Bally Total Fitness (A): The Rise, 1962-2004 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bally Total Fitness (A): The Rise, 1962-2004
From a single, modest club in 1962, Bally Total Fitness had grown to become-in management's words-the "largest and only nationwide commercial operator of fitness centers" in the United States in 2004. Bally had faced its share of challenges, but the last couple of years had proven particularly difficult. Competition in its markets had intensified, Bally's stock price had collapsed, the company had restated earnings to the chagrin of shareholders, and the U.S. Securities and Exchange Commission had begun to investigate Bally's accounting procedures. Under the direction of Paul Toback, CEO since December 2002, Bally had revisited its unique approach to pricing and selling health-club memberships, boosted the accountability of club managers for profitability, launched new efforts to help club members meet weight-loss goals, altered its marketing message, and begun to strengthen its internal control systems. Toback and his team were committed to increasing the number of Bally members and maximizing revenue per member. Would Toback's efforts restore Bally's battered stock price, stave off companies that were rumored to want to buy the company, and enable Bally to remain a major player in the industry? A rewritten version of earlier cases.
Authors :: John R. Wells, Elizabeth A. Raabe, Gabriel Ellsworth
Swot Analysis of "Bally Total Fitness (A): The Rise, 1962-2004" written by John R. Wells, Elizabeth A. Raabe, Gabriel Ellsworth includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bally Bally's facing as an external strategic factors. Some of the topics covered in Bally Total Fitness (A): The Rise, 1962-2004 case study are - Strategic Management Strategies, Business models, Competition, Corporate communications, Customers, Financial management, Health, Motivating people and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Bally Total Fitness (A): The Rise, 1962-2004 casestudy better are - – challanges to central banks by blockchain based private currencies, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Bally Total Fitness (A): The Rise, 1962-2004
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bally Total Fitness (A): The Rise, 1962-2004 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bally Bally's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bally Bally's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Bally Total Fitness (A): The Rise, 1962-2004 can be done for the following purposes –
1. Strategic planning using facts provided in Bally Total Fitness (A): The Rise, 1962-2004 case study
2. Improving business portfolio management of Bally Bally's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bally Bally's
Strengths Bally Total Fitness (A): The Rise, 1962-2004 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bally Bally's in Bally Total Fitness (A): The Rise, 1962-2004 Harvard Business Review case study are -
High brand equity
– Bally Bally's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bally Bally's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Bally Bally's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Bally Total Fitness (A): The Rise, 1962-2004 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Bally Bally's is one of the leading recruiters in the industry. Managers in the Bally Total Fitness (A): The Rise, 1962-2004 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Bally Bally's in the sector have low bargaining power. Bally Total Fitness (A): The Rise, 1962-2004 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bally Bally's to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Bally Bally's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Bally Bally's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bally Bally's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Bally Bally's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Bally Bally's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Bally Bally's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Bally Total Fitness (A): The Rise, 1962-2004 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Bally Bally's is one of the most innovative firm in sector. Manager in Bally Total Fitness (A): The Rise, 1962-2004 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Strategy & Execution field
– Bally Bally's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Bally Bally's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Bally Bally's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bally Total Fitness (A): The Rise, 1962-2004 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Bally Total Fitness (A): The Rise, 1962-2004 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bally Total Fitness (A): The Rise, 1962-2004 are -
High cash cycle compare to competitors
Bally Bally's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bally Bally's supply chain. Even after few cautionary changes mentioned in the HBR case study - Bally Total Fitness (A): The Rise, 1962-2004, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bally Bally's vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Bally Bally's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bally Total Fitness (A): The Rise, 1962-2004, it seems that the employees of Bally Bally's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Products dominated business model
– Even though Bally Bally's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Bally Total Fitness (A): The Rise, 1962-2004 should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Bally Total Fitness (A): The Rise, 1962-2004 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Bally Total Fitness (A): The Rise, 1962-2004 can leverage the sales team experience to cultivate customer relationships as Bally Bally's is planning to shift buying processes online.
Need for greater diversity
– Bally Bally's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bally Bally's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bally Total Fitness (A): The Rise, 1962-2004 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Bally Bally's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Bally Bally's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Bally Bally's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bally Bally's to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Bally Bally's products
– To increase the profitability and margins on the products, Bally Bally's needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Bally Total Fitness (A): The Rise, 1962-2004 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Bally Total Fitness (A): The Rise, 1962-2004 are -
Using analytics as competitive advantage
– Bally Bally's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Bally Total Fitness (A): The Rise, 1962-2004 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bally Bally's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bally Bally's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Bally Bally's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Bally Bally's has opened avenues for new revenue streams for the organization in the industry. This can help Bally Bally's to build a more holistic ecosystem as suggested in the Bally Total Fitness (A): The Rise, 1962-2004 case study. Bally Bally's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Bally Bally's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bally Bally's is facing challenges because of the dominance of functional experts in the organization. Bally Total Fitness (A): The Rise, 1962-2004 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bally Bally's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bally Bally's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bally Bally's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Bally Total Fitness (A): The Rise, 1962-2004, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Bally Bally's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bally Total Fitness (A): The Rise, 1962-2004 suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Bally Bally's to increase its market reach. Bally Bally's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Developing new processes and practices
– Bally Bally's can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Bally Bally's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bally Bally's can use these opportunities to build new business models that can help the communities that Bally Bally's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Bally Total Fitness (A): The Rise, 1962-2004 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bally Total Fitness (A): The Rise, 1962-2004 are -
Shortening product life cycle
– it is one of the major threat that Bally Bally's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Bally Bally's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bally Bally's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Bally Total Fitness (A): The Rise, 1962-2004 .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Bally Bally's.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bally Total Fitness (A): The Rise, 1962-2004, Bally Bally's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Technology acceleration in Forth Industrial Revolution
– Bally Bally's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Bally Bally's needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bally Bally's in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bally Bally's in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Bally Bally's business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Bally Bally's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bally Bally's.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bally Bally's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bally Bally's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Bally Total Fitness (A): The Rise, 1962-2004 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Bally Total Fitness (A): The Rise, 1962-2004 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Bally Total Fitness (A): The Rise, 1962-2004 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Bally Total Fitness (A): The Rise, 1962-2004 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Bally Total Fitness (A): The Rise, 1962-2004 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bally Bally's needs to make to build a sustainable competitive advantage.