysis and Selections

PART 02 - Political, Economic, Social, Technological and Legal Environment Analysis (PESTL Analysis)

As a part of its expansion strategy, Gold’s Gym has decided to increase its stronghold in Asia, which at present is limited to few countries. Asia presents a world of opportunities due to its large population as well as fast growth which has resulted in higher disposable income for the masses. We have screened 3 countries in Asia to move forward with its expansion plans. Due to global recession and financial constraints, Gold’s Gym cannot make investments all 3 countries hence, forced to select one country.

The countries in question are

• Singapore

• Malaysia

• Indonesia

We have adopted a scientific approach to analyze the countries. We used the following methodology to select the country best fits Gold’s Gym objective of into expanding to South East Asia. Following details out the method used to arrive at the selected country.

1. We have identified critical success factors for Gold’s Gym to succeed in each of the three countries.

2. We gave weightings for each factor based on the impact it could have on the success of this venture.

3. Afterwards, we grouped them factors in to the PESTL environmental analysis (Political, Economic, Social, Technological and Legal environments)

4. Using the chosen factors we analyzed each different type environment in all 3 countries concerned.

5. We arrived at a cumulative score for each type of environment and based our country score on that.

6. As supplementary analysis, we did an extension of the company’s SWOT analysis to the 3 countries concerned (not the base SWOT analysis).

7. There after we provided scores for each of the important factors based on the impact it could have on the success of the venture.

8. In addition, we did 5 forces analysis to comprehend the industry competitiveness of each of the 3 countries.

9. Using the results...
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