Can Transition expand without losing its elite

aura?Submitted To: Submitted By:Hitesh Jhanji Sir Manpreet Kaur(11404239) Rimaljeet Kaur( Angadbir Singh(11410838) Gurpreet Singh(11401770) Gourav(11402270)

TRANSITIONFirst ULTRAPREMIUM health clubOpened in 1980-8125,000-square-foot facility Staffed at - full time 14Members - 2300(Initial)Services available globally

TARGETS

FEELING OF UNSETTLEMENT

•Operating expenses continued to rise

•Sales growth flattened

•Transition’s membership was aging

•Deliberately created high-cost facilities

CONTINUED.....•Rising Competitors –

  Clarkhouse, a top-rated hotel chain Manhattan-based Fitworth health club chain.

•Ambassador hotels had approached with a proposal to carry the Transition clubs at its locations worldwide

MANAGEMENT DISCUSSIONGordon proposed: Drop annual fee and instead charge a one-time initiation fee

With a corporate discount and package pricing for various services

Go down a notch-Transition name at Ambassador hotels

Opening Transition satellite spas at certain corporate headquarters

MANAGEMENT’S RESPONSES

Scott Conner ( Director of sales and marketing )•We can’t offer less; we can’t sell less.•Core strategy is undermined Kim Cole(Company’s number one sales associate)• We’ll lose our marketing edge• Would Tiffany sell a cheap line of jewelry at a department store boutique?

DISCUSSION

CONTINUED…. Frank Casale (Transition’s director of operations and facilities)• If they don’t grow, it’ll be a real squeeze•The budget keeps growing, and the only way to maintain quality facilities is by growing revenues

•Expansion- broadening their niche

EXPERT COMMENTS

WILLIAM CAMPBELL (pricing strategy)

Price discounting – limited context

High risk maneuver

Targeting non-candidates

Flanker strategy

Low risk plan

ROBERT J. DOLAN (importance of value

consciousness)Cost cutting not the only option

Core aspect – better quality

More facilities at a single rate

No issues regarding payment options

Targeted at a specific set of select groups

ANITA K. HERSH (brand identity strategy)

Opportunity to explore & expand

Branding – way to communicate

Innovative ideas to win new customer

Prominent example - Mercedes(C class)

Introducing new related products

PETER H. FARQUHAR( Brand renewal

strategy)Idea of opening corporate satellite Transition spas as

most promising one

Rejuvenate the brand

Leapfrogging competitive offerings

Building a bridge brand

DAVID AAKER(Downscale move Strategy) Introduce horizontal product extensionsEnhancing the company’s service offering Develop concept for a downscale clubo qualitatively different ono overlap with Gordon’s current targetocreate a brand personality for the new offering

MARY SHELMAN(Brand expansion)

Moving down market will put pressure on Gordon’s current pricing structure

Importance of exclusivity as a product attribute

Develop a separate, complementary chainExpansion-signal a change in the company’s core strategy

CONCLUSIONThe changes Gordon proposes are not as simple as a new product offering: they signal a change in the company’s core strategy. Ultimately, tailoring the pricing, partnering with another company, and even opening satellite corporate locations could be good ideas, as long as Gordon is clear about his objectives before he makes a move.