Productive Capacity And Demand Patterns Of Anytime Fitness – Analysis And Recommendations

Productive Capacity of Anytime Fitness

This report focuses on the capacity building of the of one of the branches of Anytime Australia Pvt. Ltd., namely Anytime Fitness situated in Melbourne, Australia in relation to the fluctuating demands of the customers of this branch (Anytime Fitness 2018). This report tries to focus on the productive capacity of the business and the demand patterns facing the firm.  Further, the reasons behind the demand patterns are studied to understand if the firm what strategies can be undertaken by the firm to cater to the changing demand patterns from the customers. Essentially, this report tries to understand the marketing strategies that Anytime Fitness as a firm can combine with operations to cater to changes in demand facing the firm.

Production capacity in general can be defined as the total volume of goods or output that can be obtained out of a production process (Acikgoz, Ali and Mert 2016). In the services industry in particular, the productive capacity refers to the amount of demand existing as per the demand existing on the part of the consumers(Lovelock and Patterson 2015). Every firm operating in the services industry has some components that together form the productive capacity of the firm as a whole. In case of the fitness industry existing in Australia, the major components of the productive capacity include the availability of the best forms of equipment and also trained professionals at the same time who can provide the best services to the customers. The same also applies for Anytime Fitness (FITNESS AUSTRALIA SUBMISSION INQUIRY INTO OBESITY IN AUSTRALIA 2018). In fact, for Anytime Fitness it is extremely crucial to hire only employees who are have the specialized skill and are in fact registered as health professionals in Australia. Apart from expanding the gym area and using equipment that will produce improved results in lesser time, the firm has been using the best fit o employees to cater to the fluctuating demands of the customers.

Most studies assert that productive capacity of a firm is determined as well as limited by the four factors of time, labor, land and capital (Delivering and Performing service 2018). If all these components are studied in detail, pertaining to the productive capacity of Anytime Fitness, it is observed that it has no constraint in terms of time, as it is open 24 hours. In terms of labor there have been fluctuations in the amount of labor employed, but this has been in sync with the changing demands of the customers. The Melbourne branch of Anytime Fitness is also advanced as mentioned above in terms of gym equipment with the optimal space requirements and all the four components mentioned above are used to the maximum level for generating the highest amounts of profit. In fact Anytime Fitness is reported to be one of the best firms operating in the fitness industry with each store or branch including the one at Melbourne spacious enough to focus individualized attention on every member.

The very linkage of demand and capacity of any firm establishes the concept of patterns of demand. It is important to note in this regard that the overall level of demand for any firm decide its working capacity (Klassen and Rohleder 2001). Further, the following points are very important in determining the demand patterns for any firm.

• The amount and speed of fluctuation of the demand from the customers
• The extent of unpredictability that a particular industry as a whole is exposed to
• The extent to which the capacity is present in excess of the existing demand from the customers
• The extent to which the capacity of a firm is in excess of the minimum demand facing the firm

Demand Facing Anytime Fitness

Due to the various options provided by the firm, the number of customers has always been high from the very beginning (Anytime Fitness 2018). However, due to various reasons like changing market conditions and changing demand patterns of consumers, the demand patterns to which the firm has to cater to also change. Anytime Fitness has a total of three million customers all over the world (Get to a Healthier Place, 2018). Primarily there are around a total of 8000 customers for the different branches of Anytime Fitness in Australia with over 800 customers belonging to the Melbourne branch.

The most important method followed to understand the demand patterns of Anytime Fitness, the concept of Segmentation is used (Park et al. 2018). It is important for Anytime Fitness to understand and analyze what portion of the total number of customers is responsible for creating the greatest amounts of demand. In this context, the firm has been very efficient in capturing almost the entire population of gym goers as their loyal customers. The age group of the customers also varies widely giving rise to more or less fluctuating demand patterns.

Further, the high number of success stories reveals that the amount of unpredictability too is very less. This is so because the option of the large amounts of personalization and customizations provided by the firm to each and every customer causes most of the customers to end up as long term customers. However, in the past few years, the number of individuals in the age group of twenty to sixty four years has substantially increasing causing an increase in the amount of demand (Ibisworld.com 2018).

Over the years, the amount of population pertaining to maintaining health and fitness will also gradually increase causing an increase in the amount of demand. Accordingly, the firm will have to use strategies to increase the amount of capacity that it is currently using or exploiting.

