Strategic Analysis of Arnold Leisure Centre

Executive Summary

Arnold Leisure center is a sport, Leisure recreation outlet lead by a local authority. The core competence of its strategy is dedicated to the highest involvement of grassroots. The organization is more active for corporate social responsibility and equal opportunity. To organize the strategic analysis of the organization this paper has analyzed External environment, SWOT analysis, PESTEL analysis, BCG Matrix, and Internal Analysis. It has also presented the Structure of Arnold Leisure Centre, Strategic analysis, Evaluation of life cycle, Key Issues and drawn Recommendation to support a conclusion.

Introduction

Ravenscroft, N. (2004) stated that in the UK the local governments have played the traditional role of the foremost investors for sports and recreational. This action of the local governments has been propagated based on alleged allowance defects in the sports and recreational market mechanisms for private entrepreneurs.

Cabinet Office (2002) argued that the state Game Plan guiding principle would makers it clear that the government is much more aware of the participation of grassroots level’s participation. As a core concern of the Government, the local authorities particularly emphasized the Leisure center in terms of state facilities, public-private partnerships, decentralization of local government activities, and improving core competence of local Game plan services.

Williamson, D. et al (2004) explained that modern business organizations are well planned with their structure and strategy to accomplishing their vision statement with the expertise of the management and workforce. The organizations are much more responsive with their corporate social responsibility as a part of their operation. The organizations are driving to the global operation after booming operation in the local market. To analyses, a business organization this paper would go for Arnold Leisure center. This paper would analyze the strategy of Arnold Leisure center, its organizational structure, culture, and environment. The paper also looks for the SWOT analysis of Arnold Leisure center to draw the key Recommendations. Arnold Leisure center was well known in the early nineteen’s dealing with which is now a strong local governmental initiative with fifty fields of operation including electronics, chemicals, and machinery.

Industry Definition

The general prediction of the industry indicates the combination of inhabitants and firms affianced in an exacting commercial enterprise devoid of a comprehensible spotlight of that businesses industry possibly would fit in that economic feature that might be unsuspecting for the many revolutionize in the society that would affect any player of that segment. These alterations could be predicted if organizations are acquainted with their industry as well as the environment. The Leisure Industry is the segment that offers sports, entertainment, and recreation services with required resources. The leisure and recreation industries are dedicated to entertainment as well as furnish life value and living style.

Industry Analysis

Arnold Leisure centre is a wing of Gedling Borough Council, the local government district of North- East of Nottingham City at Arnold. It has enclosed with two parliamentary constituencies where the Arnold Leisure centre services are offered. The Arnold Leisure Centre was established in 1982 with motto “Healthy, green; safe and Clean”. Arnold Leisure possesses resources as Swimming Pool, Teaching Pool, Meeting, Theatre, Arnold Library building, Cinema Hall, Conference Hall and Licensed Bar where a large number of services offered for the general people with ultra modern facilities. The regulation of the offered services has well designed scheduling keeping full attention to the local population and serving an instantaneous population of around 36,000 local inhabitants with an on site public car park and transport route

Juby, L. (2007) mentioned that the Strategy chosen by Arnold Leisure Centre in Nottingham UK is very significant and the County Council sketched out its vision with aspiration to generate a Nottinghamshire where one and all has an equivalent opportunity to survive, study, play and work in an environment without any discrimination and injustice. It would be a heaven of the earth where citizens subsist in accord and sympathy among interconnected communities based on their values, caring, thoughts and diversity with respect to each other.

Gedling Borough Council (2004) addressed that Arnold Leisure Centre starts its journey to serving the local community of all age group in cost effective manner and as part of corporate programme including four other amenities all over the Borough. The Arnold Leisure centre is famous for its swimming programme all age group with diverse water games also. Its Theatre hall has seats for 176 inhabitants with unconventional use of space with excellent bar facilities when the whole amenities ensure wide range of activities including entertainment.

