CASE STUDY: “Temple Inc.”

Company History:

Alana Temple had always wanted to own a gym. It began when she was 15 years old and started her own fitness class in her backyard. By the end of the first month, she had 20 people who attended her class twice a week and had several requests for additional classes. After graduating from high school, Alana attended the University of Toronto and earned a degree in kinesiology. She did several additional programs and became qualified as a personal trainer, and worked at various gyms to gain experience. After five years and a substantial loan from the bank and her family, Alana opened her own fitness centre in Mississauga in 2010. Playing on her own last name and the phrase, “Your body is a temple,” she named her gym Temple Fitness.

Current Operations

By 2015, Alana’s establishment had grown substantially. Her original gym Temple Fitness had been a success since its start. She decided to branch out by offering additional services within the health club, and later opening a second location called Work It Girl. This club was significantly smaller but for women only. Within Temple Fitness, she added a full-service spa called Zen and personal trainers for private sessions are available at both clubs. A breakdown of revenues for each club and service can be seen in Exhibit A.

Alana was able to run all of the operations under one company called Temple Inc. Most employees and trainers could be assigned to work at either club, whereas the Zen employees were specially hired and trained to work only in the spa. Each health club had two senior managers and several assistant managers who were in charge of one specific area/operation: Spa, personal training, administration. Alana kept the title of President and CEO, and hired people for the roles of VP of Finance and VP of Sales and Marketing. Alana personally took care of the clubs’ operations and hiring. The management was a tightly knit group who enjoyed working together and solving problems that arose as a team. They meet biweekly to discuss the company’s operations and the upcoming goals.

Alana takes pride in her company and her staff. She insists on hiring each employee herself so that she can be sure of the person’s commitment and fit with the company, and her ability to explain the vision and direction of Temple Inc. She spends most of her days in either Temple Fitness or Work It Girl and has an office in both locations. Employees are welcome to chat with her informally and share their ideas. Recently an employee has suggested they expand their services to include specialized fitness classes such as Hot Yoga and dance; these classes would be available for an additional fee. Alana knows that many of her competitors offer similar classes and believes that her clients would be interested in taking them. In consultation with her managers, she has decided to remodel the change room areas and build a specialized room for these classes. She has also promoted the employee who came up with the idea to assistant manager. She hopes to have the remodel complete and instructors hired within 3 months.

Exhibit A: Revenues – all numbers are in the 1000’s

Club
Service
2015
2016
2017
2018
Temple Fitness
Membership
4300
4200
5400
5500
Personal Training
220
215
210
185
Zen Spa
135
140
160
155
Work It Girl
Membership
2000
2200
2700
2500
Personal Training
190
275
400
480

Create a mission statement for Temple Inc. Explain why you think it is an appropriate one for the company.

Analyze the strengths and weaknesses of Temple Inc. (Chart format in point form ok)

Analyze the environment Temple Inc. is operating in (e. g. opportunities and threats / PEST analysis). (Chart format in point form ok)

Describe if Temple Inc. is in an attractive or unattractive industry by doing a competitive industry analysis using Porter’s Five Forces Model. (Chart format in point form ok)

Grand Strategies – explain your answers.

Identify the grand strategy that Alana is considering (i. e. Stability, Growth, Renewal, or Combination). Give evidence from the case.
Do you agree or disagree with this strategy? Explain.
What other strategy would you recommend to Alana? Explain your answer. Can you incorporate the BCG matrix into your answer?
What type of contingency planning should Alana consider?

What success criteria should be used to determine if the objectives are being met?