Competitive Positioning of Today's Health and Fitness Market.

Original Article with Models:

Over the years and during my research, I have come across a number of models that describe the positioning of companies in the fitness industry and health club market. Quite often you see models relating to pricing, particularly back in the days of the growing budget model clubs and lower cost offering. Even recently, I have noticed people talking about the 'top' and 'bottom' of the market and the 'squeezed middle' market.

Again during my studies I came across various studies that discussed this 'squeezed middle' and I must credit Ray Algar, who I often came across and cited in my papers. This 'squeezed middle' market was certainly relevant at the time, but now the fitness market has extensively diversified and we have seen the uprising of low cost operators, boutique models and yes, we have seen a high number of mid market players fall by the wayside.

Needless to say, the budget operators can no longer be seen as the 'bottom of the market', given their dominance in market share, impact on the 'top end' and continued growth. In addition, mid-market pricing, does not necessarily mean that the company is 'stuck in the middle'. The market was squeezed, but we have seen many mid priced players find their own competitive advantage. With the right differentiation, or narrow focus, mid priced players are now also taking back market share.

A Different Viewpoint

I believe that the modern health club market (and future positions) can be much better represented using the Michael Porter Generic Strategies model. Rather than comparing the market entirely on price, we look at market position based upon the 3 generic strategies for competitive advantage: Cost Leadership, Differentiation Leadership and Focus Strategy.

Utilising the simple Porter model, it is clear to see where the various companies have found their sources of competitive advantage in relation to the above strategies, but also how the companies compete with each other, where new models have arisen and where future market positions may be explored. I have used a few basic examples just to represent the current market, but this can lead to a number of interesting debates. Not only about how these companies have been able to solidify their position, but also the challenges in maintaining those positions and of course the dangers of maintaining a 'mid market' position in relation to this model (Not lowest cost, not differentiated or not narrow enough).

Let's Talk...

I could write about this model all day, but in the interests of keeping my first post short, let me know your thoughts and we can further the discussion in the comments.

What are your thoughts on where this market will go in the next 2 years?

What are the risks in adopting various market positions?

What kind of future differentiation do you see coming?

In my next post we will talk about that squeezed middle and why it is important to ensure you don't get 'stuck' in the modern day middle....

Thanks for reading


Kristopher Ball, MBA