Recessionary Impact

Under the present credit crash and recessionary economy a number of economic features are work against to impact UK customer’s spending for indoor and outdoor sports, leisure as well as recreation sectors. The UK economy persists to stumble with pressure of housing market collapse, comprehensive credit crisis, downturn of money markets as well as aggravation labor market and threat of job cut. The effect of Bailout bill and rescue package of the government has been failed to protect the economic downturn and escalating inflation and to increase customers buying power. The UK customers are striving to sustain their previous lifestyles. The recessionary package does not reach to the bottom line people due to high pay executives. Within this scenario decreasing energy prices have facilitated customers as a touchable relief when the state adopted relief articulated in an assortment of customer’s confidence statistics.

The most traditional customer’s psychology has been distressed the Leisure, sports and recreation and leisure markets. Mass people are pregnant to have a pickup in the last quarter of the present year performance but the researchers and analytics argued that the Leisure, sports and recreation industry has to be well prepared to face a long-term recessionary impact.

External environment- Global/Social or PESTEL analysis of ALC

According to the view of Porter, M. E. (2004), the modern political, demographic, social, technological factors are reformulating this industry’s historical potential. For ALC’s external environment can be experimented by PESTEL analysis as below-

• Political factors: Political situation always changes the business environment, increase or decreases the risk such as government changed the taxation policy by reducing tax and it will help people to spend more for leisure time. Recently, government researchers are posing expectation about the growth fitness training and aerobics instruction along with a positive attitude.
• Economic factors: Global financial down turns creates some uncertainty future expenditure of the customer, which may affects on discretionary of the customer, and this market will be adversely affected. Now-a-days people are busy to meet the necessity rather than luxury. The data of ONS¹ has demonstrated that by September to November 2008 the number of unemployment in UK has increased from 0.131 million to 1.92 million. For recent unemployment problem income, savings and investment has decreased all over the world; therefore, people have leisure time but not have sufficient money to expend for leisure purpose.
• Socio- cultural factors: There are merely 3300 health clubs in UK, huge demand and necessity of people causes a great possibility of being successful in this sort of business. UK will arrange 2012 Olympics so it raise the interest in sports, Growth-rate will increase and government will provides incentives or invest in this sectors.
• Technological factors: The industry is technologically upgraded by utilizing numerous tools for personal fitness training, digital equipments, upgrade booking system by software, Internet technology and some new discoveries.
• Environmental factors: ALC has reduced to use of CO₂ to save the world from global warming and ALC is bound to follow the Environmental Protection Laws. Moreover, ALC has few own regulation to protect the environment from pollution and leisure activities are depending on the environmental condition.
• Legal factors: ALC is bound by the rules and regulation of the Government. UK government has passed Civil Rights Act 1964 and Sex Discrimination Act 1975 for restricting discrimination in hiring, compensation, privileges, conditions and terms of employment on the basis of gender, race, religion and so one. ALC has to consider the health and safety issues of employees and customers so it use safety equipments and it has lifeguard in swimming pool.

SWOT Analysis of Arnold Leisure Centre

In this SWOT analysis of Arnold Leisure Centre will be find out the organisations strengths, weakness, opportunities, and threats that the business faces in everyday operations. There are two steps in SWOT analysis implementations:

Strengths: Arnold Leisure Centre enjoys a number of strengths such as-

• Excellent location for easily attracting customers’ attention,
• Nowadays, huge number of population are being suffering from various types of problems for example mental and physical disability, diabetes, osteoporosis, sleep disorders etc that can be maintained by regular exercise and gymnastics practices.
• It has 100 well trained instructors and staffs,
• Swimming Pool and Bar is safe place for the visitors,
• It has fully equipped Theatre room, which consists of 176 seats and It has upgraded exercise instruments,

• More than 50% of the total populations pass for the diagnostic and treatment purpose that can be minimized by preventing illness with a wide sort of regular exercise that influence people for the club membership. Therefore, its health and fitness provision is significant;
• Multiple depth of the market size,
• It has strong financial support for expansion as alliances or partnership with hospitals and fitness clubs,
• It has capability of serving people in distinctive way within the family market,
• Arnold Leisure Centre has strong social position because of community respect.

