Introduction For California Fitness Centre

California Fitness is a wholly owned subsidiary of 24 Hour Fitness, Worldwide

which has over 400 clubs serving more than 3 million members. The first California

Fitness club was established in 1996 in the business district of Hong Kong. Currently,

there are 25 clubs.

“Energy is a lot like love - the more you give, the more you get back. At

California Fitness, we’ve made it our mission to help you live better through

fitness. And although exercise isn’t the only way to live better, having more

energy, being stronger, feeling fitter and looking trimmer is a pretty good

start!” The above phase is taken from the vision of the company.

The mission of the company is to help members live better through California Fitness.

The company offers members the opportunity to experience the most innovative and

largest number of Group exercise classes in the region as well as providing highly

professional Personal Training from the largest group of Personal Trainers in the

region. In addition to the state-of-the-art cardio & resistance equipment, members can

enjoy sauna & steam facilities, plus free internet via the in-club. California also has

clubs with a swimming pool in Hong Kong, Taiwan and Malaysia providing all club

members access.

Beginning in 2005, California Fitness further differentiated its business by partnering

with two fitness superstars, Jackie Chan and Yao Ming, to create signature clubs in

the region. There are a total of 6 California Fitness-Jackie Chan Sport in Asia and 2

California Fitness-Yao Ming Sport in mainland China.

After all, California Fitness sparked the Asian fitness revolution in Asia over 10 years

ago with our large scale and well equipped health club concept. Today, with 25 clubs

throughout China, Hong Kong, Malaysia, Singapore and Taiwan and as a wholly

owned subsidiary of 24 Hour Fitness Worldwide "www.24hourfitness.com", over 3

million members are running, spinning, pumping, dancing, laughing and stretching

their way to better health...and better lives.

Introduction to California Fitness father- 24 Hour Fitness Centre

Founded in 1983 as a one-club operation in San Leandro, Calif., 24 Hour Fitness has

grown to become a global fitness leader. Over the past 25 years, 24 Hour Fitness has

built or opened more clubs in the United States than any other privately-owned fitness

club chain. The company is widely credited with changing the industry landscape by

introducing a variety of innovations, including extended hours and month-to-month

memberships.

In 2004, 24 Hour Fitness became the first official fitness center sponsor of the United

States Olympic team. The sponsorship grants memberships to selected U.S. Olympic

hopefuls and includes upgrades to various U.S. Olympic Training Centers across the

country. The first facility renovated was Colorado Springs, Colo., followed by Lake

Placid, N.Y. and Chula Vista, Calif. In 2008, 24 Hour Fitness team members will help

our athletes prepare for the Beijing Summer Olympic Games in a state-of-the-art

High-Performance Training Center at Beijing Normal University

The forming of first California Fitness

Country: Hong Kong

Structure: Joint Venture

Industry: Health and fitness club chain

Background

Ray Wilson, founder of Family Fitness, the largest fitness chain in Southern

California (now called 24 Hour Fitness), had completed a series of trips to Asia, wher

he determined there was a potential to expand the Family Fitness concept.

Challenge

Although Mr. Wilson thought that the Asian market held potential for American-style

health and fitness centers, he lacked specific knowledge of the Asian cities and

countries and had no contacts with the markets for the raising of capital and the

securing of local partners.

Solution

BrandAmerica devised a plan to launch an upscale version of the type of “pure

fitness” facility that Mr. Wilson had successfully developed in Southern California in

Asia.

The plan coupled Mr. Wilson’s concept, the operating capabilities of Eric Levine, Mr.

Wilson's partner and Operations Executive, with a real estate development and

management company, owned by a large Asian Financial group. A joint venture was

formed to develop the first fitness centers in Asia, under the name "California

Fitness." With the real estate expertise and funding brought by the Asian partner, the

first site secured for development was in the most popular entertainment district next

to the central business district in Hong Kong.

Result

California Fitness became an overnight success, generating revenues that were more

than five times the most optimistic projections. The cash flow that came from the first

unit propelled the rapid development of a second unit and so on. Less than two and a

half years after the first unit opened, the business consisted of four very successful

units, three in Hong Kong and one in Singapore, with a forth unit near completion. At

that point the partners accepted a US$ 41.5 million buyout proposal, which brought

the owners a gain many times the value of their US$ 5 million investment.

