Crunchs Management - Essay Example

Download file to see previous pages... However, in spite of this 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 really favored its operations and above all this positioning and expansion had been funded by a donor. At 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, the 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 exploiting 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 they enjoyed a good brand name. The move to acquire SportsLife was perfect as the company would increase its club mass on 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 were needed be put in place in every market in order for the company to acquire a 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 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 relatively renewal rate as compared to Crunch. From such a scenario, it implies that by giving this 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 membership. 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 their efforts into ...Download file to see next pagesRead More