Question

Is LA Fitness's approach a suitable response to low-cost competitors? What should they do differently according to the consultants A.T. Kearney?

Answer 1

LA fitness is an American gym which has about 690 plus fitness clubs in the United States and Canada. Providing better service and facilities is LA fitness’ strategy to combat low cost competitors. In the course of rebranding and rebuilding its brand, LA fitness now has a coherent approach to the facilities in addition to differentiating its services from competitive gym facilities.

The consultants A.T Kearney states superior consumer value can be provided for less. It is not required for LA fitness to invest heavily in improving its facilities. Instead, LA fitness can provide superior customer service at the same cost. AT Kearney also proposes different typology for driving the company’s value which reflects the growing market demand for customer service that differentiates the firm from the competitors. For LA fitness, the typology is “End outcome typology” which refers to stay healthy by training well in the gyms. The firm needs to choose the typology which provides them a clear focus on ‘how to win the game’. Typologies are distinctive business models which are built around customer segments, product portfolio, price-positioning, etc. This provides the firm with long term goals and success in the industry.