National Indoor Athletics Center

Introduction

The National Indoor Athletics Centre (NIAC) is based at Cardiff Metropolitan, and it has been lauded as the home of Welsh Athletics. It was the first purpose-built indoor athletics track in the UK. NIAC was selected as the case study organization for investigation and analysis. The investigation and analysis will cover the aims, objectives and the key purpose of NIAC, the market and competitive environment, the key external influences, competitive analysis the current portfolio of products and/or services as well as the key internal business capabilities. This analysis will include insights relevant for business dissertation help. The second section of the paper will be an evaluation and recommendations section, which will be based on the SWOT analysis of NIAC.

The key aim of NIAC is to be an indoor athletics track in the UK. To meet that purpose a number of facilities have been built: a full competition 200m banked track; a 9 lane 60m straight; a separate 6 lane 140m straight; competition and training Long and Triple jump pits; competition and training Pole Vault pits; a competition and training High Jump pit; training nets for all the throwing events; a full equipped biomechanics laboratory; a Sports Medicine/Physiotherapy treatment area; an athletics only weight training area and a strength and conditioning (Cardiff Metropolitan University 2019). The vision of NIAC is “In support of its aspiration to be a top-10 new University, Cardiff Metropolitan University will be renowned for the quality of its competitive sports environment, the recreational opportunities on offer to its students and its contribution to community sport” (Cardiff Metropolitan University 2019). Its mission is, “To enhance the student experience in all facets of non-academic sport in Cardiff Met” (Cardiff Metropolitan University 2019). In relation to its vision and mission, NIAC has a number of objectives which include but are not limited to: to promote health and wellbeing; to promote excellence; to enhance the external profile of the organization and to generate income for reinvestment into Cardiff Met Sport.

The Market

NIAC was built with competitive students in mind. However, the scope of the target has increased since NIAC decided to not only target students but also staff, and the general public of all ages and from all walks of life. As such, they are basically in the fitness industry, which is a very big industry that encompasses a very big market. Hill (2018) notes that that the UK fitness is worth £5 billion as of 2018, and that figure is expected to continue to grow. According to Walker (2018), notes that as of 2018, the market penetration was at 15% where one in every seven individuals has a gym membership. Moreover, the number of fitness facilities increased by 4.6% in 2018, with 275 new centers being opened (Walker 2018). In relation to specific running tracks, NIAC is considered to have one of the best tracks in the UK. Ward (2017) notes that NIAC is the 8th best running track in the UK. The other tracks that were placed before it is bigger have been in existence for a longer time, and they can host more people. For example, the Manchester Regional Arena in Manchester has an 8 lane 400m track and an outside 4 lane 200m track as well as an 8 lane 60m sprint track (Ward 2017). Additionally, the track can host more than 6,500 spectators while NICA has a sitting capacity of 690 spectators. However, NICA is still one of the best, and it has made a name for itself.

Competitive Environment: Porter’s Five Forces Analysis

The competitive environment will be evaluated using Porter’s Five Forces analysis. Chartered Global Management Accountant (2019) notes that Porter’s Five Forces was developed as a simple manner of evaluating the competitive strength and position of a business organization. The theory argues that there are five forces that determine the intensity of competition as well as the attractiveness of a given industry.

The threat of New Entrants

It is relatively easy for new entrants to break into the fitness industry. As noted by Walker (2018) in 2018, more than 275 fitness centers were opened in the UK. This shows that it is relatively easier for new entrants to get into the market. As such, the threat of new entrants is very strong.

Bargaining Power of Suppliers

The fitness industry has many suppliers. Whilst, there are many suppliers, the number of suppliers that are trusted is very few. Therefore, the bargaining power of suppliers is moderate. However, organizations like NICA tend to have one supplier from whom they get all their sports equipment. Given the fact that they can get the same equipment from other suppliers reduces the bargaining power of suppliers.

Bargaining Power of Buyers

The bargaining power of buyers is high due to the availability of substitute products and services. Clients want to get the best experience at the lowest price possible. Bargaining power of buyers is strong because all fitness industries tend to target the same people. In relation to NICA, they have an edge given the fact that the majority of their clients are students at Cardiff Metropolitan.

