Establishing a Very Strong Brand - Essay Example

the Crunch management should ensure that their name is not affected by the expansion. Already people had gained so much confidence in the services that Crunch offered thus changing the brand name may cost the company some of its customers. Levine asserts that he knows exactly what needs to be done to promote the brand but all he needs is assistance. Crunch has insightful leaders who are very dedicated and all that they required was to draw a well strategic plan of all the activities they will engage in before they acquire SportsLife.   Crunch’s Los Angeles position had favored its operations and above all this positioning and expansion had been funded by a donor. In this position, they were able to collect a substantial amount of revenue. Generally, the overall revenue for Crunch combined with other external collections, was enough for reinvestment. Crunch’s top management had so far proven to be very innovative for instance, coming up with the idea of fitness clubs as tenants of real estate was great (Harvard Business School 5). They always came up with new ideas which upon exploitation proved to be very profitable for the company. The experience that the company already had on the expansion as it had started as a small business venture, would aid it to pursue the SportsLife acquisition.   However, a lot needs to be put in place before doing this considering that if they acquired SportsLife, they would increase their size by 60%. This implies that what they were going to acquire was more than what they had in place already. Crunch should strive to expand its operations at this critical moment when it enjoyed a good brand name. The move to acquire SportsLife was perfect as the company would increase its club mass in a very pleasing market Harvard Business School (6). An expansion strategic plan needed to be put in place on how the activities would be executed. Firstly, flagship facilities needed to be put in place in every market for the company to acquire greater coverage. Furthermore, intensive advertising activities should be pursued to inform their potential customers of the changes they had undertaken. Though expenditures would rise, they were going to be got from many clubs as well as a larger membership base.      Although the acquisition was worthwhile, it would take Crunch quite some time to merge it completely into its brand. Fortunately, looking at the performance of the company it is confident that if they acquire the new facilities they will be able to generate more revenue than what the clubs currently generated. The clubs generated about $17 million in revenue annually which meant they were not doing badly (Harvard Business School 8). At the time SportsLife clubs had approximately 70,000 members who had a relative renewal rate as compared to Crunch. From such a scenario, it implies that by giving these clubs the Crunch reputation, the renewal rates are likely to go up boosting the revenue base. In addition, the clubs’ current condition was not comparable to the Crunch clubs, thus it meant upon upgrading the clubs, they will attract more members.    Crunch should view the differences that exist between SportsLife’s clubs and its own as a stepping stone to differentiation and diversification. Since Crunch had exploited all the opportunities at their disposal successfully, they needed to explore new ideas and personalize them. Harvard Business School (9) explains that two of the SportsLife clubs were strategically positioned to Crunch’s advantage. What Crunch needed to do was to concentrate all its efforts on these other suburban clubs and upgrade them the urban status. Furthermore, they should not fear exploiting new opportunities since they may come out to be the best. Looking at the situation positively, maybe not many fitness firms had gone suburban, thus this would present a perfect opportunity for Crunch to exploit. Finally, Crunch can expand successfully without damaging its brand. First, they should ensure they have enough revenue for expansion so that they will be able to do all the upgrading to SportsLife clubs before giving them the Crunch brand. Crunch’s customers have been used to very quality services and equipment, hence cannot settle for poor quality stuff.   All Crunch will need is to intensify its advertisement campaigns to inform its potential customers of the new developments in the company.                 Read More