2.7 Exercises

Peak Fitness is a fictional, well-established gym founded in 2010, located in the suburban area of a city in the New England region of the USA. It has earned a reputation for its focus on wellness and its community-oriented approach to fitness. Over the years, Peak Fitness has attracted a dedicated following of fitness enthusiasts, leading to a consistent rise in membership. The increase has been particularly noticeable over the past two years, primarily due to societal norms shifting towards a greater focus on health and wellness.

However, with the influx of new members, the 5,000-square-foot gym facility has become congested, particularly during peak workout hours. Given the current space restrictions, they cannot accommodate the growing number of members. The management team has noticed that this overcrowding has led to some members’ dissatisfaction. This is concerning as Peak Fitness prides itself on providing its members with a comfortable and positive workout environment.

Peak Fitness has decided to expand its facilities in response to this issue. After careful analysis, the management team has identified an adjacent space that is currently vacant and available for lease. This space would increase the gym’s floor area by 50%, providing more room for existing and new members.

In addition to this, the team also wants to capitalize on the latest fitness trends and diversify the workout options available. They have introduced five new fitness classes, including high-intensity interval training, yoga, and functional fitness. The gym has a team of highly qualified fitness instructors but would need to hire more to cater to these new classes.

With these changes, the management expects a significant increase in membership sales. They have set a target of a 30% rise within 18 months after the expansion is complete. They also aim to ensure a high member satisfaction rate. To monitor this, they plan to conduct satisfaction surveys six months after the expansion and introduction of new classes. The goal is to achieve a 90% satisfaction rate.

To make this happen, the management team has earmarked some of the company’s profits for the gym expansion. They have also started discussing potential loans with their bank for additional funding. The entire project is being spearheaded by the gym’s General Manager, who has considerable experience managing similar projects.

SMART objectives mentioned above are listed below:

1. Increase gym floor space by 50% within 12 months to cater to the growing membership.
2. Introduce five new fitness classes within six months to diversify the workout options available for members.
3. Increase membership sales by 30% within 18 months after the expansion is complete.
4. Ensure a 90% member satisfaction rate through surveys conducted six months after the expansion and introduction of new classes.

Questions:

1. Evaluate the specificity of the objectives set by Peak Fitness management. Do they clearly define what the management intends to achieve?
2. Analyze the measures used in the SMART objectives. How will these help the management track progress toward achieving the objectives?
3. Assess the achievability of these objectives considering the given timeframe and the available resources. Do you see any potential challenges?
4. How do these objectives align with the overall mission of Peak Fitness? Discuss their relevance in the context of the gym’s expansion strategy.
5. Given the timeline specified in the objectives, evaluate the reasonableness and feasibility. Are the deadlines set by the management realistic?

XYZ Tech, a fictional company, is a rapidly growing technology company with a diverse product portfolio. The company has consistently outperformed its competitors through innovation and customer satisfaction. However, it also faces a significant challenge in determining which projects to pursue in the future.

Currently, XYZ Tech has four potential projects, each with distinct characteristics:

1. Project Alpha: A next-generation AI solution for healthcare. This project could potentially revolutionize the medical industry but requires significant R&D investment and has a high-risk profile.
2. Project Beta: An incremental improvement to an existing software product. This project has a low-risk profile and a reliable revenue stream but offers less potential for exponential growth.
3. Project Gamma: A cutting-edge blockchain technology for supply chain management. This project is positioned in a high-growth market but is subject to regulatory uncertainties.
4. Project Delta: A digital transformation service for small and medium enterprises. This project promises a steady income stream but faces stiff market competition.

XYZ Tech uses a weighted scoring model for project selection. The selection criteria and their weights are:

1. Market Potential: 30%
2. Strategic Fit: 25%
3. Financial Return: 30%
4. Risk Level: 15%

Below are the scores given by the project evaluation team (on a scale of 1-10, with 10 being the best) for each project based on these criteria:

Questions:

1. Calculate the weighted scores for each project and interpret the results. Which project should XYZ Tech choose based on the calculated scores? Are there any caveats or limitations in using these scores for the final decision? How could these limitations be mitigated?
2. Discuss the advantages and disadvantages of using a weighted scoring model for project selection. How might this model be beneficial or detrimental for XYZ Tech?
3. Explain how the assigned weights for each criterion reflect XYZ Tech’s strategy and priorities. Would you suggest any changes to the weights assigned? If so, why?
4. Assess the potential impact of each project on XYZ Tech’s business. Consider factors beyond the given selection criteria, such as potential benefits, risks, and long-term strategic implications.