Weakness: – there have some weak points such as –

• Lacking of facilities for customers, shortage of employees, management problems and failure to maximise profits are the main weakness of the company.
• Higher charges for several services cause less and specific customer traffic than the practical necessary groups,
• Crèche resources are not enough for the children so it enables to meet modern consumer expectations,
• It has no future plan or initiatives to expand its business,
• Swimming clubs has used neighbouring-pools in Nottingham for training purpose,
• it has only 50 seats in Licensed Bar to arrange functions but the demand it higher than its capacity.

Opportunities: – it has several scopes for instance-

• Opportunity of serving children, youth, young adults, older and women segments by offering a complete range of all generation’s athletic, leisure, fitness and past- time requirements.
• It has scope of combining fitness and wellness issue by joint venture other industries,
• By changing the leadership style, it can enhance its profits.
• It has opportunity to arrange more seats in Bar place because it has high demands.

Threats: – it should measure the risk factors-

• Complexity of operating services as complementary of mainstream medical caring,
• High cost of subsidising leisure as well as community centres., which is the barrier for expansion
• It should expand for profits but day to day it has reduced its services such as decrease swimming facilities,
• For the global financial crisis its business will be adversely affected; therefore, the investment for development project of £3.5million will not be effected.

BCG Matrix and Arnold Leisure Centre

The Arnold Leisure Centre can classify the entire of its strategic business units by using the Boston consulting group representation and the growth share has been demonstrated below in accordance with this matrix-

This figure represents that the market growth of Cash cow is low but relative market share is high which indicates that for expansion of businesses it require less investment to sustain the business; however, Arnold Leisure Centre shows opposites market growth.

On the other hand, the market growth and relative market share both are low in case of Dogs, which indicates it needs high investment to develop the financial condition of Dogs and its businesses positions is inverse from the position of Arnold Leisure Centre’s market growth and relative market share.

This figure also demonstrates the position of Question marks and Question marks indicate low down allocated business units inside the high growth market, they need abundant resources of cash to transmit on their share, and move alone boost them.

Finally, the most important part of this figure is Arnold Leisure Centre, which point outs the highest position of the matrix, which is perfect for its business, which they offers is in the superior market share by way of an enhanced growth rate than several of its competitors. Therefore, it should require low investment than other and it has well setup to furnish their business position.

Internal Analysis

Strategic analysis of Arnold Leisure Centre

Griffin, R. W. (2006), argued that strategy is the game plan of a company’s management that evaluates market position, operation procedure, attract and keep potential and growing consumers, achieve organizational objectives and compete successfully. ALC has designed its strategy considering four levels of strategies and market conditions such as-

• Business Level Strategy: this level of strategy should follow because from this strategy, it can be found the ALC’s industry situation in relation with other rivals and to increase growth rate it will invest £8.44m for improvement of buildings, £3.94m for the development of swimming pool.
• Corporate Level Strategy: ALC is followed high level of multi-product or corporate level strategy because its sales revenue is not depends on the single-product business,
• Cooperative Strategy: As ALC is a wing of Gedling Borough Council, this strategy is effective and it can formulate partnership with firms through a mutual interest of resources and capabilities.
• International Strategy: This strategy is not fit for ALC as its operational activities is limited to Nottingham City.