Threats of Substitute Products or Services

The threat of substitute products and/or services is very strong. There are very many fitness centers from which clients can get their needs met. Due to the high threat of substitute products or services, organizations have to seek a competitive advantage, and that may come in the form of offering a unique product or service or offering a relatively lower price.

Rivalry Among the Existing Competitors

The rivalry among the existing competitors is very strong. The rivalry is strong since the organizations tend to target the same clientele as well as offer the same substitute products and/or services. The stiff competition eats at the profits of many organizations in the industry and affects the long-term profitability of many organizations in the industry.

PEST Analysis

PEST analysis is used to asses the key external influences of any given industry. The considered key influences are political, economic, social, and technological.

Political

The political environment of the UK is a bit charged currently due to the ongoing process of Brexit. Lefevre (2016) notes that Brexit destabilized the fitness industry since it affects the jobs of very many people in the industry. The fact that the process has yet to be completed means that the industry is relatively unstable and might return to equilibrium only after the process is completed.

Economic

The economic environment in the UK also affects the fitness industry. Dickins (2017) notes that household incomes in Wales are the lowest in the UK nations. Since the Brexit industry, the economy has been on a downturn which has translated in a lower disposable income for citizens, which means that many potential customers do not have money to spend on a fitness center. Therefore, the general economic environment is affecting the fitness industry.

Social

The social environment in the UK is encouraging to the fitness industry. The social environment affects the fitness industry in a positive manner because there is a growing demand for gyms and fitness centers (Walker 2018). As such, the social environment contributes to the fitness industry in a positive manner.

Technology

The technological environment also contributes positively to the fitness industry. Midgley (2018) notes that one of the reasons that the fitness industry is booming is due to technological growth in the form of wearable fitness technology accessories and online fitness coaching. Technology helps in streamlining the offering of services/products, which in turn has positive effects on the growth of the industry.

Current Portfolio of Products and/or Services

The specific target clientele for NIAC is the students at Cardiff Metropolitan. The student is the main target market since they still attend the university, which means that they will seek a fitness center that is next to them. NIAC will fill in that role. To appeal to students, all Cardiff Met students are given a free one-year membership where they have access to all the facilities offered at NIAC (Cardiff Metropolitan University 2019). The only services that they pay for are the physiotherapy and the massage treatments for which they receive discounted rates. While the key target is the Cardiff Met student, NIAC also targets the Cardiff Met staff and also opens up to the public, which means that they have a very diverse group of clients. There are a number of products and/or services that NIAC offers. It offers student sport, children’s sport, sports medicine, sports facilities, fitness classes, fitness assessments, strength, and conditioning as well as sports development (Cardiff Metropolitan University 2019). Using the Boston Consulting Group’s (BCG) product portfolio matrix, one can surmise the products and/or services that the organization should concentrate on. Hanlon (2018) notes that the BCG matrix is designed to help with long-term strategic planning by aiding an organization in reviewing its portfolio. The star of the portfolio is the indoor arena, which is a state-of-the-art facility. The problem child is the physiotherapy and that massage treatment services and center. The cash cow of the portfolio is the fitness facilities that they offer to the general public. The dog is children’s sports because few children have enrolled at NIAC. The facilities help to generate more income for the company, and that is why they are the star product. The range of products and services that they offer shows the commitment that the organization has to become an all-rounded fitness facility.

Internal Business Capabilities

The organization is structured in a top-down manner. At the top of the hierarchy is the director and the deputy director. Then there is the operations team that is comprised of six individuals. There is the administration and reception team that is made up of six individuals. There is the sports development team that is made up of one key individual as well as other subordinates. There is the fitness team that is made up of the fitness manager and the fitness instructor as well as other subordinates. There is the strength and conditioning team that is made up of the strength and conditioning manager together with their assistant. Each specific department is run by a manager who is a professional in their field, which means that they have autonomy of decision. Major decisions are made by the directors.

Section 2: Evaluation and Recommendations

The second section revolves around evaluation and recommendation. The tool that will be applied for this section is the SWOT analysis. Fallon (2018) notes that the SWOT analysis is a tool that helps organizations become fully aware of the factors involved when making decisions. SWOT stands for strengths, weaknesses, opportunities, and threats, and it allows an organization to overcome challenges and determine where they should invest in.

