Bally Fitness

OVERVIEW Obesity is a serious problem in the States where, as of 2004, two out of every three adults were classified advertisement as obese (Wells, 2006). In response to this alarming fact, the US Surgeon Generals office has voiced its irritation about the effects of obesity. With such a highly air campaign against obesity, Ameri bunss have become increasingly- health conscious, driving growth in a variety of industries including the health club effort. During the ten form period from 1995 and including 2004, the health club industry saw an attach of 113% in the number of clubs, and in 2004 alone, industry-wide revenues totaled $ 14.1 billion (Wells 2006). other key factor that has led to this growth in this industry is the increase in members under the age of 18, which doubled between 1993 and 2003, and the increase in members oer the age of 55, which increased 273% over the same period (Wells, 2006). BASIC ECONOMICS From industry data (Wells, 2006), it earth-closet be deduced that since 2000, the demand for health clubs is increasing on bonnie at 6.3% and the supply of health clubs is increasing on average at 11.8%. This sizable increase in the number of health clubs is due to the fact that new competitors can easily hire in the market.

The threat of new entrants is high because although supply side economies of carapace do exist, there are mechanisms in place that append a new entrant means to overcome the advantage. adept example is that braggart(a) firms would require more equipment to fill their larger facilities, thereby incurring a greater cost, but be able to spread that cost over a greater number of patrons. However, smaller firms can overcome the issue by leasing smaller spaces with few amenities and, instead of making large capital expenditures for equipment, buy used equipment for a discount or lease new equipment. A small operator can open a club with $ 25,000 to $ 35,000 investment (Wells, 2006). On the demand-side, benefits of scale of measurement do exist but to a lesser... If you want to get a full essay, order it on our website: Orderessay

Order your essay at Orderessay and get a 100% original and high-quality custom paper within the required time frame.