In addition, market segment, financial support, technical support exchange, product innovation and development, develop investment process are the reason behind to choose the strategy. These are discuss as follows-

• Target market: School going children, youth, adult, old, and high or middle- class elder citizen.
• Service line: it offers swimming training programme, cinema, health and fitness services, and practicing services,
• Price: it offers reasonable price somewhat below than competitors,
• Distribution outlets: Single servicing center,
• Customer service: Consistent service with training of instructors and staffs by the external expertise, follow- up registration cars and telephone call from different members for getting feedback, regular contact with members with newsletters, telephone call, e- mail or fax, continuous improvement of quality of services.
• Service promotion: A number of promotional efforts will include free classes, consulting services, standard diet suggestions, premium, discounts and coupons for early membership, gift for family membership etc.
• Advertising: Frequent advertising on the center will be promoted at newspaper, radio, billboard, newsletters etc.
• Marketing research: Incur expenditure by 10% to improve knowledge of customer- decision-making process and to monitor competitor moves.

  • Systems: the management system has considered both manual and technological factors. ALC has arranged general meetings in order to sharing the views of employees and exchanging thoughts of teams. Moreover, ALC is fully equipped with IT facilities, which enhance the development procedure and encourage customers on the company. Now, lose of time and energy is being controlled by software infrastructural modification for meeting diversified and changed customer demands.
  • Shared Values: It is the central issues among McKinsey’s seven elements as it consists of three essential elements culture, believes and values. Culture is essential element to widen the sports and physical activities as behaviour of person varies for cultural. Therefore, ALC will take long-term projects to increase the participation levels within next 20 years. To reach their goals, ALC will be considered financial condition of people and age of interested groups. In this period, ALC will arrange school sports programme to encourage young generation.
  • Skills: To develop the employee’s performance it should have training facilities in organization but ALC has no separate training course though Gedling Leisure provides ongoing training support for development of employees. Loo R., and Thorpe K., (2002) has developed a study of reflective learning, where teamwork is difficult for conflicts between members and leader of the team. It can be managed partially by training, communicating between team and leader’s skills. Therefore, ALC should develop training courses to remove internal conflicts and to motivate the employees.
  • Style: Leadership is an important factor for Arnold Leisure Centre as leadership is an issue that consists of a great deal concerning changing people’s minds frequently in essential form. Leaders can take a strapping or restricted approach in clarifying the path to subordinates the way in which to go. To removing barrier of ALC, they may well polish the path or facilitate the follower to shifting the bigger blocks. In rising rewards, they possibly will provide intermittent encouragement even lay concrete on the way with gold. There are three leadership styles- ethnocentric, polycentric and geocentric; among them geocentric style is the ideal view for ALC. This view has the competency to control the accountability and transparency of the entire company. ALC has also considered the Path-Goal theory, which has developed to illustrate the technique that leaders persuade and support their followers to gain the goals in their prefixed path. Syque, (2007) argued that the term path-goal has derived from the belief that effective leaders clarify the path to help their employees to achieve their goals and to make journey along the path easier by reducing roadblocks.
  • Staffs: Arnold Leisure Centre has 100 efficient employees who are engaged in different sectors of leisure center, the chief executives officer control the employees of ALC. It should mention that the council has five leisure centres and ALC is one of these five centres so its staff allocation is not separate from other centre. Leisure facilities officer controlled the five leisure centre managers for five centres, community centre managers and business strategy officers, which have shown in following diagrams.

Structure of Arnold Leisure Centre

Arnold Leisure Centre has maintained the very high-levels of diversification as most of the business of the ALC is completely unrelated and less than 50% of the sales revenue is generates from dominant-business and there is no connection presents among businesses for example it has no connection in swimming facilities and bar facilities. Now, it should consider the organizational structure of Arnold Leisure Centre and it has followed strategic business unit (M-Form) which has been shown in the following figure. Arnold Leisure Centre should follow this organizational structure because here divisions within each Strategic-Business Unit mainly focus on the transferring core-competencies rather than on sharing assets & actions. Comparing to the other organizational structure it has also five major departments such as corporate R & D Lab, strategic planning, corporate HR, Corporate marketing and Corporate- Finance, however, these are illustrated & controlled by CEO or corporate-headquarters as well as both strategic controls & financial-controls are exercised in order to assess each department. Since ALC is highly differentiated in its own industry, it pursue the following functional structure –

From the above argument, it can be concluded that the structure of ALC is fit with its strategy because still now ALC is not fall in recession; they are successful to manage all business sectors by reducing costs and increase their profit from previous years though it was very low.

