Core Fitness
CORE FITNESS
Summary
Core Fitness is a fitness facilities and equipment provider, operating in Central Pennsylvania. After finding that refurbishing and resale of fitness equipment to home gyms could be a lucrative business, the company decided to seriously look at it as a business. Further to this, Core is now discussing a proposal to reclaim and refurbish unused and unwanted exercise equipment as a complimentary service for their health clubs. Sandy Knight feels that this proposal could allow the company to maintain its business while also providing reasonably priced equipment to its customers. The partners also discuss acquiring land and expansion of business. 1. What is your evaluation of the carious proposals by the partners of Core Fitness and Fitness Retreads? What challenges and issues do they face? What factors in the current environment favor their proposal activities?
The proposals address environmental and economic concerns by reclaiming equipment that would otherwise be put in landfills and by providing customers with reasonable priced equipment. The proposal to expand reverse supply chain could potentially lead to market cannibalization. To avoid this, the company should first consider expanding the reverse supply chain outside its primary business’ target and geographic regions.
The second proposal talks about purchase or lease of facilities to expand the business. The partners have two options – to either purchase a large facility or to lease one. They should start by leasing a facility and as the business grows, they can look at owning facilities. This will give the company more flexibility with respect to cash flow and liquidity in investments. The main challenges faced by the company are conflicting markets and finding land.
2. What other suggestions would you make for expanding Fitness Retreads? Why?
The company can tie up with and/ or outsource work to other companies. Since Core does not have a lot of experience in the
Summary
Core Fitness is a fitness facilities and equipment provider, operating in Central Pennsylvania. After finding that refurbishing and resale of fitness equipment to home gyms could be a lucrative business, the company decided to seriously look at it as a business. Further to this, Core is now discussing a proposal to reclaim and refurbish unused and unwanted exercise equipment as a complimentary service for their health clubs. Sandy Knight feels that this proposal could allow the company to maintain its business while also providing reasonably priced equipment to its customers. The partners also discuss acquiring land and expansion of business. 1. What is your evaluation of the carious proposals by the partners of Core Fitness and Fitness Retreads? What challenges and issues do they face? What factors in the current environment favor their proposal activities?
The proposals address environmental and economic concerns by reclaiming equipment that would otherwise be put in landfills and by providing customers with reasonable priced equipment. The proposal to expand reverse supply chain could potentially lead to market cannibalization. To avoid this, the company should first consider expanding the reverse supply chain outside its primary business’ target and geographic regions.
The second proposal talks about purchase or lease of facilities to expand the business. The partners have two options – to either purchase a large facility or to lease one. They should start by leasing a facility and as the business grows, they can look at owning facilities. This will give the company more flexibility with respect to cash flow and liquidity in investments. The main challenges faced by the company are conflicting markets and finding land.
2. What other suggestions would you make for expanding Fitness Retreads? Why?
The company can tie up with and/ or outsource work to other companies. Since Core does not have a lot of experience in the