Slimgim Essay

SWOT ANLYSIS

1. Strengths

 SlimGim has inexpensive gym fees at convenient locations enlarging their customer base.

 They have proved that her business model works in Gauteng and Kwa-Zulu Natal; under the same business model it is expected that Cape Town will have the same prospective of growth.

 SlimGim has been showing double digit growth rate. Therefore, SlimGim has shown the ability to survive in a highly competitive environment and still achieve the goals set by Ponte.

 SlimGim can gain an advantage of the International brand being an associate of FatGim, which has manifested itself with international prestige and expertise.

 Management of SlimGim has been successful in the past, ergo they will be retained in order to continue with

Weaknesses

 Secondhand equipment in a new Gym may discourage members, especially based on the popularity that Long Street has as an elite area.

 They have experienced significant growth through acquisition, hence they may face cash flow problems in the near future.

 They plan to open up new gyms in quick succession which will worsen the cash flow situation of the SlimGim.

 They do not have a comprehensive product offering, they only offer two gym packages, which may deter customers from different income groups.

 They do not have contracts in place with medical aid schemes (ex. Discovery) to take advantage of their wellness schemes, this will lead to medical aid clients choosing a gym with these offers already in place.

 Management is incentivised through bonuses, therefore there may be a risk of fraud due to management wanting to increase their personal bonuses.

 Their growth strategy requires large amount of capital, they are already highly geared so by taking on more debt they are risking the going concern of the company.

 As Ponte focusses on return on equity they would rather take on debt than dilute shareholding, which increases the financial risk of the

the warrior race) have become increasingly popular, and SlimGim should partner up with the organisers of these events to get a cheaper rate for its gym members.

 Increased urbanisation has seen many more consumers moving into the target areas where SlimGim’s are located, this increases their potential customer base.

 They can offer a more comprehensive product range that appeal to a wider range of income groups.

 They need to partner up with medical aid schemes such as discovery’s vitality.

 The Cape Town gym should be opened up as soon as possible, they should not wait till 2017 to open the gym, a competitor may beat them and open up a gym before then (see effect in part D).

 They can provide free training programs to new members which will encourage them to work out and stay on.

 They can offer free Wi-Fi in their gyms which people can use to check into social media, which is free