Page 11 - CIMA MCS Workbook August 2018 - Day 1 Tasks

Chapter 3

GYMFIT – SUMMARY AND KEY

TOPICS

1 INTRODUCTION

It is absolutely crucial that you completely familiarise yourself with the pre-seen information prior
to attempting the Case Study exam. Merely reading through the materials is unlikely to be
sufficient and it is also important that you consider which aspects of the three technical subjects
may be useful and relevant for the Case Study.
The exercises in the following three chapters will help you to gain a thorough understanding of
the Case Study scenario and ensure you are fully prepared to attempt the Practice Tasks later in
this Workbook.
Solutions to these exercises are provided but are not exhaustive. It is important that you attempt
the exercises yourself and makes notes of your answers before reviewing the solutions.

2 OVERVIEW OF PRE-SEEN

The pre-seen information concerns a company called GymFiT that offers low-cost gym
membership in the country of Celtland.

Business model
GymFiT offers low-cost, no-frills gym membership with no contracts. Despite having low fees, the
company provides high quality gym equipment. The ‘no-frills’ aspect is that they do not provide
swimming pools, saunas, restaurants or bars.
Key to low fees is keeping costs low (e.g. through competitive tendering when fitting out new
gyms), outsourcing non-core aspects such as security and the use of technology to reduce staffing
needs. Each gym typically has two employees – a manager and an assistant manager. A key aspect
of staffing is the use of freelance fitness instructors on zero-hour contracts
Growth has involved a mixture of organic growth and acquisition.

This strategy has been successful to date and the company is now the second largest low-cost
gym in Celtland with 102 gyms and turnover in excess of C£73 million.
Competition

There are four major players in the low-cost sector in Celtland. The largest, Gym4All has grown
primarily by acquisitions but the main threat comes from Fit4Life, who offers lifelong membership
and has developed specialist fitness apps to enhance the customer experience.
Given the above, customer retention is now seen as a critical success factor in the industry.

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