Task Environment

There are four type of task environment:

a) competitors

b) suppliers

c) customers

d) distributors

Competitors

All organization from services to product organization will surely have one or two

and even thousand of competitors. Competitors are other organizations that produce

similar goods and services. Competition of product between competitors is the most

important forces that will determine the success and failure of a business.

In terms to the Competitor of Californian fitness centre, we can easy to find that

almost all different brands fitness canters are competitors with each other, because

they are substitutes. The services of Californian fitness centre can be offered in place

of another, most of them are competitors.

Example1: Back in Motion Chiropractic Centre

Clark Hatch Fitness Center

Day Thermos - Gym & sauna

These 3 fitness centres above are Malaysia native fitness centre brands, comparing

with the international centre; they have both advantages and disadvantages. Firstly, as

a native brand, local centre has more flexible form that adapts to the native habit than

the international one, they knew natives well, so some local people think it is more

suitable to their tastes and choose the native centre. Turning to disadvantages,

obviously, for native fitness center, there is no a very strongly brand effect in the

world like international one. As well as we know, Jackie Chan is the image

spokesman of Californian fitness centre, and he is a super star all over the world, but

there are few top star for Malaysia native fitness centre who can carry the company.

Example2: Jiva Yoga Studio

Yoga Zone Studio

To name just a few, these 2 studios are Yoga health centre. It is obviously to see they

are pointed fitness centre, the most important sport item that they serve is yoga,

so they can focus on a particular group of people’s needs. For example, in modern

society, more and more office ladies (OL) give importance on their body care, but

comparing with some active sport, they’d rather choose some quietly sport like yoga,

so this type of fitness center is more suitable to them, they can get what they need

there. However, on the other hand, they cannot provide variety selections like

Californian fitness centre, so they cannot get the biggest consumers like

Californian fitness centre, because the group of customers is narrow, but they still

can share some consumers from the traditional fitness center.

Example 3: Celebrity Fitness Centre

Fitness First

Fitness Concept

As for these 3 fitness centers are non local, international brand. These brands can

be founded at many foreign countries. These brands will impose a greater threat

as a more competitive opponent. These strong brands have a greater access to

capital compared to the local gym or fitness centre. As for California Fitness

Centre, we also have a strong company supporting us at the back. Results from

large economic of scale, strong brand loyalty of California fitness Centre, differentiate

California Fitness with others brands. As a result, California Fitness Centre is Ranked

No. 1 in the Fitness Centre Category, for the second year running, California Fitness,

has successfully secured a top 10% ranking in the prestigious Asia’s Top 1000 Brands

Survey compiled by Media Portfolio.

Suppliers

Normally suppliers are well known in the term of organizations that produce materials

and products. But in some in some industry suppliers also provide financial and labor

input for other organization. As for California fitness centre, they have suppliers from

many areas. From a common tower and t-shirt to a more complicated item like

modern software for registration, and gym equipments. Below is one of an example of

supplier for California fitness centre.

For example, Technogym is a manufacturer of fitness equipment based in

Gambettola, Italy. It was founded in 1983 by Nerio Alessandri and now it is the world

leader in the fitness and rehabilitation equipment fields. There are a lot of Branches

all over the world, such as the UK, USA, Japan, China, and Germany etc. More than

20,000 fitness centre use its product, because they are professional and safety product,

from the Sydney Olympic Game in 2000, Technogym is the only one supplier is

recognized by Olympic Games. The field of products in this company is very broad,

not only for the Fitness centre, including Home fitness, Medical and health, Public

equipment in the park and so on. Technogym is one of the most important Partners in

Supply Chain of Californian fitness centre.

Californian fitness centre wants to extend their own field on fitness, so they not

only use some reliable equipment, but also develop their own brand to use in their

fitness centre. Some of sports equipments that they adopt are their own product; it is

good for the development of their company.

Besides above, there are some others Partners in Supply Chain of Californian

fitness centre, such as Life Fitness, Startrac, Maxicam and so on. All of them are

famous brands in the world. They are also reliable supplier, can offer high quality

equipment to Californian fitness centre.

California Fitness Centre tends to have many suppliers for its product as the

organization can get the lowest price for the highest quality of the product from

suppliers. Morever, to ensure the steady flow of supply, the application of e-business

techniques also being adopted and used by the company to deal with suppliers.

Customers

Organizations and companies are existed to meet the requirement and needs of

customers. Without customers, there won’t be any organization form to operate until

now. Customers can also be defined as people who buy the goods or services and then

consume or use them.

Customer: production and purchase of products or services for groups and individuals.

