Case Synopsis

The economic output deterioration of Town Sports International Holdings, Inc (TSI) in recent years resulted from its struggles to expand the base of the club as well as retaining its members. TSI is a fitness training company established on squash.TSI shifted its attention to shareholder wealth maximization and off-balance sheet to pay out to investors by funding a special cash dividend. They focused more on the facilities used for fitness and monthly membership and the improvement in economic conditions.  This condition resulted from an economic downturn. Economic downturn should ensure that favorable growth operation rates in the industry of fitness club lead to a predicted turn around (Wheelen et al., 2018). The environment in which the company is operating on requires it to be consistent in keeping up with the status of that particular environment. This consistency is essential to achieve positive experiences in the world of fitness. The organization should also be able to decide on whether to continue using its ancient customer retention means to generate more revenue or come up with new operational options.

Relevant Factual Information about the Problem or Decision faced by the organization

In the case of decision making, TSI should have in mind how it intends to use in retaining its customers. It should choose whether to use its traditional means or adopt newer and modernized revenue-generating operations. The company is required to examine its way of approach when it comes to long- term growth considerations. It should be able to thrive in an environment that is continually changing. It should also be able to come up with ways of approaching the current financial challenges facing it as well as its trials to remain appealing to potential members together with the current ones (Wheelen et al., 2018). Some problems like retention of members as well as attrition according to the text are just as old as the industry. Fitness trends are receiving lots of influence from an increased pressure coming from boutiques which are somewhat newer challenges. This kind of pressure and force push the company to new ways it has never been through before. The flexibility of TSI will be determined by time.  Just like its flexibility, its vision in defining its destiny in a predictable environment will be determined by time (Wheelen et al., 2018). A flexible organization and time when it comes to putting up and changing rules is more likely to have more members because flexibility brings about understanding.

Explanation of Relevant Concepts, Theories, and Applications

TSI has a challenge in recruiting members. The challenge results from their focus on making more short term goals and very minimal long term goals. Maintaining a strong customer base and membership growth is essential for any company. TSI should come up with appropriate ways of gaining more members and maintaining their customer base. A yearly membership pass in any gym is cheaper than the monthly training contracts. The offering of a month to month membership in a gym does not benefit that particular member in the long run (Shafrin, 2017). A majority of the members may not even have enough time in a month to train effectively and will end up training in a few days but pay a fixed monthly membership fee.

Recommendations

TSI should be in a position to offer a longer membership training contract to its members. An extended membership of maybe a year motivates a customer from training and retaining his/her preference membership. For members who have been members for quite some time, the company should give them discounts like free training classes. The company should also employ physical trainers who are willing to take the members through fitness lessons, as hostile trainers will prevent members from training. A continuous short term manner is not only likely to drift members away from training in the fitness company but is also expected to result in its closure. A goal does not have to be a massive goal for members to attain it, but a deprivation of it kills the individual’s motivation in staying with the gym (Shafrin, 2017). It is essential for the fitness company to seek after the interest if their members first for them to realize exemplary output returns.

Alternative Recommendations

Members ought to be treated on an individual basis rather than on a group basis. Many gyms regard their members as part of their group club. Gyms should adopt a mindset of making time spent by their members in the gym better. By so doing, they are more likely to be successful in recruiting more members.

Conclusion

In conclusion, fitness organizations need to think ahead instead of offering short term goals to their members. This business type should always be ready for upcoming changes in health and new trends. Long-term goal strategy can save the organization. It will ensure that they plan and prevent membership decline. Putting their members as their priority will improve and increase their customer base and increase membership.

References

Shafrin, J. (2017, January 04). Aligning Incentives « Healthcare Economist. Retrieved from http://healthcare-economist.com/2017/01/04/aligning-incentives/

Wheelen, T. L. (2018). Strategic management and business policy: globalization, innovation, and sustainability. New York, NY: Pearson.