OVERVIEW
Obesity is a serious problem in America where, as of 2004, two out of every three adults were classified as obese (Wells, 2006). In response to this alarming fact, the US Surgeon General’s office has voiced its concern about the effects of obesity. With such a highly publicized campaign against obesity, Americans have become increasingly-health conscious, driving growth in a variety of industries including the health club industry. During the ten year period from 1995 and including 2004, the health club industry saw an increase of 113% in the number of clubs, and in 2004 alone, industry-wide revenues totaled $ 14.1 billion (Wells 2006). Another key factor that has led to this growth in this industry is the increase in members under the age of 18, which doubled between 1993 and 2003, and the increase in members over the age of 55, which increased 273% over the same period (Wells, 2006).
BASIC ECONOMICS
From industry data (Wells, 2006), it can be deduced that since 2000, the demand for health clubs is increasing on average at 6.3% and the supply of health clubs is increasing on average at 11.8%. This sizable increase in the number of health clubs is due to the fact that new competitors can easily enter the market. The threat of new entrants is high because although supply side economies of scale do exist, there are mechanisms in place that provide a new entrant means to overcome the advantage. One example is that larger firms would require more equipment to fill their larger facilities, thereby incurring a greater cost, but be able to spread that cost over a greater number of patrons. However, smaller firms can overcome the issue by leasing smaller spaces with few amenities and, instead of making large capital ex...
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...l trainers. All of these have contributed to the growing number of customer memberships, 138% between 1987 and 2004 (Wells, 2006).
To provide this value, health clubs need to have the right location, have the right equipment, advertise toward their specific market, and hire the right personnel. This results in expenses for rent, equipment purchase, depreciation and maintenance costs, advertising, and salaries and wages. Most of these costs are fixed. The discrepancy between high fixed costs and low marginal costs is another contributing factor to the competitiveness in the business. Until the club reaches full capacity, the fixed costs of the club remain unaltered regardless of the change in the number of customers. Once it reaches the maximum capacity, another club will have to be created to accommodate the increase in operation, in cases where this is possible.
...t them attain the services easily and at lower costs. In addition, these hospitals have the potential of managing effectively their cash flow. A fixed and proper payment system to the workers of the small health centers can m motivates them to avail quality services to the medical beneficiaries. Small hospitals can be able to have bonus payment in case they provide care in areas short of professional health. Hence, small hospital can implicate appropriately their method of payment. Conversely, there might be a risk possibility when it comes to accessing low amount due to the nature of the illness of the patients, the involvement of high cost of treatment amongst many other factors. In the vent that the overall health care costs are more than earlier anticipated, the hospital and the doctor shall receive less profits. This can have a negative impact on the hospital.
First, let us analyze General Practice Affiliates’ current financial position. The income and expenses report shows a net revenue of $230,250. The net revenue is obtained after expenses, including taxes, of the company have been subtracted from revenue (Paterson, 2014, p. 124). The balance sheet shows a $306,180 in retained earnings. Retained earnings represent stakeholders’ equity (Paterson, 2014, p. 128). Retained earnings are usually invested back in the form of inventory or debt payments (Albrecht, Stice, Stice , & Swain, 2008). General Practice Affiliates’ cash flow analysis shows that the practice invests in new equipment. However, General Practice Affiliates mainly used cash during 2012. The main source of cash from operations came from depreciation expense, which is not a reliable source of funding (Paterson, 2014, p. 130). Accounts receivable increased by $50,000, while accounts payable only increased by $10,000. In addition, cash flow analysis shows a balance sheet data that is affected by future transactions (Paterson, 2014, p. 128). General Practice Affiliates choose to stretch the time to pay suppliers instead of paying its bills. ...
Obesity is a rising problem in the United States. With obesity rates on the rise something must be done to prevent this massive issue. There are ways to help including educating at young ages, improving nutrition facts at restaurants, and providing more space for citizens to get physically active.
Competitive advantage matters greatly to those responsible for the management of healthcare institutions. Together with rapidly escalating healthcare costs, increasingly complex medical technologies, and growing regulatory and legal pressures, healthcare organizations face a critical need to improve the quality of care at reduced costs (Cu...
