Force 1: Competition among existing firms in the industry
The fitness industry is highly competitive, as well as highly fragmented. There is a very high degree of difference in the services provided in the fitness industry. According to professional trade journals, the fitness industry is once again growing and it is growing at a rate of 5% as of this year.
While the highly fragmented aspect of the fitness industry makes the market more challenging, there is a high degree of differentiation in a growing market. This means competition is not solely based on price.
Force 2: Threat of New Entrants
The threat of new entrants into the online fitness space is extremely high. These days, it seems like anyone with a social media account can (and do) call themselves an online fitness coach. Fitness certifications are not hard to obtain and don't require a whole lot of intelligence to pass.
The difference in the SKFitLife online approach is that we offer more than just some private Facebook group and emailed workouts. This is a 12 Week Program that takes the client step by step through the who, what, when, where, why, and how of fitness, nutrition, and mindset.
Besides the working relationship the clients and the coach build, there is a built-in community which makes the cost of switching high.
Force 3: Threat of Substitutes
Threats of substitutes is very high. The fitness industry has a new fitness craze popping up every day. As technology evolves, so will the offerings for fitness. Some clients will leave to try the new technology. This has happened before, but many of them return when they find the new shiny technology doesn't solve their issues in fitness like SKFitLife did for them.
Force 4: Power of Suppliers
The suppliers in the online fitness business include hosting. This is a fixed cost and does not fluctuate. Additional suppliers include graphic designers, photographers, and administrative assistance.
Suppliers have very little impact on my prices and ability to operate.
Force 5: Power of Buyers
Buyers in this case can be individuals or businesses (corporate wellness). With the international capabilities of SKFitLife and the ongoing and dynamic nature of health, our buyers are not concentrated. There is also a high switching cost associated with changing fitness programs since clients have formed relationships.
Industry Attractiveness Summary
While the fitness industry is highly competitive and the barrier to entry is low, there is a high degree to which I can differentiate my company and offerings from the competition. I am not at the mercy of suppliers, and I can attract buyers from all around the world, my profitability is not at risk nearly as much as many other fitness industry businesses. The community aspect of this business model also makes for high switching costs.
Industry Attractiveness Summary
While the fitness industry is highly competitive and the barrier to entry is low, there is a high degree to which I can differentiate my company and offerings from the competition. I am not at the mercy of suppliers, and I can attract buyers from all around the world, my profitability is not at risk nearly as much as many other fitness industry businesses. The community aspect of this business model also makes for high switching costs.
First, nice abs in the promo photo and great looking kids!
ReplyDeleteAs far as the industry is concerned, it really seems tough to get noticed. When I have insomnia, I channel surf and see old chuck Norris total gym ads, Jillian doing some treadmill commercial, even shark tank has had there share of fitness equipment.
These days, Oprah owns weight watchers, we have Marie Osmond doing Nutrasystem and Kristie Allen doing Jenny. For guys we have Terry Bradshaw pitching for Nutrasystem when he's not bugging people about shingles. You are right, there is heavy competition. I guess you really need to focus on a niche. Rather than Tybo, you are offering a personal service. Thats the secret sauce -- Can I connect with you personally as opposed to some system where its up to me to be success?
It seems to me thats its not really scalable without lots of bucks for an infomercial. Is there some niche that you can get into initially? Can you partner with a medical office for post bariatric recovery, work with the aged for low stress workouts and dieting? There are a lot of baby boomers that are aging and want to remain in shape. They also have more money to spend on it. I just think you need some hook or Niche to differentiate yourself from all the other products out there.
Stephanie,
ReplyDeleteRegarding the threat of new entrants and the threat of substitution, you mention the 12 week program as a differentiating feature for your business. I'm not sure, but it sounds as if the threat of substitution is attrition from unsuccessful fitness endeavors. But couldn't threat of substitution and switch costs (time, energy) frustrate some users into quitting altogether?
Stephanie,
ReplyDeleteBeing in the fitness industry, it is commonplace to see substantial turnover. With the low barriers to entry and the existing players looking for market positioning, it feels like there is always something or someone new being introduced. Businesses in industries such as yours benefit from positive brand recognition and perception. These things typically come from quality offerings and great customer service. While it doesn't completely eliminate the threat of substitution, it certainly gives you an upper-hand in customer retention, especially when they've come to you after coming from one of your competitors.