Business Strategy

Five Force Model

"Porter’s five forces model explains five competitive forces that determine industry profitability: bargaining power of customers, threat of substitutes, bargaining power of suppliers, threat of new entrants, and rivalry among existing firms." The intensity of each of the five forces determines the characteristic of the industry, how profitable it is, and how sustainable that profitability will be.

Using the Five Forces Model created by Michael Porter, John at Gaglione Strength is able to understand the competitiveness of his business environment and identify a strategy for potential profitability.

Bargaining Power of Customers

Bargaining Power of Customers refers to the inverse relationship of the number of customers and how significant each customers is. The pressure that consumers, in this case it would be training clients can exert on businesses to get them to provide higher quality products, better customer service and lower prices. How much power the customer has to bargain with set prices. There are many clients that come to the gym, John has loyal clients that repeatedly come to train with him every day or a few times a week. There will always be people who like to train hard, people who are preparing for a powerlifting competence and they need guidance. However, there are other strength gyms in the area and other online coaching that Gaglione Strength needs to compete with. Although there are other strength gyms in the area, this gym is very unique because of the services offered and the one on one coaching, unlike other gyms where there is no coach at all.

Threat of Substitutions

The Threat of Substitutes refers to the threat of alternatives that may exist. When it comes to the powerlifting industry, this is a medium force. Although there are many other gyms in Long Island and some being close to Gaglione Strength, John is not very concerned or worry about it because he knows his clients and they will stay loyal to his gym, and other people who want to check it out will know what things he offers when you become a member and other gyms do not offer it.

Bargaining Power of Suppliers 

Bargaining Power of Suppliers refers to how easily suppliers can drive up the price of goods your business need. The amount of supplies for Gaglione Strength is very limited. There are squat racks, benches, barbells, dumbbells, deadlift platforms, and other equipment to keep the gym up and running and fully stocked for his clients that come. All of this equipment was purchased from a handful of different companies and strength websites, and these companies provide their equipment to many different gyms; whoever needs them. It is expensive but they know that gym owners will buy from them, and gym owners want what is best for their gyms, so they will spend thousands of dollars to satisfy their clients/customers.

Threat of New Entrants

Threat of New Entrants mean how profitable is the business, if the business is more profitable there will be more competition entering the industry to try and compete. How easy is it for a competitor to enter the business market. If more resources and time are needed to enter the market, the threat of new entrants decreases. For Gaglione Strength, there is a medium force, mainly because there are gyms around Gaglione Strength, but there are not many gyms that are just for powerlifting, as a result they do not provide all the things that this gym has.

Rivalry

Rivalry simply means competition. This means the number of competitors and their equivalent products and services. If there are many businesses that offers the same products and services as your business, the rivalry among existing firms increases. In the case of John, He runs Gaglione Strength where there are other gyms among his gym, but there is no other gym that provides all the services that he does. There isn't a sports massage therapist at all times, there is not a nutritionist at other gyms every day who helps the clients, who are members and usually a client at another gym would have to go somewhere special, and not in the gyms location to get FTS (Fascial Stretch Therapy); at Gaglione Strength, anyone can get FTS whenever they want and need it. 

Competitive Strategy

Focus Differentiation

"According to Porter, there are four competitive strategies: Industry-wide-cost, Industry wide-differentiation, focus-cost and focus differentiation. Our company is based on focus differentiation."

Focus differentiation refers to the strategy that a company seeks in order to be exclusive in its industry by selecting a segment of people with special needs and providing them with best products or services. As a result, various companies try to create a good quality of service based on the demands of the group. Gaglione Strength, relies on focus differentiation because it is not a regular gym, It is a powerlifting gym that is going after a certain segment of people, which means it targets mostly powerlifters and bodybuilders. Gaglione Strength works hard to provide better services offering a  “powerlifting” training program or a “learning more” strengthening seminar across the powerlifting/bodybuilding community.

Gaglione Strengths’ founder tried  to differentiate himself from other gyms by providing different services that others may not have offered. Gaglione Strength has become a successful competitor in the private gym/ powerlifting and strength gym market, and his gym continues to grow every year. Our company addresses the threats of other companies or as mentioned before the five forces first by its location, it is the only powerlifting/strength gym in that area of Long Island and in turn reduces its threat of new entrants. Secondly, the unique and exclusive services provided only by our gym keeps the rivalry of other gyms in that area at a minimum. At the same time because of its location and exclusive services that other competitors do not provide, the threat of other substitutions alike are kept to a minimum.

