Strategy After the Takeover: DW Fitness and Fitness First
The integration process between two businesses following a takeover is crucial to making a success of an external growth strategy. How is the management of DW Fitness dealing with the challenges of integrating dozens of Fitness First clubs it acquired in 2016?
This superb article from Health Club Management (a pdf can be downloaded here - with my annotations) features an interview with the executives given responsibility for combining two large portfolios of fitness clubs.
It is packed with really useful A Level Business context and is particularly useful for Edexcel students exploring the UK Health & Fitness industry.
Some key points I spotted include:
- The two brands (DW Fitness and Fitness First) are to be retained. Fitness First will have a strong geographical focus based on London (for example there are already 20 Fitness First clubs in th City of London alone) whereas DW Fitness will operate everywhere else.
- Although the combined business now has national scale, the aim is not to become the largest operator of fitness clubs in the UK (the current market leader is Pure Gym). Instead, the aim is to be the "best".
- The management admit that both brands had become sidetracked by the rapid growth of low-cost operators like Pure Gym, The Gym Group and Exercise4Less. They now believe that the best way to remain competitive is not to copy the low-cost model, but to differentiate their product, for example by encouraging a sense of community
- The competitive threat from "Boutique Clubs" (particularly in London) is recognised