|
|
|
|
|
Technogym, the wellness company. A critical evaluation
|
|
|
International Business Strategy of Technogym®, The Wellness Company A Critical Evaluation Table of Contents: THE FITNESS EQUIPMENT MARKET 4 EUROPEAN FITNESS MARKET 5 TECHNOGYM®, THE WELLNESS COMPANY 7 INTERNATIONAL, MULTINATIONAL OR GLOBAL? 10 CULTURAL DIVERSITY 13 MISSION IM-POSSIBLE 14 “THE IMPORTANCE OF BEING ERNEST” 19 (BRAND AWARENESS IN A B2B CONTEXT) 19 CONCLUSIONS... 21 ...AND IMPROVEMENTS 21 IN DETAILS 22 APPENDIX 24 REFERENCES 25 WEBSITES 29 Vladimir: “You should have been a poet.” Estragon: “I was.” (Gesture towards his rags.) “Isn’t that obvious?” – S. Beckett ABSTRACT: This article is the result of an analysis of the International Strategy of an Italian fitness equipment company. It starts providing information about the popularity of fitness activities and lists reasons why people are attracted to them, in order to better set Technogym® in a business environment in which it operates. Technogym®’s strategy has been analysed through a deductive method, comparing the firm to its main competitor and pointing out what the company actually did to become a leader of the European Fitness Equipment market. Furthermore this paper will attempt to highlight the choice of the Italian company, as a small/medium business, for going global, analysing the main literature on globalisation concepts, and on small Italian manufacturers. The conclusions have been dedicated to the potential gaps into Technogym®’s International Strategy to be eventually improved in order to enlarge their market share and built entry barriers in new markets such as: China and East Europe. The Value Chain model by Porter has been deliberately neglected since considered a traditional way to run a business. Such model is based on the company’s core competence and the product is its starting point (Bugatti & Di Martino, 2002). Hence it is no longer suitable for a customer-oriented company as Technogym®. The Value Chain lacks of problem solving and network value. Instead a CRM and Kratzman’s models (see appendix) have been used to discourse on gaining strategic and competitive advantage. THE FITNESS EQUIPMENT MARKET The most important thing is to forecast where customers are moving and to be in front of them. – P. Kotler According to the IHRSA report (2001), in this past decade there has been a growing emphasis on the holistic or mind/body approach to exercise and this has effectively redefined the concept of fitness as people’s interest in adopting an active lifestyle extends beyond the physical benefits. The Wellness Industry is more luckily to be cited, where individual wellness is a continuum that aims not only at staying healthy and capable but also at extending one’s active life span and scope of life. Among those who exercise regularly, the payoff is great, both physically and psychologically. At least half of 1,200 interviewees suggest that exercise has a positive impact on the following aspects: Source: IHRSA, 2001 In 2000 and 2001 gender needs and ego, key factors for preference of exercise, were replaced by the need to be healthy (Tekes report): hence the relationship between health and fitness (= wellness) is the key to the industry’s future. Sources: CENSIS, 2002 1992 1997 2002 2007 2012 EUROPEAN FITNESS MARKET In 2001 the European Market for Fitness Equipment reached a value of 1,116 million Euros (www.interconnectionconsulting.com), which is an increase of 4.8%, comparing it to 2000 when the value was about 1,065 million Euros. Prices of equipment have basically decreased as a result of market competition. In details, Germany represents the biggest Fitness Equipment market, with a value of 295 million Euros, but Italy has the highest growth rate with 6.5%, followed by Spain (6.4%). The above table shows the trend of people who will exercise regularly in the future (in Italy). UK and Ireland represent the second largest market in terms of value: 21.2% and quantity 20.5%. The European market is dominated by two big fitness equipment companies: LifeFitness (the first company in the world) and Technogym®, the first in Europe. It is interesting to notice that Spain is some years behind the other European countries, Italy presents a strong growth potential market; USA, UK and Germany are somehow mature markets for fitness (Giusti & Scamper, 2003). Could this happen as Germany and USA are between innovation and wealth-driven stage and UK is in the wealth-driven one? It would mean that the industries have no longer motivations to invest and they begin to lose their competitive advantage. On the other hand, Italian companies should be willing to create new technology and methods through innovation, since Italy is supposed to be in the innovation-driven stage (Porter, 1990). The final part of the fitness puzzle is demography: people in the world are living longer. From 2010–2030, the population of elderly aged 65–84 is expected to grow 80%, the under 65 population will grow just 7%. Fitness manufactures are or should be aware of the changes. They know that the consumer is in control. Manufactures do not define market trends, consumers do. TECHNOGYM®, THE WELLNESS COMPANY There are three kinds of companies: those who make things happen; those who watch things happen; and those who wonder what’s happened. – Anonymous Technogym® was established on the 20th of October 1983 by Nerio Alessandri. It is the European market leader in the fitness and biomedical rehabilitation equipment fields, the world’s second-largest fitness equipment company and the only one of the top six not US-owed. • It employs more than 800 people in Italy and abroad, 100 or more of whom are employed in research and development; • It has subsidiaries in the US, Brazil, Hong Kong, Great Britain, Germany, Benelux, France, Spain and Switzerland; • It exports to over 60 countries worldwide; • Its products have been chosen by over 25,000 Fitness Centres and 20,000 privates homes in 60 different countries; • It now controls a share of 80% of the Italian market and this is its financial situation : YEARS 2001 REVENUES + 20% EBITDA + 16,34% CASH FLOW + 289% Source: Il Sole 24 Ore, 2002 The key factors for the company’s growth are: The implementation of the company was unplanned . Nerio Alessandri, a young man of 22 years old, due to his love for sports and physical activity, joined a very poorly equipped fitness club. He immediately realized he could do something for that place. His first piece of fitness equipment, a Hack Squat machine, was designed and assembled in his own car shed. It was no long before a complete line of strength equipment had been conceived and produced.
|
|
|
|
Still Can't Find What Your Looking For? Then Try a Essay Search!
|
