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Assess the likely importance of these factors to Pure Gym’s expansion into emerging markets, such as those in Asia, South America or Africa. - Edexcel - A-Level Business - Question 2 - 2017 - Paper 3
Question 2
Assess the likely importance of these factors to Pure Gym’s expansion into emerging markets, such as those in Asia, South America or Africa.
Worked Solution & Example Answer:Assess the likely importance of these factors to Pure Gym’s expansion into emerging markets, such as those in Asia, South America or Africa. - Edexcel - A-Level Business - Question 2 - 2017 - Paper 3
Step 1
Limitations to Expansion
Answer
Pure Gym's expansion into emerging markets can face several limitations. These may include factors like the appropriate market characteristics of a country, such as levels of disposable income, the ease of doing business, and essential infrastructure. For example, in many developing countries, the availability of fitness facilities may not match what is offered in the UK.
The target market preferences might also pose a challenge. Pure Gym needs to consider cultural attitudes towards fitness, the types of available sports, and preferences in exercise. If the local population prioritizes different forms of fitness or leisure activities, this could limit the success of Pure Gym's model, which relies on low-cost membership and standard gym offerings.
Step 2
Cultural Barriers
Answer
Cultural barriers can further complicate operations. If Pure Gym were to enter a market with a different primary language or cultural practices regarding fitness, there could be significant hurdles in marketing and customer engagement. For instance, if the local market has a preference for personalized training rather than a no-frills gym experience, Pure Gym's low-cost model could misalign with customer expectations.
Step 3
Human Resource Challenges
Answer
Staffing is another concern for Pure Gym. If the business model relies heavily on trained staff, but the local population does not have adequate training in fitness or hospitality, recruitment might become difficult. Moreover, cultural differences might affect staff performance expectations and interactions with customers.
Step 4
Economic Factors
Answer
Economic stability and employment rates vary significantly across emerging markets. High levels of poverty in certain regions can lead to lower disposable income, which might not support a low-cost gym membership model. Pure Gym should consider the economic climate and membership affordability for potential new markets.
Step 5
Potential Solutions
Answer
To counter these challenges, Pure Gym could explore joint ventures with local fitness companies that understand the nuances of the market. This would help in easing the transition and establishing operations with already existing customer trust. Additionally, a tailored marketing strategy that introduces their brand while being sensitive to local cultural norms would be pivotal.
Step 6
Conclusion and Overall Assessment
Answer
In conclusion, the likelihood of Pure Gym's successful expansion into emerging markets relies heavily on understanding and effectively managing these limitations. By considering cultural, economic, and operational factors, and adapting their approach accordingly, Pure Gym may minimize potential issues and establish a successful presence in new regions.