Mkt 421 Blue Ocean Strategy

Blue Ocean Strategy Paper
Gregory Newfield
MKT/421
October 13, 2014
Professor Ricci Rizzo MBA

Blue Ocean Strategy
The Blue Ocean Strategy focuses on the three industries that closely touch people’s lives. Areas they looked at were Autos, Computers and Movie and what companies within those fields are doing to managing sustainable profit and growth through the test of time. The creation of a blue ocean strategy places its focus on strategic moves to place their brand in position long past its rise to fame. Rather than focusing on creating a company and battling your competitor’s blue ocean strategy gears to forecasting innovations and products to make oceans of uncontested market space. (W. Kim, 2004) A product strategy
The gym and fitness industry is a mostly new industry in America and since the 1970’s/1980’s has had more than its fair share of failures as the innovations and offerings mixed with demand were not there. The importance of health and taking care of yourself as well as the eternal trend of looking good was a trend that was gaining strength and today has become a way of life (or you will have no life you will be dead). Gold’s gym which is credited for taking the fitness gym to the level of meeting a way of life in America that has now become a way of life. Insurance companies, doctors, social circles, advertisements, daily activities and stamina, and the demand of your own mother to exercise stay in shape, be healthy is a must. Your insurance companies, your employer, social circles even give discounts, benefits and incentives for those who enroll in gyms and health clubs. Today Gold’s gym has survived the revolving door of new gym clubs that come on the market and leave. Various fitness trends have made things such as cycling, weight lifting, yoga, kick boxing to launch sub-specialty industries who match the services and demand for health and fitness in huge industry. The estimated revenue of health clubs in the US being $25 Billion dollars a year, and an estimated database of over 48 Million members in America (1/8 of the total US Population) the industry
A onetime industry leader and attributed for making the health club business a chain group in the US is now all but dissolved and absorbed by larger and constantly redeveloping competitors such as LA Fitness and 24 Hour Fitness. The signature and staple business model may have been both the success and failure of the business. Offering multiple locations within the same network and multi-amenity locations that put them as an up and coming trend that cast a shadow of industry leader Gold’s Gym. The growing health clubs such as LA Fitness, and 24 Hour Fitness observed the success of Belly’s and began to open up locations with similar features, but at lower cost to members and offering the latest and greatest in programs, equipment and services. The blue ocean strategy that LA Fitness and 24 Hour fitness use of reading the trends and demands of members and following the strong national focus of fitness and health has allowed them to consume the once leading and fellow competitors growing their network and member base to levels never expected. With the industry being so new it’s hard to see if places such as LA Fitness and 24 Hour fitness will last the test of time is a question only time can answer. What I do know is that if they are executing an effective strategy of innovation versus the research and development and focusing on and competitor intelligence will show no advantage for