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According to Wang et al. (2012), environment of an organization consist both internal and external factors. Environmental scan has to be done in order to forecast and determine factors that can influence organizational success. As Safarani et al. (2012) mentioned that environmental scanning can be referred to the possession and effective utilization of information about trends, patterns, occasions within an organization’s external and internal environment. Environmental scanning can help the managers of an organization to find out the future plan of the company. As Safarani et al. (2012) mentioned that, it can help to indentify the existing threat and opportunity in the environment. In order to develop future strategy, a company has to take advantage of the business opportunities and minimize the threats as much as possible.
As De Giovanni (2012) stated that, internal environment analysis is the first step of the environmental scanning. According to Hohmeyer and Ottinger (2012), internal environment of an organization includes interaction between employees and managers, interaction between employees with other employees, interaction between managers, and interaction of management with shareholders. It also includes operational potential, brand awareness, main staff and operational potential. As Safarani et al. (2012) stated that, internal analysis can be done by using surveys, interviews and discussions.
As Wang et al. (2012) stated that internal analysis can help to address and evaluate the capabilities, resources and core competencies of an organization. In order to make effective environmental analysis, it is required to look at the present mission, vision, strategic objectives and strategies of an organization. The main reason behind internal environmental scan is that it can help to identify the weakness and strength of a company. It is also required to make a good strategic decision. Tools such as value chain analysis and portfolio analysis can be used to scan the external environment of a company. As Hohmeyer and Ottinger (2012) stated that value chain analysis can help to find out customer demand value from service and goods they obtain. It is a systematic approach to examine the organization functional activity. In order to increase customer value, product of a company has to be unique and different form. It has to be low priced and able to response to specific customer needs. As Wang et al. (2012) stated that, there are mainly two type of activities are included in the value chain analysis. They are such as inbound logistics and operations. As De Giovanni (2012) stated that, inbound logistics include inventory control system, material control system, warehousing and handling of raw materials. On the other hand operation procedure includes plant layout, level of automation in the process of production, production handling system and comparing equipments with competitors.
According to Wang et al. (2012), with the increase of business competitiveness, external environment of a company is changing rapidly. In the point of view of De Giovanni (2012), assessing external environment of a company can add significant elements that increase efficiency of long-term goals for that organization. As the business environment is dynamic, it is required to address the actions and moves of the competitors. As per the requirement of external environment, a company needs to update its core competencies and internal environment. According to Wang et al. (2012), environmental factors are infinite hence, a company should always be ready to accept and adjust the external environments. For example, an original forecast of the price of raw materials related with products might not be credible. Hence, it requires more focused external environmental scanning to make a trustworthy prediction about the costs. In addition, factors like market preferences, tests and competitor activities can change which can change the prediction.
As Wang et al. (2012) stated that, while conducting an external analysis, it is required to analyze and study three correlated environments. They are mentioned below:
As De Giovanni (2012) stated that, in order to examine the industry environment, a company needs to make appraisal of the competitive structure of an organization’s industry. It also includes the competitive position of a particular company and its rival also. According to Hohmeyer and Ottinger (2012), in order to make external environmental analysis, it is required to assess the stage, nature, history and dynamics of that particular industry and organization. It is also required to analyze the impact of globalization on the competition within the industry. As Wang et al. (2012) mentioned that the national environment needs an appraisal of whether the national framework can help to achieve the competitive advantage in the global environment or not. On the other hand macro-environment analysis includes analyzing political, social, legal, economic and technological factors. It can be done with the help of PESTLE (Political, Economic, Social, Technological, Legal and Environmental) analysis. On the other hand SWOT (Strengths, weaknesses, threats and opportunities) analysis can be done to find out the existing threats and opportunities of a company in the external environment.
In this section, a market analysis has been done for the fitness industry (personal industry and gym). As Joy et al. (2012) stated that, personal fitness training has become an industry which is increasing rapidly. With the increase of high pressure life style, human body is going through immense amount of pressure and pressure. For this reason, peoples are getting more attracted towards fitness industry in large numbers. At first a background for the fitness industry has been given. After that, PEST analysis has been conducted in order to find out the current situation of fitness industry.
