In my gyms why aren't the ones that should succeed not succeeding?

List of forums -> Questions and answers. Help. -> In my gyms why aren't the ones that should succeed not succeeding?

Here you can learn from the interaction between experienced businessmen and young entrepreneurs. You are welcome to place your questions related to our business simulation game and get the answers from experienced players

Topic:

Topic created : 27.04.2020, 09:36

brandenleeyang

When i invested a lot in my other companies that should succeed because the market is higher and there is less competition, it doesn't give as much sales as the ones with higher competition and even higher markets.

Page:
1

Message list:

6.05.2020, 06:54

orbiter

I've looked at your subdivisions. Here are the reasons for your low profits:

1. You have 8 1000m2 fitness centers in Cape Town, all in the city center, and all of the same specialization (Sports Activities for all ages). That is likely why your "uniqueness of the service" level is "Very low".

2. The popularity of your fitness centers are all very low (< 4.5), which means that you will not attract as many customers. For comparison, most of your competitors in Cape Town have popularity > 100.

3. Your equipment quality is 12.18, and your staff qualification is 9.67. This is lower than your competitors, resulting in a "Normal" service level.

4. You are charging a much higher price than your competitors who have better quality equipment. You are charging $1000 when your competitors with double or quadruple your equipment quality are charging less than that. The market leader is charging $280 for 27.07 in equipment quality and 4.62 in staff quality.

5. Generally speaking, the fitness service industry is not very profitable.

Suggestion: Due to the low profitability of the service sector, I would suggest getting into retail. You can start by selling cheap food or grocery in a low saturation market at a high markup. Do your research using Analytics > Market analysis > "City retail" to find low saturation markets.

9.05.2020, 10:35

Last time edited : 9.05.2020, 10:36

orbiter

I've looked at your company again. I noticed that you are profitable with ~$320,000 in revenues and ~$110,000 in profit from 8 subdivisions (all fitness centers in Cape Town).

However, I still advise that you expand into retail. Reasons:

* Retail is substantially more profitable than the fitness service sector. There are lots of low saturation markets to exploit.
* Retail is more scalable (it doesn't take much to retail a new product in your existing store).
* Retail is more flexible (you can adjust quality/brand of the retailed goods fairly quickly by just changing suppliers).
* Retail allows you to have a guaranteed sales channel for the products you produce in your own factory (should you choose to do so in the future). This is a good way to get into producing your own goods, and to increase your production qualification.
* Retail's larger profits allow you to spend on advertising. This is a good way to increase advertising qualification.

11.05.2020, 01:25. Subject: I re-did my fitness

brandenleeyang

No im not talking about cape town, im talking about south africa's city profits. Think of it as city 1 and city 2. If i pick city 1 and it has the biggest markets and the least competition, it wouldn't pay as much money as to city 2 which has a small market and the most competition

12.05.2020, 22:19

Last time edited : 12.05.2020, 22:19

Geniticer

Geniticer Incorporated

G Invest

Geniticer International

Maybe you should just stick to having 1 gym in 1 city so the other one does not interfere with the other one??

so instead off having more than 1 one in cape town try split up and add 1 in each city of south africa instead. I am quite sure your income/revenue would improve, service level would be probably high, service level: high/low. depending on the average level of qualification levels and equipment levels on that particular city or other sellers in that city. Your better off just having 1 gym in each city.

Yes, you are upto something with that last post you came up with. The more devoloped the market is the higher the quality of product and if there is competition ( Higher equipment and qualification levels are needed) and the higher the price you can take for services. But, if the market volum is high but competition is low. You still have an high chance of having higher revenue on that empty market.

13.05.2020, 12:05

orbiter

If not mistaken, the city's wealth level also plays a role in determining the demand of fitness centers.

List of forums -> Questions and answers. Help.-> In my gyms why aren't the ones that should succeed not succeeding?

Page:
1

Create your dream company in the global economy game!

List of forums -> Questions and answers. Help. -> In my gyms why aren't the ones that should succeed not succeeding?

List of forums -> Questions and answers. Help.-> In my gyms why aren't the ones that should succeed not succeeding?