Are suppliers a source of competitive advantage in gyms?
Author: Chano Jiménez. Author of Vended Malditos Benditos and Atracción Digital, PhD in Economics, Postgraduate Degree in Neuromarketing, MA in Sports Management, MBA, lecturer and international marketing and sales consultant for sports centres.
We define competitive advantage as having some kind of asset that the competition does not have or uses to a lesser extent, which is capable of generating higher profit in a sustained manner over time. In fact, a competitive advantage should be the basis of a business strategy, as it provides aspects to be different from the competition.
Based on this definition, a priori suppliers of assets, like equipment, flooring, software, etc., could not be a source of competitive advantage for gyms, as access to them is only determined by the capacity and willingness of the operators to purchase.
Nonetheless, apriorism has an important loophole, as any asset that can have corporate personalisation, is closely linked to the company’s unique processes or co-developed expressly for a customer can bring coherence and differentiation to the business strategy and, therefore, contribute to the competitive advantage.
In essence, simply accessing a valuable supplier is probably not enough as a sustainable competitive advantage, but it can be enormously valuable to develop and apply other sources of sustainable competitive advantage.
Let’s see some examples:
- Creating products unique on the market (an authentic source of competitive advantage), such as specific training systems (see example), can need and can be highly favoured by accessing suppliers offering equipment to measure body compositions, like https://www.composicion-corporal-inbody.com/.
- The undifferentiated offer of online fitness classes that many operators provide is not a source of competitive advantage. However, if the offer is presented from a comprehensive platform on the company’s website and, therefore, is perceived as a corporative service (for example, ON air by https://www.fitcloud.es/) with the possibility of providing a wide range of personalised online services with restricted access, then we can say this is an excellent source of competitive advantage.
- Offering circuit training with equipment has no advantages, as it is quite common in many fitness clubs. Nonetheless, if this equipment has software to program the methodologies like HIIT or HIST, with the possibility of applying adaptive resistance training throughout the exercises, alongside monitoring and direct feedback on the users’ performance (see Nexa circuit), then we have an asset that allows to develop and apply your own training know-how in a very differentiated way.
Finally, I would like to refer to the bases of competitive strategy, as Porter (1994) or Grant (1995) would do, and outline that accessing certain suppliers can be a source of competitive advantage only if we are able to incorporate their resources into our product design, in an attractive way for our target clients while generating a unique and valuable proposal.