Including individual consumers, businesses, government agencies, educational

institutions and so on.

Organization: Customer is the God, is to organize the sources of profits and income,

to provide customers with high-value products or services that are high-performance

organizations pursue.

The impact of the supply's ability to negotiate price bargaining factors: the

concentration of the buyer (buy capacity), the number of the seller, the buyer's

switching costs, the buyer, such as backward integration. ? Management strategy: to

provide customers with the high delivered value of the product or service.

What comes to mind when you think of fitness centre, some may think as a place

for exercise, some may even think it as a place for relaxing after a hard day of work,

and some may even think it as a place for fun. As a result, fitness centers can have

several groups of customers such as working class, teenagers, elders and even people

with family. Apart from that with the increasing of customers demands, California

Fitness Centre tends to provide a series of services, activities and equipment to cater

the needs for different groups of customers. For example, California Fitness Centre in

Mid Valley offers

Outdoor Swimming Pool Energy Studio Fly Wheels Studio

Chill Out Studio Female only Gym Area Cardio Machines Resistance Machines Free Weights Xpress Zone Kick Fit Area Steam & Sauna Outdoor Jacuzzi

The above services and facilities are the most common one. Some California fitness

centre offer more than the above to cater the different needs for customers. Due to

different geographical factors, some California fitness centre offer aerobic studio,

tanning bed, private training room, babysitting services and others special services.

Distributors

Distribute can helped organize the sales organization to the consumer product or

service organizations and individuals. On the impact of organizations: the impact of

organized marketing capabilities and product brand image. ? Affected distributors the

ability to negotiate price bargaining factors: the number of distributors, geographic

distribution, size, organization prior to the degree of integration. ? Management

strategy: the need for distributors to establish a good relationship between suppliers,

distributors limit the ability to negotiate price bargaining.

As for California Fitness Centre which offers services instead product, the

organization can’t use distributors like Wal-Mart, Retail Shop and others normal

distributors that distribute product to distribute our services. Normally our distributors

are of the Non-profit or charity organization and government campaign. When we

sponsor in an event held by government or charity(non profit) organization, they will

help us to promote our services and distribute some of our goodies for the people.

General Environment

There is 5 type of general environment

a) Technology Forces

b) Demographic Forces

c) Socio cultural Forces

d) Political and Legal Forces

e) Economic Forces

Technology

By now, it's obvious we're pretty serious about fitness. After all, California Fitness

sparked the Asian fitness revolution in Asia over 10 years ago with our large scale

and well equipped health club concept. Today, with 24 clubs throughout China, Hong

Kong, Malaysia, Singapore and Taiwan and as a wholly owned subsidiary of 24 Hour

Fitness Worldwide ( www.24hourfitness.com), the leading privately owned and

operated global fitness center chain in North America with more than 3 million

members are running, spinning, pumping, dancing, laughing and stretching their way

to better health...and better lives.

Before we start with exercise equipment, California fitness is a health club first and

as a result, facilities like steam rooms, saunas and studios. This is to foster the general

health and well being of the cutomers. This shows our initial commitement to

embracing health technology to better serve our customers and remain competitive.

A fitness centre like the California fitness centre being in the industry that it is

depends a lot on the type and quality of equipment it has. Apart from the standard

equipment used in gyms for a long time like Dum bells, Bar Bell Weights, Jump ropes

etc, to stay relevant in the business the acquisition of advanced equipment that utilize

complex technology becomes a necessity. These vital equipment, the backbone of our

operations, are ensured to be of the highest quality and the latest technology to keep

abreast of the world.

As a result of this, the advance of technology means the invention and application of

new inventions for usage in gyms and fitness centres all over the world. These

equipment could include but are not limited to Treadmills, Rowing Machines,

Treadclimbers, Exercise bikes, Cross trainers, hydraulic equipment, protective

equipment such as a back brace etc (Sprague,2007).

This means one of the most important influences of the gym business model is the

need to keep up with quickly changing technology. As this directly influences the

class and quality of equipment provided by your business and consequently the class

of service you are able to offer to customers which in turn determines the success

and/or failure, in the long run of your organization.

Statistics have shown that the success of failure of most gyms in the first six months

of it's operation and then in the long term depends, on a large part on the quality of the

equipment (Shields, 2003). This means that technology is one of the main forces

influencing the environment of California fitness centre.

Another aspect of the use of technology not yet mentioned is the smart registration.

This is an advance in technology enabling easier use for the consumer and

convenience for the company.

