LES MILLS CORE COMPETENCY Les Mills Group Fitness
LES MILLS CORE COMPETENCY Difficult to Duplicate – are licensed out Superior to Competition in NZ domestic market Les Mills Group Fitness Programmes CORE COMPETENCY Applicable to multiple situations; 8 different types of classes, also have personal training programmes, and team training Market Share graphs • Market share acquisition is 1215620 • Is 22222 acquisition in 5 years of the 1215620 total overweight adults in New Zealand Balanced Scorecard Financial Performance Goals Measures Value and Capabilities Match Value Requirements Distinctive Capabilties Les Mills Marketing Interactive marketing Customers and Consumers Personal trainers Consultants Staff Don’t deliver Are they unleashed Employees External Marketing Brand promise: Unleash yourself Or Passionately driven for a better you Company Internal Marketing Have the largest personal training team LMI Master trainers Group Fitness instructors LM staff are highly sort after overseas Market Attractiveness: Business Position (MABP) Matrix Market Attractiveness High Med 1 Med Low Group Fitness Programs 1 Weight loss Products and Services 2 Fitness Club Concept Day Spa, Tennis, Pools etc Technology Products/Services 1 Low Business Position: Ability to Compete High 2 3 3 3 Low Price/High Value Strategy 2 Customer Value Picture – need to rate on scale of 1-10 BODYPUMP etc BodyTrainer Personal Training Programs JUMPSTART Group Fitness Programmes Team Training Programs Weight loss BOOTCAMP SPARTAN LOOK BETTER NAKED LOOK EVEN BETTER NAKED Body Trainer REVOLUTION Quality Gym Equipment Overall Facilities and Services Availability Spa’s/Saunas and Changing areas Les Mills Instructors, Les Mills certified Strong Trainer-Customer Relationship (Friendly) Availability/Quality of Staff/Gym Hours Customer Value Opening Hours Image and Reputation Price and Charges Other financial costs Overall Cost and Price Non-financial Costs Sense of Community Pride Membership Fee Weekly/Month Rates Additional costs for services/programmes Time to Gym Waiting time/Capacity Constraints The Say-Do Triangle What we say i.e. Advertising Brand Perception What others say and do/Unplanned messages What we Do i.e. Experience and price Value Delivery Choose Value Deliver Value (What) (How) Communicate Value (Marketing) Brand Equity (could use for strat?) Organisations Presented Brand Brand Awareness External Brand Communications Brand Equity Brand Meaning Stakeholders Experience with Organisation Good slide to show increased retention in strat – Called Hierarchy of Effects Model Awareness (90%) Knowledge/Comprehension (70%) Liking (40%) Preference (25%) Trial (20%) REPURCHASE REGULAR USE 5% KPIs – Balanced Score Card Financial Measures Learning and Innovation Measures Balanced Score Card Management Control System Internal Business Process Measures Customer Measures Metrics Marketing Metrics Brand Equity Meterics Competitive and customer metrics Familiarity Strategy Awareness of coprate goals Internal Communications Profitability metrics Market Penetration Culture Perceived calibre of employer Etc Product and Portfolio metrics What they think about brand Outcomes Relative employee satisfaction Etc Customer profitability metrics What they feel New Product metrics Commitment to corporate goals Sales and channel metrics Loyalty Employee retention Pricing metrics Availability Perceived resoruce adequacy Innovation Metrics Internal Marketing Metrics Promotion metrics Appetite for learning Advertising media and web metrics Freedom to fail Financial Metrics Customer brand empathy Internal Process Metrics Where to compete Market Attractiveness by Customer Group High Government / Education / Health Major Accounts Other Copy Shops Margin Consumer Product Dealers Retail Computer Dealers Business Partners Low Low = Size of Bubble Indicates Revenue Size Revenue Growth High Strategic Group Map High Les Mills Body Tech Curves Copy Shops Citi Fitness Conto urs Price Club Physical YMCA Jet Fitness Uni-rec centre Low Low = Size of Bubble Indicates Revenue Size Quality High Financial Metrics Membership Price Revenue Sales Volume Market Share Profit Direct Costs Drivers of EBIT Drivers of EBIT Increase Volume Strengthen Loyalty of Existing Customers Support System & greater Personalisation Increase Revenue Communicating with your customers Actions to cement your customers loyalty Communicating with competitors’ customers Actions exploiting where competitors’ vulnerabilities lie Actions that better the competitors’ offering Decrease Cost Grow EBIT Eliminating costs, including labour costs, that can be reduced or eliminated without destroying customer value Change Mix Presenting preferred bundle of products and services for customers Increase Price Exploit Vulnerability of Competitors New Technology Systems offer greater motivation Understanding price / quality trade-off Diversify into Body Management Market Average Weekly Membe Rate Number of Members x Driver Tree Analysis x 46 000 52 New Member ship Sold per Week (Joining Fee) New Memberships Sold p.a. x $77 332 000 x Average Membership Sales Price (Joining Fee) + Cost of Customer Acquisition $6 104 000 52 + $1 000 000 Marketing Number of Part Time Staff $3,000,000 123 Personal Trainers Rent From Personal Trainers x $1 900 000 260 Hours per Week Hours Average Rent $7 308 pa x Gross Margin on Les Mills International Ltd x 51 6,240 168 Average Wage Rate x 8 Days Weeks Open 52 $16.00 p hr (Not Included) FTEs x Labour $15 027 168 x + Overheads Hours Hours per Day 8 Average Wage Rate $23.00 p/h Loan Payments + x 10 Loan Monthly Instalments Other (power/equip/upgrades) 297 617 760 Number of Gyms $30 802 468 Weeks Open Other (Admin) + - 269 Membership Consultants Commission - $71 228 000 $40 425 532 14 000 $99 Gross Margin on Membership Les Mills Profitability Weeks Open Revenue from each member $1 651 Membership Revenue $31.75 pw x Days Open 260 Customer Acquisition Margin Les Mills Potential Revenue Total Adult Population × Proportion that enquire at Les Mills × 3% 57% 47% 100% Actual proportion of People who sign up Customers who should sign up 25890 $4 403 221 212 Total Population who want to get fit Incidence Rate of People who want to get fit Number of People who come into Gym $39715260 2 870 418 × 55086 Club to Hub New Memberships 1 636 138 × Market Revenue $25 998 444 Proportion of people who actually sign up Les Mills Margin 47% × $10 323 608 Les Mills Direct Costs × $29.50 Average Price Per Test Les Mills Increase in Market Share = Input Driver
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