Porter’s five-force & Value-Chain Analysis

The Five Forces Analysis facilitate the vendors to difference a ready for action environment. This analysis has correspondence with further apparatus for environmental audit as well as PEST analysis.

Porter, M. E. (1998) introduced the Value-Chain Analysis answer the attack on his five forces analysis. However, the above figure shows the factors are affecting industry competitors as price is low- buyers bargaining power is poor. Threats of substitute are low as market is saturated and bargaining power with supplier is poor as they can switch towards in another way any time.

The Value Chain Analysis engenders the major capabilities and makes distinction of activities those constrain competitive benefit. Arnold Leisure Centre’s cost structure should be separated presuming that the cost variation of each behaves differently. In this figure demonstrates the five primary activities and four support activities, which has been considered for Porter’s strength determination.

Evaluation of Arnold life cycle

External factors turned an industry into an existing form and this form is continuously changed with change of time. Managers have to understand these changes throughout the sequential phase or stages of the industry life cycle as follow-

• Introduction or emergence: In this stage, technology of the ALC is not well developed but it had a large market because people were health conscious.
• Growth: For ALC’s life cycle, this is an exciting phase because ALC had to start fighting to survive, gain profitability, market share acquiring and build brand name.
• Shakeout: A large range of change has manipulated here. Factors of shakeout are- industry saturation, evaluate industry growth rate and radical change forced by competitive factors.
• Maturity: In this stage, ALC would breed to consider new factors. Aggregate marketing process determines success of the ALC.
• Decline: A new phase of evaluation is entered termed as decline. It is a great challenge for ALC competes as declining its position for recession.

Key Issues & Recommendation

Arnold Leisure centre handle with various customer services like, hiking, golfing, otherwise smooth easy card games swimming, meeting place for populace as well as learning opportunities with 17 years of successful service track record. In order to become more effective in operation, Arnold Leisure Centre should concentrate on the following issues –

• Employee of Arnold Leisure Centre should more attention to customers wants, team learning and multi-skilled. They should develop the relationship with the young generation to determine the demands of the customer.
• Building up of long-term customer lifetime values or CLV will be helpful to create community relationship.
• Though Arnold Leisure Centre is fully equipped but it should enhance its facilities such as it should change accommodation, arrange place for car parking and it should repair the damage of buildings.
• Motivation of employees is essential to widen new facilities and to remove existing problems,
• Consider consumers’ demand first and pay attention in market segmentation that should reflect on both income level and age limit.
• ALC can reduce expanses to overcome the global financial crisis and it should not cut the job of their employees.
• The most significant moral corruption can be observed the major payment of the top executives of the billionaire bankrupted firms so ALC should concentrate on issues of ethics and corporate social responsibility.
• It should evaluate and modify the present sports strategy in order to classify the key factors and demands and it will help to organize its strategy.
• It is essential to remove its barriers by developing team learning in ALC’s operation,
• The credit crunch and fall down of the US sub-prime money market as well as recession has been seriously injured the UK economy. CNN (2008) has been broadcasted that the finance minister of UK has seriously warned that Britain is now passing the worst financial situation for sixty years, moreover the present crisis will be more profound as well as long-lasting than estimated.

Conclusion

This essay has addressed the critical problems and drawn attention on the company’s recent position in recession, its strengths and weaknesses, along with several opportunities and threats. The economical and political factors are not favourable for Arnold Leisure Centre. The specific strategies that are suggested will be applied to achieve its goals and it can be predicted that ALC will be ever successful in strategic management issues with long run customer satisfaction. This paper would draws attention to analyze a number of aspects in environment, organizational structures, recession, selection and implementation of strategies and Key Issues.

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Footnotes

1. Office for National Statistics.