Planet Fitness made quite a name by being the cheapest, easy-going, and most gym center by location in the USA. Planet Center is another name for comfort for any beginner-level fitness enthusiasts. The revenue is increasing yearly with a friendly environment, skilled workforce, and robust business model. But, with time, it faces new challenges, which we get to know in this Planet Fitness SWOT analysis. Let’s dive in!
Planet Fitness: Company Overview
| Company | Planet Fitness |
| Industry | Fitness |
| Founded | 1992 |
| Founder | Michael Grondahl, Marc Grondahl |
| CEO | Chris Rondeau |
| Headquarter | Hampton, New Hampshire, U.S. |
| No. of Employees | 1,616+ |
| Annual Revenue | $0.58 billion (FY 2021) |
| Website | planetfitness.com |
Two guys named Marc Grondahl and Michael Grondahl founded Planet Fitness only with one gym. In the beginning, they even struggled to get any members at all. But their goal made it possible for the company this far: catering to people who want to get fit but struggling with the first step.
From 1 gym center to now, it caters to millions of people with more than two thousand locations in five countries with only a $10 membership fee. With only 1,616 employees, most of the management is handled. And the rest is run by the franchisees.
With half a billion in revenue, it is one of the largest fitness centers by number to date.
Product & Services of Planet Fitness
Gym / Fitness Center
Planet Fitness Competitors
ClassPass | Rite Aid | LA Fitness | Gold’s Gym | Snap Fitness
Did You Know?
Planet Fitness reached its customers primarily via a reality show named “The Biggest Loser,” an NBC reality show. And it worked as a perfect marketing channel to get exposed to their potential customer base.
Strengths – Planet Fitness SWOT Analysis
Skilled & Motivated Employees: Planet Fitness knows how to care for its employees. As a result, it pays off in the long term as the employees are very motivated and skilled. The benefits include paid sick leave, flexible working hours, better pay, etc. Employee benefits are standard in the industry.
Economic Fee Rate: Most gym membership charges are very high and cost a lot. It’s one of the factors behind not giving up on getting into the gym. In this case, Planet Fitness offers two types of membership, and one starts as low as $10, which is cheap. Anyone who is just beginning can start with the basic package.
Perfect TG Selection: One of the primary reasons they kept their fee low is because they want to capture the beginner market. To elaborate, people who are starting and getting fit wish to begin without hesitation or a barrier, and Planet Fitness is the perfect place there. This target market is the ideal opportunity to grab with their outstanding fees and other benefits.
Robust Business Model: One of the core reasons behind the company’s success is its diversified business model. Not just because it has an excellent reputation and brand portfolio but also the Planet Fitness has more revenue sources other than its core gym services. Besides, their franchisee business model made it possible for them to become the market leader in this industry.
High Profit: As the gym is a service-based business, there are not many expenses other than rent, employee remuneration, and additional fixed costs. As their target markets are beginners and the market is huge, the more member, the more profits. And their revenue is increasing yearly, and in 2022, it was 58.43%.
Weaknesses – Planet Fitness SWOT Analysis
Inefficient Financial Planning: Even with booming finances and increased revenue, they need more effective and efficient financial planning. If we look at the profit margin, it didn’t increase that much compared to the total revenue percentage. Not having the proper planning in this section will cost them in the long run.
Low Inventory / Equipment: When we discussed the target market, we saw that most customers are beginners. As they are the primary target, they don’t need heavy equipment. That’s why heavy lifters or bodybuilders don’t sign up here. As a result, the lack of every type of equipment immediately cuts off the potential consumer base.
Decreasing Market Share: After covid, people started going to the gym, and the industry is growing. Unfortunately, despite the revenue increase for Planet Fitness, the market capitalization decreased by 6.52% in 2022. Comparatively, the competitors’ market share is increasing, while it’s the opposite for Planet Fitness.
Not Enough Expert Trainers: Most beginners require guidance in their first phase of training or going to the gym. And expert trainers are there to help them with that. But, lack of enough expert trainers has always been a complaint from the members. As a result, many beginners quit exercising within the first month of beginning because of a lack of guidance and trainers.
Opportunities – Planet Fitness SWOT Analysis
Expand Target Market: It’s more difficult to capture new customers than retain one. As most customers are beginners, Planet Fitness has the opportunity to expand the target market to the intermediate and pro level. Usually, these members stay loyal to the gym that can provide everything for them.