Here, the systemized registration system is a software frame work developed

specifically for use in fitness centres such as ours. It involves the issuance of smart

cards which are the membership cards that show and track a customer's movements

and activity within the facility. The accepted member is first issued a smart card. This

card contains his information such as age, height, weight etc. Also, after consulting

with the personal trainer, it can also contain his training regime which includes the

number of work outs per week, the facilities to be used and in what order, the length

of his usage etc. Also it enables the customer to track his performance online as the

results can be accessed from anywhere through the gym's website.

Another important aspect of this system is the ability of the customer to ascertain

how much calories he is burning. This enables him to find out whether and how

effective his exercise is while silmultaneously giving a general picture of his health.

Apart from all those benefits, it enables the customer to find out the state of his

payments. This also means that the payment structure is flexible as a customer can

now pay only for the particular services he uses since his membership card tracks the

facilities used and the duration.

This synthesis of health, financial and fitness information provided by the smart card

registration system all in all makes the visiting and usage of the gym a breeze for both

consumer and company. Another advantage is the non labour intensive nature of the

venture makes the running of the gym less costly in the long run reducing costs and

increasing the profit margins. The usablilty of the system also attracts many cutomers

hwo are swayed by it's sheer convenience and ease of use.

Demographic

Trying to determine how much demographics influences the business of California

fitness centre, first you have to look at the various aspects of demographics.

The first aspect involves age. With the population divided into various age groups

and each age group with it's individual nuances and preferences. Therefore, the

customers of the California fitness centre are not uniformly aged. Depending on the

age demographic pursued- Old, Teens, Middles aged, Family, the customer base will

be skewered towards one group or another. The general gym population in most

countries is mostly made up of men in their mid twenties (Margetts, 2008).

The second aspect of Demographic involves sex. As the majority of most gym goers

in most countries' are male, a country which has a significantly larger population of

women and a lower number of males aged in their mid twenties would see a lower

number of gym goers than usual. In this way, the sex influences the fitness centre.

This leads to a push in advertising to women in such countries.

In a lot of countries, especially in the third world (Africa,Some parts of Asia and

South America), attending a gym is seen as a luxury only a few of the elite in that

country could afford. This therefore significantly influences the fitness centre as the

general income and standard of living of a country determines the number of

customers.

Also, this includes the employment and hence the unemployment ratio in a country.

As the more people with no jobs especially during times of economic hardship find

that they cannot afford the expense of a gym.

The gym also could choose to cater to certain overlooked demographics such as the

disabled. This is done by providing the gym with disabled specific exercise

equipment. In this way, this demographic forces the fitness centre to change their

approach and try to adapt their facilities for use of this specialized demographic.

Here, depending on the demographic served, you see the distribution of income. With

the family favoured membership contributing to the income of the establishment.

Another demographic though interwining is race and religion. Certain religions such

as Islam especially in countries such as Pakistan, Saudi Arabia , Yemen etc that

subscribe to the fundamental version of that faith, women - a major demographic in

other countries are not allowed to attend such establishments as gyms and as a result

the fitness centre will see almost non existent business from that sex. This necessitates

in these countries the establishment of separate sections for men and women to train

and as a result the problems issued by that demographic is solved.

Social Cultural

In Malaysia, healthy, wellness and fitness are currently the trend for most Malaysian

citizens. As a result, more and more fitness centre, gym and health care centre are

starting to pop out in Malaysia. This constitutes an opportunity for California fitness

centre to start a business at Malaysia. Nowadays, many new symptoms and diseases

start spread wildly results of unhealthy lifestyle of people especially the working class

people who just go to work all day long, eat fast food, lack of doing exercise. As a

result from that symptom like obesity are commonly found in Malaysia. To avoid

such symptom people tend to go to gym or fitness centre to work out and exercise

regularly. Some Malaysian female tend to go to fitness centre more often than male as

female Malaysian wish to have a slimmer body to wear those new fashion trend shirt

or skirt from famous brand like Forever 18, Guess and many more. Some Malaysian

whom having a family also tend to take their family go for exercise and have a

healthy lifestyle so as to prevent the high rise of medical bills. These also help the

fitness centre a lot as more people are aware of the importance of health. As the

saying, one of things in the earth that money can’t buy is health. This implies that

health is more important than money in our pocket. According to Regional Office

Fraser & Neave (Singapore) Pte Ltd country marketing head Chris Ng, the campaign

exemplified the brand’s commitment to empower Malaysians to take charge of their

lives. “In today’s fast-paced world, many people struggle to achieve the right work-