SWOT Analysis

Strengths

NIAC has various strengths that work in favor of the organization. The fact that it is considered to have one of the best indoor athletics tracks is a major advantage. It was the first purpose-built indoor athletics track in the UK, and it has been rated to be one of the best indoor arenas in the UK. As such, the organization has a strong reputation and strong brand awareness. Goodson (2012) notes that brand awareness is very important for an organization since it conveys credibility and informs the clients of the experience that they should expect from the company. Clients who enroll at NIAC or seek to access their products and services will know that they will be accessing state of the art facilities as well as products and services. Another key strength lies in the organizational structure. The organization’s structure is divisional. Alton (2017) notes that in a divisional organizational structure, the leadership of the company is structured in relation to different products and/or services. In the case of NIAC, the leadership is divided based on the different fitness components such as strength and conditioning, sports medicine, student sports, and children sports. The divisional organization structure works in the fitness industry since the different aspects of fitness require an individual that is well versed in that aspect. As such, each fitness division has an expert as the manager, which is a major strength for the organization. Therefore, strong brand awareness and credibility, as well as the divisional organizational structure, are major strengths for the organization.

Weakness

There are various weaknesses that can be noted in NIAC. Key weakness lies in the sitting capacity of its indoor arena. The indoor arena can only sit 690 spectators, which means that the arena cannot be used to host major sports competitions due to its lack of sitting capacity. Conversely, its outdoor areas may be used, but sitting capacity will also be an issue. Another key weakness revolves in the prices that it charges for the use of the facilities. For Cardiff Met Student’s they get one year free. If all the students who use the facilities paid a modest sum of £10, it would go a long way in helping to generate funds for the organization. One of the objectives of the organization is, “to generate income for reinvestment into Cardiff Met Sport from the commercial operations & fundraising activities” (Cardiff Metropolitan University 2019). In failing to charge students even a modest fee, they are missing out on an opportunity of generating funds for the organization. Additionally, having Cardiff Metropolitan University students as the key clientele is a gross oversight for the organization. The issue lies in the fact that students rarely have enough disposable income to spend at a fitness center, let alone survive in the university. Therefore, in terms of selecting their key clientele, the organization has erred, and it should consider shifting its key target personnel.

Opportunities

The organization has a number of opportunities. A key opportunity is that the fitness center can target the young working professional between 25 years and 30 years. Adams (2019) notes that it is important for an organization to aim at a market segment that is profitable in the sense that they have more disposable income. The working professional between 25-30 years has significantly more income than an individual who is in the university. Since they have more disposable income, it would be important to target them since they have enough money to spare for fitness purposes. As such, making the 25-30-year-old professional the primary target clientele is a great opportunity. Another opportunity lies in the form of online fitness coaching. Laidler (2017) notes that the popularity of online personal training is increasing rapidly. Majority of the 20-30-year-old professionals may not have the time to go to a fitness center. Giving them a customized program that they can perform at home or when they have access to a fitness center is a great opportunity. Additionally, online marketing is also another opportunity that should be seized. Kaplan (2019) notes that digital marketing is an avenue that all businesses should explore more so in the 21st Century. Majority of modern individuals tend to spend a lot of their time online. Therefore, a business should create authentic content that will reach those people. NIAC has an opportunity to expand its clientele through the use of digital marketing.

Threats

There is a number of threats that may affect NIAC. The key threat lies in the ongoing Brexit deal. Brexit is affecting every industry, including the fitness industry (Lefevre 2016). The deal is expected to be wrapped up by June at which point the industry may stabilize or it may continue to spiral. The deal may increase the cost of doing business, which means that NIAC will have to pass the burden of the cost to their customers, which may cause the clients to seek another cheaper option. Another threat is in the form of their competition. There is stiff competition in the fitness industry due to the existence of substitute products and services. Moreover, the threat of new entrants is very high since the initial capital required is not high. Therefore, while growth in the industry is tremendous, the fear of new entrants abounds in the market.

Conclusion

The National Indoor Athletics Centre (NIAC) is based at Cardiff Metropolitan University. It is part of the fitness industry, which is considered to be a billion-pound industry that continues to grow as more people seek to live a healthy and fit lifestyle. NIAC seems to have established a foothold in the industry, given its diverse clientele and the credible brand that they have created for themselves. There are a number of opportunities that the organization can seize upon to enable it to continue to thrive in the market.

References

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