Can Transition Expand without losing its elite aura?

1. Can Transition expand
without losing its elite aura?
Submitted To: Submitted By:
Hitesh Jhanji Sir Manpreet Kaur(11404239)
Rimaljeet Kaur(
Angadbir Singh(11410838)
Gurpreet Singh(11401770)
Gourav(11402270)

2. TRANSITION
First ULTRAPREMIUM health club
Opened in 1980-81
25,000-square-foot facility
Staffed at - full time 14
Members - 2300(Initial)
Services available globally

3. TARGETS

4. FEELING OF
UNSETTLEMENT
•Operating expenses continued to rise
•Sales growth flattened
•Transition’s membership was aging
•Deliberately created high-cost facilities

5. CONTINUED.....
•Rising Competitors –
 Clarkhouse, a top-rated hotel chain
 Manhattan-based Fitworth health club chain.
•Ambassador hotels had approached with a
proposal to carry the Transition clubs at its
locations worldwide

6. MANAGEMENT DISCUSSION
Gordon proposed:
 Drop annual fee and instead charge a
one-time initiation fee
With a corporate discount and package
pricing for various services
Go down a notch-Transition name at
Ambassador hotels
Opening Transition satellite spas at
certain corporate headquarters

7. MANAGEMENT’S
RESPONSES
Scott Conner ( Director of sales and
marketing )
•We can’t offer less; we can’t sell less.
•Core strategy is undermined
Kim Cole(Company’s number one sales
associate)
• We’ll lose our marketing edge
• Would Tiffany sell a cheap line of jewelry at a
department store boutique?

8. DISCUSSION
CONTINUED….
Frank Casale (Transition’s director of
operations and facilities)
•If they don’t grow, it’ll be a real squeeze
•The budget keeps growing, and the only way to
maintain quality facilities is by growing revenues
•Expansion- broadening their niche

9. EXPERT COMMENTS

10. WILLIAM CAMPBELL
(pricing strategy)
Price discounting – limited context
High risk maneuver
Targeting non-candidates
Flanker strategy
Low risk plan

11. ROBERT J. DOLAN
(importance of value
consciousness)
Cost cutting not the only option
Core aspect – better quality
More facilities at a single rate
No issues regarding payment options
Targeted at a specific set of select groups

12. ANITA K. HERSH
(brand identity strategy)
Opportunity to explore & expand
Branding – way to communicate
Innovative ideas to win new customer
Prominent example - Mercedes(C class)
Introducing new related products

13. PETER H. FARQUHAR
( Brand renewal strategy)
Idea of opening corporate satellite Transition spas as
most promising one
Rejuvenate the brand
Leapfrogging competitive offerings
 Building a bridge brand

14. DAVID AAKER
(Downscale move Strategy)
Introduce horizontal product extensions
Enhancing the company’s service offering
 Develop concept for a downscale club
o qualitatively different
ono overlap with Gordon’s current target
ocreate a brand personality for the new offering

15. MARY SHELMAN
(Brand expansion)
Moving down market will put pressure on
Gordon’s current pricing structure
Importance of exclusivity as a product attribute
Develop a separate, complementary chain
Expansion-signal a change in the company’s core
strategy

16. CONCLUSION
The changes Gordon proposes are not as
simple as a new product offering: they
signal a change in the company’s core
strategy. Ultimately, tailoring the pricing,
partnering with another company, and
even opening satellite corporate locations
could be good ideas, as long as Gordon is
clear about his objectives before he
makes a move.