So to summarize the demand patterns facing the firm the following points can be asserted:

• Firstly, in the initial years, the firm faced fluctuations in terms of the number of customers as they were most customers who were not here for the longer run (loyal customers)
• Secondly, in this current year since the month of January, Anytime Fitness has been able to secure loyal customers and this in turn caused them to face demand fluctuations
• Over the past few years, the number of people in the age group of twenty to sixty years have increased causing an increase in demand again
• Finally the number of health conscious customers is also ever increasing which also bolsters the increase in demand
• Further, even though demand can be estimated to fall because of the increasing number of competitors in this industry, the number of customers will always compensate for this loss and so will the brand value of Anytime Fitness

Thus, in the subsequent sections we study the different types of strategies that the firm employs or can employ to alter the levels of demand facing the firm and the amounts of capacity of the firm existing that can be utilized to greater possible extents.

In order to cope up to the conditions of fluctuating demand with increasing or decreasing capacity. Every firm has to undertake a few strategies (Delivering and Performing service 2018). These strategies are more or less the same for every firm depending upon the industry in which it is operating currently. These strategies essentially help the firm to better organize the four constraints of land, labor, capital and time in order to utilize the optimal capacities to the maximum possible extent depending upon the existing demand patterns.  Few of these strategies are discussed in detail as follows:

• Capacity Expansion-  Australia Fitness tries to cater to the increasing demands by expanding capacity not only in terms of availability of space but also adding features like new forms of routines or equipments or even exercises. This not only helps to cater to the increasing demands but also helps in increasing variety of services provided. Further, the availability of the number of trainers along with the distribution of their essential responsibilities throughout the day are also altered according to the increasing or decreasing demands for any particular service provided by Australia Fitness.
• Capacity Upgrades- Further, to cater to the existing and increasing demands, the technology and the innovation level used in the equipments or exercises used, is improvised so that the same results can be obtained in lesser amounts of time. This method enables most firms to cater to increasing demands primarily.
• Use of Smart Devices and Data Analysis: The installation and use of smart devices for collection, evaluation and analysis of data related to the existing levels of demand in the industry helps to estimate in prior to what level approximately the demand might increase or decrease and helps the firm to manage inventories accordingly. This method is applied by the firm at the global level as well as for the individual branches including the Melbourne branch.
• Providing Information about the Potential Waiting Times: The firm also uses the concept of initiating the customers and clients about the availabilities of slots and the duration of the different routines so that there is better catering to the demands according to the time preferences of the customers. This provides a prior clarity to both the managers as well as the clients and help in providing smooth and consistent services to the customers even during changing demand levels.

The methods used to manage demand according to capacity changes  is even more crucial and difficult to manage as compared to altering capacity based on changes in demand. For such circumstances too a number of strategies are used by the firm and a few of them employed and put to use by Anytime Fitness are mentioned below:

• Changing Price Levels: Anytime Fitness uses the concept of changing price levels in relation to the amount of capacity available and the extent to which the existing should be exploited to reach maximum levels of revenue generation.  In times of increased capacity in terms of time, land or labor, he firm reduces the price and this in turn helps in attracting larger numbers of customers. On the other hand, in the face of reduced demand, the prices are increased to keep the demand levels in check.
• Promoting and Marketing Underutilized forms of services:  This option is only used by Anytime Fitness under situations or circumstances wherein there is increased capacity but not equally existing demand from the clients and the customers. This strategy in particular greatly helps to increase the amounts of syncing of capacity and demand for the firm.

Even though the firm under study has sufficiently and efficiently been able to utilize maximum capacity to generate high amounts of revenue over the years and keep the levels of demand and capacity in sync with each other, there will still be fluctuations in demand. Apart from the strategies mentioned above, there are other ways to cater for this change which include scheduling the training and holidays of the professional employees at the gym according to the anticipated changes in demand over the year, continuously maintaining and renovating the existing infrastructure and equipments used, maintaining substantial amounts f inventories in case of emergencies and cross training employees or outsourcing employees in case of high existing demands and low capacity in terms of labor especially. In cases of high demand again Anytime Fitness can also avail the option of renting equipments and other small facilities in case of high amounts of unprecedented demands.

Conclusion

In order to conclude, it can be asserted that Anytime Fitness located at Melbourne being a branch of pone of the best firms in the fitness industry is exposed to mostly increasing trends of demand and caters to a large section of the Australian population in the age group of twenty to sixty. It employs some of the simple and widely used strategies to change the capacity levels along with the demand levels posed by the clients and vice versa.

References

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