course material

1. IKEA’s internal and external
IKEA’ s internal and externalI will attach some file of instruction1.1. EXTERNAL
ANALYSISAn external analysis is a crucial strategic management tool for any business to
gain long-term competitiveness. The key why business’ are successful long-term is because
they are consciously aware of what is going on around them and continually revising their
strategy to remain competitive within a rapidly changing international environment.4.1.1.
GENERAL ENVIRONMENTPhysical Saturation of gyms across Australia and
internationallyEconomic High GDP ? people with a higher disposable income are more likely
to spend their money on healthcare centres2013 Australian election saw uncertainty within
the Australian economy, but economist expect it to pick up and have an almost normal 3.5%
growth (James, 2013)Sociocultural Australia declared as ‘ one of the fattest nations’ , 14
million + people being overweight or obese (Monash, 2013)Increase awareness in society
for healthy livingPeople are increasingly becoming more health consciousIndividuals with
higher levels of education are more likely to exercise and live healthy (ABS, 2013)TV
programs like The Biggest Loser increase the populations awareness of healthy
livingTechnological Technology has enabled people to train in the comfort of their own
homesNike + Kinect Training (Sawers, 2013)Apps for Healthy Living e.g. pedometers:
counting individuals steps4.1.2. INDUSTRY AND COMPETITOR ENVIRONMENT: PORTERS
FIVE FORCES MODELA. Threat of New EntrantsOver recent years the fitness industry has
seen a rapid increase in the establishment and expansion of gym centres. VA has separated
itself from the typical gym centre and differentiated itself into a health club, although
Fitness First is still a strong competitor. VA differentiated approach and strong brand
presence enables them to remain competitive and minimise the entry of new competitors.B.
The Power of SuppliersWithin the fitness industry, suppliers are not able to gain as much
power due to the fact the supplies these facilities require are not purchased on a frequent
basis.C. The Power of BuyersThis industry is predominately dictated by buyers/consumers.
Consumers are able to demand the features and requirements gyms must have to gain their
membership. In this type of industry, businesses have to continually exceed consumer
expectations and remain at the forefront of fitness and health trends/concepts to retain and
generate memberships.D. Threat of Product SubstitutesNew concepts and methods of
keeping fit are continuously entering the market and this gives consumers alternative
options to gym memberships. Such options include:Outdoor Fitness
ClassesBootcampsPrivate Personal TrainingHealth Fitness ‘ Apps’ E. Intensity of Rivalry
Among CompetitorsDespite the vast abundance of gyms within the fitness industry, there is

2. not a dominant intensity of rivalry for VA. This is due to the nature of which VA has
established their business; it is not an ordinary gym but a health club that provides
members premium facilities with cutting edge technology.1.2. INTERNAL ANALYSIS1.2.1.
TANGIBLE RESOURCESVA’ s relies heavily on their tangible resources, as these are
instrumental in delivering the strategy. Their most heavily focused on tangible resources is
the equipment and technology they place within their clubs. VA uses the latest fitness
equipment that uses advanced technology to give their members the exceptional service
and environment they VA prides themselves on.1.2.2. INTANGIBLE RESOURCESThe three
key areas of intangible resources are human resources, innovation resources and
reputational resources, which are all applicable to VA. The Virgin brand is VA’ s most
valuable intangible asset. The Virgin has extremely high brand equity, which means that
without the name Virgin behind the health club it may not have been as successful. The
brand has enabled VA to almost self promote, as globally Virgin is recognised as being
premium quality, having outstanding customer service, high levels of innovation and being
reliable. This globally recognition is instilled in consumers minds and psychologically
allows the brand to be associated with positive connotations.1.2.3. CAPABILITIESAND CORE
COMPETENCIESVA uses their capabilities to build their core competencies and achieve a
competitive advantage within their industry. VA has several capabilities, majority of which
stem from the sound knowledge, expertise and dedication of their employees in regards to
their innovation. The Virgin brand encapsulates everything about innovation; their entire
management strategy and business strategy all come back to generating and being
innovating. This concept of ‘ innovation’ is what allows Virgin to be different and
constantly spark consumer attention and loyalty. Virgin is about offer the newest services in
the best possible way, which in turn creates their competitive advantage. (Refer to
Appendix 1.3. Core Competencies of Innovation)More example of Porter’ s factor model.
Porter’ s Five Forces analysisThreat of New Entrants: Low to MediumThere are a number
of significant barriers to entry. These include the need to acquire the legal rights for
copyrighted films and TV shows, as well as having the capability to develop and deliver high
quality online platforms and services in an already competitive market. Obviously
corporations with large capital bases and/or the requisite experience could compete, but
most small businesses would struggle in this market.Threat of Substitute Products: Very
HighThere are a number of other options and products that could be used as an alternative
to that Netflix offers, such as going to the cinema, On-demand movies, DVR (Digital video
recorder), Movies and TV shows that can be illegally and very easily downloaded and
streamed online, as well as Pay-per-view.The Bargaining Power of Buyers: Moderately
highThe customer has a variety of options to pick from to watch their favorite movies or
shows, with the likes of Apple TV and Hulu offering similar services to Netflix, as well as the
large proportion of substitute products available. If the vast majority of customers are not
satisfied with what Netflix is providing them, such as subscription costs, variety of movies
and shows available, the speed at which their content is being streamed, they can easily
switch services for a very low cost, so in this market it is important to please your
customers.The Bargaining Power of Suppliers: HighProviding quality content is key for
Netflix to stay competitive and stay operational. Businesses such as Netflix rely heavily on

3. licensing deals from their suppliers, such as Time Warner and CBS. Copyrights are
controlled by few companies and they are able to choose which company will get their
movies. Therefore the power of suppliers is big because they can negotiate directly with
them.Rivalry Among Existing Firms:HighThis is an extremely competitive market, with the
likes of Amazon, Apple, Microsoft and YouTube all competing for market share, and even
illegal downloading is making it difficult for these businesses to attract customers, with
some viewers not wanting to wait months for movies and shows until they are available on
Blu-ray or DVD or when companies like Netflix have acquired the licensing deal for the
movie 1 month after it is released. What Netflix has done to get a competitive advantage in
this market is create exclusive content such as the ‘ House of Cards’ that is distributed
through Netflix, as well as signing actors like Adam Sandler to exclusive deals to allow
Sandler to release his next four films via Netflix (Child, 2014, para. 1).