life balance, and we want to enhance their overall sense of well-being by saying

there’s always time for exercise,” said Ng. “Inactivity is the root cause of many

health-related afflictions. So why not include some form of exercise into your daily

routine? There is no denying that regular exercise is one of the cornerstones of healthy

living. It does not need to be strenuous, just be consistent,” he added. (taken at new

straits times June 7, 2008). As a results from the many speech about important of

healthy living, government’s advices and campaigns results in a more health

cautioner’s people. These positive socio cultural forces will definitely bring a good

impact on California Fitness Centre. Beside that California Fitness Centre also has a

famous spoke person like Jakie Chan as one of their model. Whenever asian people

who heard of Jackie Chan name, he or she will surely be impress by him for this

martial art action hero. Result from famous martial art hero and actor as

advertisement, more and more people are willing to go to gym for a healthy body.

However, some Malaysians who have old fashion of thinking about health with

definitely bring a negative impact to fitness centre industry. Some Malaysian

especially the elders will be stubborn to go to fitness or gym to exercise as they prefer

exercise in the surrounding of nature. Moreover some religious and belief also prevent

female person from exposing some of their body part to other male person when they

exercise. As a result some people tend to have their exercise at the park or at their

house by themselves. In Malaysian also has some rare belief or practice that

emphasize on having a bigger and fatty body as they believe that fat and big body will

bring wealthy for them. This practice also commonly found among the Chinese

citizens. When facing such problem some fitness centre like California Fitness centre

tend to add some special facilities for those special people. Facilities like Female only

Gym Area also provided by the fitness centre to overcome such problem.

Political and Legal

Our service does not directly depend on juridical or political changes. Because each

kind of service cannot leave legal and the political restraint approximately, however

the fitness center is one about the health Service company, should award legal and the

political restraint, only like this then can give the consumer a good fitness

place.However, some decisions made by the Department of Health office could

impact on our activity. Recently, the Head of Health Department advises people to

exercise frequently and has a balanced diet and healthy life style to prevent obesity.

The government also provides to people the health important attribute, the

government also recommends to the people do some sports is good for our

health.Such act of the government will aid us in the increase of profit in our business

which emphasised on health caution. Malaysia has put in place legislations affecting

business environment. Business legislation provides protection for company,

employers, employees as well as consumer from unfair business practices and

conducts. Thus more and more business is established.

Economic Forces

Economic context impacts on the purchasing power of our customers. Since our

service is part of the leisure expense, it may be affected by a decrease of their

purchasing power. But now, Malaysia economic is in upswing state and the increase

of the purchase power of the citizen and then aid in our business of a fitness

centre.Because the economic expansion citizen's income enhancement, can increase in

the healthy aspect's investment, speaking of the citizen, sees regards as is an important

factor, they will penetrate more funds in the healthy aspect, like this better will impel

our health center the economic development, moreover economic expansion, we will

purchase equipment's price also to reduce, thus may engage in more activities to

attract the customer

In the year 2001 and 2002, due to global economic downturn and slump in

information technology sector (IT), Malaysia had experienced a decline growth in

Gross Domestic Product (GDP) and inflation rate accelerated to 2.1% year-on-year;

way above our initial estimate and market consensus of 1.8% year-on-year. But now,

Malaysia economic is in upswing state and the increase of the purchase power of the

citizen and then aid in our business of a fitness centre. Such financial circumstance

will reduce the citizen to the health investment, moreover the entire market's price

will enhance, purchases equipment's expense enhancement, the citizen will reduce the

investment, like this will reduce the citizen to the health center purchasing power, will

thus also meet the cinema that our health center down turn.

References

Exercise equipment - Wikipedia, the free encyclopedia

Amazon.com: The Gold's Gym Book of Bodybuilding (Gold's Gym Series):

Ken Sprague, Bill Reynolds: Books

Fitness Superstore - Fitness Equipment | Gym Equipment | Exercise

Equipment

Alexander Margetts Trainee Clinical PsychologistOxford University

http://www.health.gov/PAguidelines/

http://my.88db.com/my/Services/Post_Detail.page/Sports_Fitness/

Fitness_Gym_Centres/?PostID=92025

http://www.californiafitness.com

http://en.wikipedia.org/wiki/California_Fitness

http://www.24hourfitness.com/company/about_us/

http://www.clubone.com/community.html

Person International Edition Of Management (ninth edition)