More Equipment: To expand the target market, they need more types of equipment to attract new customers. Not enough equipment is available for every kind of customer, so they should get more. That way, the number of gym members and the loyal base will increase.
Overall Presence: Although the name has the “Planet” word, the company doesn’t have a widespread global presence. It has 2,039 locations in 50 states in the USA and is entirely focused on serving the local market. But, it has the opportunity to expand beyond to other continents.
Online Training: After covid, people are more habituated toward online learning. And many people prefer their daily in their home but with a trainer guiding them. Planet Fitness has the opportunity to introduce its online segment with skilled trainers.
Government Policy: The government is imposing new policies in this industry and regularly monitoring the activities. As a result, unauthorized gym centers that don’t fit the criteria in many locations will go out of business. It is the perfect opportunity for the company to fill those locations.
Threats – Planet Fitness SWOT Analysis
Alternative Ways: As mentioned, people are now more habituated to working out at home since the pandemic. As a result, people have most of the essential equipment they need for daily workouts. As a result, it directly threatened the fitness center business.
High Competition: There are many big players in this industry, such as ANYTIME FITNESS, LA Fitness, ClassPass, etc. These are the direct competitors in the market. Besides these, the apps and other online courses that offer excellent services have become a significant threat to Planet Fitness.
Innovative Equipment: For a few years now, many company’s coming up with innovative home fitness equipment to serve people who prefer working out at home. As a result, with an online course to be their fitness guide and these products, people are more capable of working out at home.
No Global Presence: As a franchise business, there should be a more global presence for Planet Fitness. There are many opportunities in Europe in the fitness sector, not to mention in the other continents. But, having no existence or first-mover advantages in those areas threatens the company’s expansion abroad.
[Bonus Infographic] SWOT Analysis of Planet Fitness
Recommendations for Planet Fitness
Despite all the factors we discussed, Planet Fitness has some gaps starting to fill and capture the potential market. Here are some recommendations to grow the company to its potential.
- Their financial planning is the most important thing they should be working on now. By doing that, they can increase the overall profit margin.
- There should be another segment for intermediate and pro-level fitness enthusiasts. But, they need to start working on expanding the inventory or the equipment. With enough types of equipment in hand, they can attract new customers.
- They should start expanding the business abroad on other continents.
- As the world is moving forward more online-based, Planet Fitness could start one more segment, which is entirely online-based. There should be skilled trainers to guide them in the journey.
- They should focus on hiring more expert trainers.
Frequently Asked Questions (FAQs)
Does Planet Fitness Let You Go Twice a Day?
Yes, Planet Fitness lets you go more than twice a day. Members have 24/7 access to the gym.
Can You Bring a Guest to Planet Fitness With a Black Card?
Yes, you can bring a guest to planet fitness with a black card.
Final Words on Planet Fitness SWOT Analysis
That was everything on Planet Fitness SWOT analysis. As the market leader, the company has many perks, and the overall revenue stream is excellent. But there are enough opportunities, and they can grow the business beyond that. As they are starting to face the modern problem, they need to bring more attractive packages and tackle those situations strategically.
References
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- Planet Fitness (PLNT) – Revenue. (n.d.). CompaniesMarketCap.
- FRANCHISING. (n.d.). Planet Fitness.
- Planet Fitness Revenue 2014-2022 | PLNT. (n.d.). MacroTrends.
- Planet Fitness Profit Margin 2014-2022 | PLNT. (n.d.). MacroTrends.
- Inside Planet Fitness: Virtual Tour. (n.d.). Planet Fitness.
- Planet Fitness (PLNT) – Market capitalization. (n.d.). CompaniesMarketCap.
- Q1’20 10-Q – Planet Fitness Inc. (n.d.). BamSEC.
- Herbert, D. L. (2019, October 7). How Liability and Regulation Pose Threats to Unprepared Fitness Professionals. Club Industry.
- Shaban, H. (2021, January 7). The pandemic’s home-workout revolution may be here to stay. Washington Post.
- JOSKIN, P. (2022, April 6). 2022 European Health & Fitness Market Report: Memberships and number of clubs grew in 2021. Europe Active.
