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Striders : Running Away or Towards the Growth (Group 8)

Problem Statement: The founders of Striders, a fitness and running club headquartered in Mumbai
are in a dilemma. Given the growing fitness industry, excellent brand equity and well-wishers who
are willing to invest heavily, how should the striders proceed with their expansion plan?

Analysis :

1. Growing industry: According to reports, the fitness industry would be around Rs 7 billion by
2017 and with a high projected growth rate of 22-27 percent in the next five years. However
the market was highly fragmented and unorganised. As the industry was in a nascent stage
with many untapped customers and Striders had excellent brand equity there was scope for
expansion.
2. Excellent customer satisfaction and brand equity : Striders were either retail or corporate
members who were loyal due to the process and structure of the training. The members due
to the excellent training ran full marathon, half marathon and ultra-marathons which
motivated them to renew their memberships. The personal touch offered and group
dynamics encouraged the members to continue with the training.
3. Increasing focus towards healthy living and fitness as well as growing disposable income
were favourable factors for a business with strong fundamentals like Striders to grow and
expand.
4. Multiple Sources of revenue: Striders provided general fitness and functional training to
corporate as well as retail clients. They also organised one-time sporting events like
marathons which formed their biggest revenue stream (80 percent ). Striders should
diversify and reduce dependence on a single revenue stream.
5. Competitors: The direct competitors are reputed sporting event organisers and running
groups which are either sporting goods manufacture led (like Nike and Reebok ) or paid
running groups such Running for life. Independent gyms accounted for 70 percent of the
market and fitness apps posed as indirect competitors

Recommendations:

1. Striders should diversify and expand slowly ensuring their process and structure of trainings
remains the same. They should make sure the spirit of being a close unit and personal touch
does not dilute.
2. Currently Striders members are middle aged professionals between 30 to 50 years age. They
can also target senior citizens and millennials who are interested in running marathons and
improving their fitness through yoga, exercise and introducing more fitness formats.
3. They should focus on marketing and promotional activities to increase the member base and
tap the growing market. Currently there is only word of mouth publicity which is getting
them new members.
4. Currently they have low cash and bank balances to take any new initiatives in the year. They
need to get more investments to expand and ensure they have sufficient cash balance.
5. The investment offer should only be accepted such that the managerial and decision making
power remains with Uchil and Londhe only.
6. Striders should try to have more number of retail members in centres outside of Mumbai.
They should secure long term contracts with corporates who organise marathons in order to
diversify the revenue dependence on event management.

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