What generic strategies do private fitness centres implement and what are their impacts on financial performance?

Abstract

PurposeThe purpose of this paper is to identify the strategies that private fitness centres implement and to evaluate their impact on financial performance.Design/methodology/approachBased upon a sample of 151 private fitness centres in Portugal, multivariate statistics report the implemented strategies and their effect on financial performance. We applied exploratory factorial analysis as our methodology to identify the types of strategy and the ANOVA in order to verify if there are differences of financial performance in the strategies.FindingsThe results obtained demonstrate how private fitness centres implement different strategies, including: cost leadership, differentiation, focus, quality of service, combined and stuck in the middle approaches. The relationship between strategies and financial performance, private fitness centres adopting a cost leadership strategy obtain the best financial performance levels in terms of the sales variable relative to any other strategy but with the combined strategy returning a better performance in terms of the return on assets when compared with the cost leadership strategy.Originality/valueThe originality of this paper stems from its identification of the strategies implemented by private fitness centres, thus, just what type of strategies are in effect across the fitness industry: leadership through cost, differentiation or a focused strategy. However, in addition to ascertaining just which strategies undergo implementation, it is also pertinent in determining just which strategy drives the best financial performance for private fitness centres given that private centres may only remain in the market when achieving financial sustainability. Therefore, this paper seeks to provide information for managers as regards the strategies implemented and their impacts on the financial performance of private fitness centres.