As Vos et al. (2012) stated that fitness industry started its journey during 1970s and 1980s. During this period of time exercises like aerobics and running became popular. Membership in the fitness industry started to increase during 1990s. During 2000s, enormous growth had been evidenced by the fitness industry (West et al. 2012). At the beginning of this decade there were approximately 16,900 clubs all around the globe. However, the number was increased to 29,000 in the year of January 2008 (Joy et al. 2012). It has been found that there are more than 41 million Americans are members of any health club (Thompson 2012). From various survey analyses it has been found that fitness clubs are divided into two categories. They are such as for-profit clubs like country clubs or spa and corporate clubs and non-profit clubs such as YMCA.
Political environment
It has been found that government campaigns have developed like “swap it”, “active kids”, “don’t stop it,” and “how do you measure up.” As Joy et al. (2012) stated that, these campaign activities have influenced the community to adopt a healthy life style and aim to improve their fitness level. These campaign activities also motivate them to purchase more gym memberships.
Economic environment
From various survey analyses, it has been found that different economic factors have deep impact on the fitness industry. These factors are such as water wastes, increasing cost of electricity and increase the amount of staff wages (Thompson 2012). It has been found that all the economic factors have increased the running cost of a fitness club. However, these factors can be minimized by making good deal with electricity companies and cutting the spending costs wherever possible. From survey analysis, it has been analyzed that people on lower income level do not want to spend extra money on leisure activities. Hence, they do not join fitness clubs due to lack of funds.
Social environment
With the increase of social networking activities people are getting more attracted towards physical exercise. In Australia, it has become a major tendency of people to have better body and look good (Thompson 2012). Hence, gym has become the way for peoples to achieve these goals. With the increase of population and the improvement of life style standard of people, membership in fitness clubs have become more affordable (Joy et al. 2012). It also helps the fitness industry to provide customers great value for money.
Technological environment
It has been found that the implementation of technology in the fitness industry has increased recently (Joy et al. 2012). Fitness clubs have to update their equipments and exercise machines time to time to maintain their popularity. For example, all the fitness machines have to elliptical rather than weight bearing. These equipments need to have iPod holders so that member satisfaction can be increased. It also helps a fitness club to compete with other gyms. As Joy et al. (2012) stated that sending text message to customers about recent deals and online free pass trails can become technically effective. In addition it has been found that most of the fitness machines require high energy consumption (electricity price). For this reason, fitness clubs need to implement energy efficient machines to cut down the energy consumptions.
In this assignment, the importance of conducting internal and external environmental scan for an organization has been discussed at the first task. In the next task a market analysis has been conducted fitness (gym) industry. An industry analysis for the industry has been given. A PEST analysis has been done to understand the current situation of the fitness industry.
De Giovanni, P., 2012. Do internal and external environmental management contribute to the triple bottom line?. International Journal of Operations & Production Management, 32(3), pp.265-290.
Hohmeyer, O. and Ottinger, R. eds., 2012. External environmental costs of electric power: analysis and internalization. Springer Science & Business Media.
Joy, E.L., Blair, S.N., McBride, P. and Sallis, R., 2012. Physical activity counselling in sports medicine: a call to action. British journal of sports medicine, 2 (8), pp.12-20.
Luettgen, M., Foster, C., Doberstein, S., Mikat, R. and Porcari, J., 2012. ZUMBA: Is the “fitness-party” a good workout. Journal of Sports Science and Medicine, 11(2), pp.357-358.
Safarani, S., Arab, M., Rahimi, A., Ahangar, A. and Fayazbakhsh, A., 2012. Internal Environment Analysis Of Tehran University Of Medical Sciences Hospitals Based On Wiseboard Model. Journal of Payavard Salamat, 6(2), pp.101-109.
Thompson, W.R., 2012. Worldwide survey of fitness trends for 2012.ACSM’s Health Fit J, 15(6), p.9-12.
Vos, S., Breesch, D., Késenne, S., Lagae, W., Van Hoecke, J., Vanreusel, B. and Scheerder, J., 2012. The value of human resources in non-public sports providers: the importance of volunteers in non-profit sports clubs versus professionals in for-profit fitness and health clubs. International Journal of Sport Management and Marketing 2, 11(1-2), pp.3-25.
Wang, C.H., Chen, K.Y. and Chen, S.C., 2012. Total quality management, market orientation and hotel performance: The moderating effects of external environmental factors. International Journal of Hospitality Management,31(1), pp.119-129.
West, J.H., Hall, P.C., Hanson, C.L., Barnes, M.D., Giraud-Carrier, C. and Barrett, J., 2012. There’s an app for that: content analysis of paid health and fitness apps. Journal of medical Internet research, 14(3), pp.72-82.
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