Which Strategic School of Thought is Right for Your Health Club?

In the fitness industry, staying ahead of the competition just isn’t as easy as it used to be.

On top of a booming market and increased competition, the way businesses approach strategy has changed drastically in recent years.

“The reason that these things have evolved is that, up until the last decade, industries tended to conduct strategy in a confine of thinking that had to do with the past being a reasonable predictor of the future,” says Bryan O’Rourke, CEO of Integerus, LLC. “There was a lot more certainty when it came to a plan and strategy because people would take their knowledge from what happened before and say that’s a reasonable guess. But you just can’t do that anymore.”

During his IHRSA webinar, “Staying Ahead of the Competition: Competing Successfully in the Fitness Industry,” O’Rourke went in-depth on three new strategic schools of thought:

1. High Risk/High Return

“In this scenario, you do something completely new and different,” O’Rourke says. “Find new, completely uncontested markets and transform everything around that, which has high degrees of risk and high degrees of return if you get it right.”

Peloton, for example, followed this strategy when they began selling bikes for home use that allow customers to live-stream cycling classes.

“It’s very disruptive and completely new,” O’Rourke says.

2. Build on What You Do Well

“When you build on what you do well, you incrementally build outside your core to defend against disruptors,” he says.

Examples of companies in the fitness industry that follow this strategy are clubs that are creating boutiques within their club, thus staying true to their core while also guarding against free-standing boutiques that could infringe on their market share.

3. Don’t Assume Anything

Companies that follow this strategy don’t make assumptions—they evaluate several opportunities, test ideas, and iterate until they find what works, O’Rourke says.

“There are now fully eight clear, distinct business model delivery systems, and within those eight there are subsets, so the number of offerings and business models out there for fitness have proliferated in the last decade,” he says. “Consumers are presented with many more choices, so to really do strategy well, fitness companies have to really be objective and evaluate what are they really capable of doing.”