This also results in decreasing our demand for suppliers due to the fact that we require only certain products, unlike the competitors which require a broad and vast variety of products. Finally, Gaglione Strength’ major advantage over others is the fact that we provide one on one coaching and assistance to our loyal customers enrolled in our training programs, but at the same time we also provide access to all of our equipment in our facility to regular customers.  

Value Chain:

"A Value Chain is a network of value-creating activities. It consists of five primary activities and four support activities"

Inbound logistics: Receiving and storing inputs to the products. In Johns case at Gaglione Strength, he gets all types of equipment (Dumbbells, Barbells, Squat racks, benches for bench pressing, mono lifts and other types of equipment that a gym would have) he orders it from suppliers that sell powerlifting equipment and then when he receives it, it's put into the gym for people to use. Operations are all the activities required to transform inputs into outputs. This means when all of the equipment is put in and set up, it’s kept up with. Meaning if the barbells have worn out knurling (better knurling on a bar helps you grip it better) John will pay for new barbells. Or if the mono lift for squatting needs to be fixed because it’s sticking and you can’t get it to a certain height, it’s fixed by the end of the night. Daily tasks that need to be done to make sure the gym is successful and running smoothly is Gaglione Strengths’ daily operations. 
Outbound logistics does not apply to Gaglione Strength, however if a coach was going to personal train someone and go to their house, they would be providing a service to them and then our gym could be considered having outbound logistics as part of their value chain. Since Gaglione Strength doesn’t do that type of service, this does not apply to them. 

Marketing induces the buyers to purchase the products and with sales, they are able to because it’s at an affordable cost. For Gaglione Strength, John will have promotions every so often around the start of the new school year, or around the holidays where you get a certain discount if you sign up for a membership or if you sign up for a 12 week program. There is also a promotion every year when the summer starts for athletes who come home in the summer for school, there is always a buy 8 weeks get 2 weeks for free. So they can train during the summer. Marketing is done mainly on John’s social media, his Instagram and his business Facebook page. This is because a good amount of his athletes and other powerlifters communicate now on social media so they would be able to see when these special promotions are going on.
Customer service refers to making sure that every client at Gaglione Strength is taken care of and given attention. John does not want any one of his athletes to feel like they aren’t important and that their needs and numbers for training isn’t important. Everyone is given attention and time to either adjust numbers during a training session or asked if they are OK before they start to lift.

Business Process:

Gaglione Strength Business Process

The business process of Gaglione Strength is to generate profits and to make the business valuable and well known. This starts out by people reaching out to John on his website; (GaglioneStrength.com) either by clicking “learn more” under Join the Gym or Distance Coaching. Or simply by emailing him requesting information about his training services. He then receives those leads and answers them back to set up consultations to better get to know the person he is dealing with, so he can assess what their goals are, what their habits are what they are expecting out of working with him. John then meets with the person in person, if they are local to get them started on a membership or he speaks longer on the phone to sell them a membership. Whether they are local or distant, they are sent a Pike 13 request to make their first payment and set up their account. Once the account is set up, their membership has started and they can get to work.

Competitive Advantage

John at Gaglione Strength is working right now to improve training with his clients and trying to find exactly how they move a weight, the speed they move it and how much strength they have while moving it. Whether it be if they are just starting out under the bar, he will be able to tell from the equipment hooked up on the barbell how fast they were able to move it and then he can add weight onto the barbell from there and continue assessing the speed and strength. What all of that means is measuring the velocity of their squats and bench pressing. All of these findings can be done using an Open Barbell 3.0. This gives John a competitive advantage among other powerlifting coaches and other gyms around his area. Mainly because hardly anyone uses velocity based training right now and being able to measure an athlete’s speed strength and actually being able to tell if their sets of 8 or sets of 3 are moving slowing is terrific. He can adjust the numbers that he is using for that person’s one rep max by decreasing or increasing it if the reps are moving at a fast speed. By understanding the corresponding velocity, the proper load on a barbell can be provided. This way if someone is having an off day, they don’t need to go by there one rep max. The way John follows up with his leads/potential clients gives him a competitive advantage as well. Usually with an online coach it is very typical for the customer and the coach to email each other back and forth and never really speak on the phone. With John and his way of speaking to potential clients he will immediately follow up with the lead when he sees it in his email, and he will email the lead for their phone number so he and them can speak on the phone and he can hear their goals and see if they are really serious about achieving them. He doesn't want to waste his time or waste their time so hearing their voice and not just emailing back and forth gives that person confidence and makes them feel important. Feeling important makes the person want to work with that kind of coach more.