Fitness Industr

y

Finland Mariia Kreposna

Winter 2014

19%

16%

15%15%

7%

28%

% share by value, 2013

United Kingdom, 6.3Spain, 5.3Italy, 5.0Germany, 4.9France, 2.4Rest of Europe, 9.5

1. Fitness market in Europe

2013 market:

$34 million

2017: increase of 27% since 2013

$42 million

SOURCE: MARKETLINE

Industry background Industry analysis Conclusions

2009 20130

50,000

100,000

150,000

200,000

250,000

94,727

195,189

Operating revenue (turnover), th USD

Year

Turn

over

1. Fitness market in Finland

Industry background Industry analysis Conclusions

The fitness industry is one of the fastest growing industries in recent years in Finland. However, it is still in its infancy.

In 5 years the industry grew up almost by

100%

2009 2013-2000

0

2000

4000

6000

8000

10000

12000

14000

16000

531

14031

-236

7,607

P/L before tax & net income

P/L before taxth USD

P/L after tax [Net income]th USD

1. Fitness market in Finland

Industry background Industry analysis Conclusions

It’s hard to imagine Finland without sports and exercise – keeping fit and active is second nature to the Finns.

According to a survey by the European Commission (2010), Finland tops the podium in physical activity in Europe, and it also places among the most active countries in the world.

2009 20130

20000

40000

60000

80000

100000

120000

80411

104337

Total assets

Total assetsth USD

1. Fitness market in Finland

Industry background Industry analysis Conclusions

Observers of the Finnish success story are now working on how they can bring such drastic improvements to their own countries.

1. Fitness market in Finland

Industry background Industry analysis Conclusions

2009

2013

-100 -50 0 50 100 150

-69.99

124.1

Profit margin

Profit margin%

From the start, the Finnish plans benefited by shifting money away from Helsinki to local authorities and making them responsible for exercise promotion. 

2009 20130

200

400

600

800

1000

1200

1400

1600

1800

2000

969

1866

Number of employees

Number of employees

Meanwhile, in the Finnish town of Jyväskylä, local authorities were concerned that the elderly were staying in, especially during winter, because it was dark and the pavements were slippery. To make it easier for them to exercise, they persuaded the bus companies to stop by day centers and old peoples' homes and then at the local swimming pool. 

1. Fitness market in Finland

Industry background Industry analysis Conclusions

1. Fitness market in Finland

Industry background Industry analysis Conclusions

90%• football (soccer)

• ice hockey• floorball • various forms of

gymnastics

under 18 are physically active. Favorites include:

adult population exercise at least twice a week

90% 50%

exercise at least four times a week.

• running • gym • exercise classes

oliticalP• Promotion of health by

government • Funding from

government • Responsible policy

conomical

• GDP 2015 1.4% growth• Investment grow in 2014• 2014: rise in consumer

prices 1.9%• 2015, inflation slow to

1.7%.

E ocialS• Life is movement • Activity prevents

diseases• Self-responsibility• Sports is second nature

to the Finns

echnological T• Training aids• Personalized web-based

workout monitoring• safe workout

environment

cologicalE• Clean natural

environment • People encouraged to

walk rather than drive

egalL• Sport is a cultural basic

right/Finnish Constitution

• Local governments are responsible for sport needs

2. Industry analysis

Industry background Industry analysis Conclusions

Information systems

Social media

Loyalty program

Trends…..HIIT 

Zumba

CrossFit

Personal training

Rivalry high:- Intense and active competition- High exit barriers- High fixed costs+ High switching costs+ High market growth+ Possibility ot differentiate offer+ Power of brand identity

Threat of new entrants:- Government subvention- Market growing+ Major entry barrier: Capital requirement+ Specific qualification+ Construction of brand identity

Customers:- Concentrated geographically- High Price/Quality sensitivity-/+ Word-of-mouth communication/reputation + High switching costsThreat of substitutes:

- Immediate availability- Attractive Price-Performance ratio

Suppliers negotiation power:- Essential equipment- High switching costs- No substitutes+ Fitness centre are the major customer+ Low differenciation of offer

2. Analysis of 5 forces

Industry background Industry analysis Conclusions

Industry

Rivalry

Potential New

Entrants

Customers

Substitutes

Suppliers

2. Figures

Industry background Industry analysis Conclusions

  Company nameProfit margin

%1 FOREVER HELSINKI OY 29.55

2 FOREVER VARISTO OY 20.20

3 FOREVER HAMEENLINNA OY

19.65

4 OY ELIXIA FINLAND AB 19.01

5 FOREVER MATINKYLA OY 18.12

6 STUDIO LADYLIKE OY 17.25

7 SUOMEN KASINOLLA OY 16.86

8 KLAARI OY 14.80

9 ACTILIFE OY 14.31

10 FD GROUP OY 13.82

Top 10 – Highest profit margin

  Company nameOperating revenue th

USDProfit margin

%1. OY ELIXIA FINLAND AB 39,430 19.01

2. FYSIOLINE FRESSI OY 16,998 6.74

3. VUORISTO-YHTIOT OY 16,077 -0.90

4. FD GROUP OY 15,488 13.82

5. KYYHKYLA OY 14,770 0.05

Top 5 - Highest Operating revenue

Top 5 – Lowest Operating revenue

  Company nameOperating revenue th

USD Profit

margin %1. ACTILIFE OY 738 14.31

2. FB HYVA KUNTO OY 678 2.33

3. LADY PALATSI OY 653 -13.42

4. KUNTOKOTKA OY 512 0.25

5. MESALUS OY 24 n.s.

2. Business Model Canvas

Industry background Industry analysis Conclusions

KEY PARTNERS

Partnerships: universities, sport club Suppliers: material and equipment providersKey activities of suppliers: selling material and equipment, providing advice for arrangement

KEY ACTIVITIESGetting new customersRetaining existing customersProviding services expectedMaintaining communication and promotionManaging the update informationManaging customer registration

KEY RESOURCES

HR: Trainers, Managers, Nutritionist, subcontractor, Capital: building, equipment

CUSTOMER RELATIONSHIPS

Regular communicationPersonal service

CUSTOMER SEGMENTS

18-35 years oldMen and women (40%/60%)Active middle class and studentsWilling to stay fit, lose weight and/or relax

VALUE PROPOSITIONSports facilitiesConvenient accessDiversified offer Practical advice on using sport equipmentPersonalized programAdvice on nutrition

CHANNELS

Direct salesWord of mouth communication

COST STRUCTURE

FacilityEquipmentHR: Reimbursement

REVENUE STREAMS

MembershipAdditional services and products (protein bars, personalized advice)

3. Conclusions

Industry background Industry analysis Conclusions

Challenges… Maintaining customers

Customer information history

Competition

Small market

3. Conclusions

Industry background Industry analysis Conclusions

Increasing competition

Customer retention

Profitability on long term

High growth  

Attractive Market

Free segments