• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Bally Total fitness case report.

Extracts from this document...

Introduction

BUSINESS MANAGEMENT 9200 Professor Mehmet Genc BALLY TOTAL FITNESS CASE REPORT Team Members: Ilka Nevarez Matthew Preusser Robert Schultz Diana Villacis-Velez February 17, 2009 TABLE OF CONTENTS 1. INTRODUCTION..........................................................................................1 2. CENTRAL ISSUE...........................................................................................1 3. ALTERNATIVES...........................................................................................3 3.1 Alternative I - Franchising.......................................................................3 3.2 Alternative II- Replace CEO.....................................................................4 3.3 Alternative III-Implementation of Corporate Governance.................................5 4. RECOMMENDATION..................................................................................5 5. IMPLEMENTATION PLAN.............................................................................7 6. CONCLUSION.............................................................................................8 7. APPENDICES...............................................................................................9 1. INTRODUCTION(Diana) Bally Total Fitness, an owner-operated health club chain with 360 outlets in the United States and more than 50 internationally was experiencing a difficult time in 2004. Even with revenues of $954 million reported in 2003 and with 3.6 million members worldwide their stock price had fallen from an average of $25 dollars in 1999 to $5 in 2004. Bally Total Fitness was dealing with the pressures of the Health Club Industry competition, was being investigated by the Securities and Exchange committee and major shareholders were urging CEO, Paul Toback, to sell the company. In this report, our team, Solutions Services Inc, the ("Team we") will provide our understanding of the issues faced by Bally's, identify what we believe to be the critical issues, and look to provide strategic recommendations to Bally's Management team ("Management") ...read more.

Middle

Not only was there inconsistency between the prices any 2 members paid, but new members were often times required to purchase 36 month contracts up front or finance their membership by obtaining a loan from Bally's directly. Many members, however, were unhappy with a 36 month commitment and often times made requests to have these memberships cancelled. Bally's had been accused of not honoring requests and using deceptive means to collect member fees. The FTC required Bally's to pay $120,000 in penalties and refund membership fees to many of its customers. An alarming decision came in December, 2002 when former CEO Lee Hillman decided to step down suddenly "to pursue new challenges and interests and to spend more time with his family." Hillman had attempted to improve company performance, he had "sold off outlets and rationalized Bally's brand portfolio." Under Hillman, 19 clubs were divested in an effort to make the gym more profitable. Subsequently, the chain began once again to expand in the number of locations, product offerings and customer reach. Throughout its years, Bally's had diversified many of its product offerings. In addition, Bally's executed an aggressive expansion plan. By 2003, Bally Total Fitness enjoyed 420 [D3]owner operated locations (see exhibit 4), 3.6 million 3600 members and 23,000 employees. ...read more.

Conclusion

This cannot occur until proper corporate governance is in place. - Corporate governance is needed to bring back transparency to the books and records, accountability to management, and to restore confidence in the capital markets, - This is evidenced by the aggressive expansion undertool, which resulted in excessive debt, and the eroding of the companies balance sheet. Actions clearly not in the best interest of shareholders. Excessive debt... poor oversight..... and inadequate risk management systems. The rationale for Corporate Governance is : Adherence to good corporate governance plays a key role in sustaining the overall health of the company, and ensuring it's ability to withstand crises, and manage risks. 5. IMPLEMENTATION PLAN(Diana) > Director Training - Board members to undergo mandatory seminar/training on Corporate Governance to familiarize themselves with their duties and responsibilities and corporate decision makers. > Ongoing Training At firm for all employees- ethics, good decision making, etc... > Shareholders should be given vote to elect board members > Shareholders given vote to replace / remove CEO 6. CONCLUSION 7. APPENDICES [D1]Could we do without this sentence. I am a bit confused by it. [D2]I think you meant to include this. [D3]That's weird for 2003 they quote two different number of gyms (410 in pg 6) ?? ?? ?? ?? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Case Studies and Analysis section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Case Studies and Analysis essays

  1. Microsoft Case Study. Objectives, structure and marketing.

    The different regions of the matrix are Dogs, Cash Cows, Start, Problem Child (Question Mark). It's best to try and keep Cash cows, problem child and stars in equilibrium taking out dogs from the equation. Dogs Products which have low market share and also growth would go under this heading.

  2. Infosys and Corporate Social Responsibility in India

    The foundations functions in partnership with state and central governments and currently serves over 1.3 million students in 7699 schools across India. Its impact is easy to assess from third party recognitions: it was awarded an International Fellowship by the US Congressional Hunger Centre, it received the 2008 CNBC India

  1. How Evans Enterprise party and wedding planners could use IT to help manage their ...

    are required in order for staff to be paid correctly for all work they are doing. If not all procedures are followed, problems occur, such as some staff not getting paid at all for work they completed. 4.1.10 - Lack of Organisation Organisation is important in a business, and Evans enterprises fail to be organised at some points.

  2. Disneyland and M&S. I am going to investigate customer service in two separate ...

    younger children tend to be fussy eaters and having a variety of different foods available to them will be essential. This is also key to any customers who have any special dietary requirements such as a customer with any allergies, a vegan or vegetarian and religions that state specific foods are forbidden etc.

  1. Business plan. The business that I am going to produce is a personalised logo ...

    Supply of Goods and Services Act 1982 It aims to protect consumers against bad workmanship or the poor provision of services. It covers contracts for work and materials, as well as contracts for pure services, and this still applies even in everyday situations such as going to the hairdressers or

  2. LEGO's Management Accounting Decision

    (2) Exploitation of cost reduction opportunities. (3) Matching of accounting emphasis with strategic position. (4) Collection of competitor information. (5) Exploitation of cost reduction opportunities. (6) Matching of accounting emphasis with strategic position. A unifying link between these various views and definitions of SMA (and SCM) is that SMA entails taking a strategic orientation to the generation,

  1. Chick-fil-A corporate strategy

    Once approved, the operator invests $5,000 to sublease the restaurant, which Chick-fil-A has already purchased and built. Chick-fil-A provides the operators with training, technology and anything else they need. Each operator is only allowed to operate one restaurant, working full time in the restaurant they built, supervising a loyal team of employees.

  2. Business Ethics at KFC.

    Another closely linked media report was with regard to reports made by undercover reporters working for PETA. The latter reporters had made video cameras of the way KFC treats its animals. Some of them were quite disturbing as they depict chickens being thrown against walls, being beaten and being slaughtered mercilessly.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work