As previously stated, these consumers are involved in some sort of physical activity, and this is a trend that has grown in the past few decades. The trend of participating in physical activities will continue to see growth due to lifestyle changes of the consumers. Since, people are noticing a change in the human life capacity,
On a positive note however, according to the Journal of the American Medical Association using NHANES, “In 2011-2012, the prevalence of obesity in the United States was 16.9% in youth and 34.9% in adults. The overall prevalence of obesity among youth remained unchanged compared with that in 2009-2010 (16.9%),9 and there was no significant change since 2003-2004.” (JAMA). In as early as 2004 programs started to appear around the country that had begun to reach and educate and promote better healthy lifestyles for both adults and children. These programs have sprouted across the nation but as you can see it has only plateaued, and has yet to start to decline. Children still remain at an alarming high obesity rate that can furth...
In 1990, obese adults made up less than 15 percent of the population in most U.S. states. By 2010, 36 states had obesity rates of 25 percent or higher, and 12 of those had obesity rates of 30 percent or higher. (CDC) Today, nationwide, roughly two out of three U.S. ...
Obesity is becoming a national epidemic in America. It often starts in childhood and follows a child into adulthood. There are several different ways that parents can help promote a healthy lifestyle for their children, from healthy diets to daily exercise, but many times having a healthy family is not enough. It will take America moving towards healthier life choices and away from the fast foods and sodas. America as a nation needs to promote exercise and eating healthy, making it the “cool” and trendy thing to do.
"LA Fitness grew out of three clubs, each owned by one of the founders. In 1990 Fred Turock, Jeremy Taylor and David Turner decided to get together to jointly manage these clubs, with the aim of building up a network of gyms with first class facilities. In 1996 they created the LA Fitness brand and the following year they joined the top ten health and fitness club operators, catering to a wide variety of people of all shapes and sizes and with a huge range of goals. In 1999 the growth and success of the LA Fitness group led to a listing on the London Stock Exchange. In 2005 the team decided they needed more control - they wanted to make sure LA Fitness could continue to provide affordable membership and a fun environment for its growing band of members. LA Fitness now has more than 88 clubs and over a quarter of a million members all over the United Kingdom" (LA Fitness, 2007).
This public health issue does not only effect individuals but the national as a whole in regards to the health care system costs. Obesity in children "costs the health care system $14 billion per year, much which comes from public funds" (Glanz, 2008). Also, obesity is expected to cause 112,000 deaths per year in the United States(Gollust, 2014). In addition, many changes seen in the health care sy...
2. Obesity dramatically increased in the 70’s due to a number of factors. After World War 2, lawmakers, big business and labor leaders, along with many ordinary Americans put mass consumption at the center of their plans for a successful post-war nation. The availability of frozen dinners and a variety and surplus of different foods skyrocketed. In 1977, the US dietary guidelines changed drastically, promoting our diets as mainly carbohydrate based. Over the years, the sizes of certain foods and our portions have blown up. Twenty years ago, an average bagel was 3 inches in diameter and only 140 calories. Today, the size of the average bagel has doubled, now 6 inches in diameter and over 350 calories. The health problems that stem from being overweight go way beyond the ones we usually hear about, like diabetes and heart disease. Being overweight can also affect a person's joints, breathing, sleep, mood, and energy levels. In the U.S. 68.5% of adults are overweight or obese, 34.9% falling under the obese category and 31.8% of children and adolescents are overweight or obese with 16.9% being obese (Overweight and Obesity in the U.S.). Figuratively and literarily, the obesity rate is a growing problem. The total economic cost of overweight and obese persons in the United States and Canada caused by medical costs, excess mortality and disability is approximately $300 billion per year. $80 billion of this portion is due to overweight, and approximately $220 billion is due to obesity. Approximately 90 percent of the total $300 billon comes from the United States. The Trust for America's Healt...
price, quality, convenience, and superior products or services); however, competition can also be based on new technology and innovation. A key role of competition in health care is the potential to provide a mechanism for reducing health care costs. Competition generally eliminates inefficiencies that would otherwise yield high production costs, which are ultimately transferred to patients via high health service and delivery costs” (http://www.ncbi.nlm.nih.gov). “Competition in health care markets benefits consumers because it helps contain costs, improve quality, and encourage innovation” (https://www.ftc.gov). Competition compels companies to deliver increasing value to customers. The fundamental driver of this continuous quality improvement and cost reduction is innovation. Without incentives to sustain innovation in health care, short-term cost savings will soon be overwhelmed by the desire to widen access, the growing health needs of an aging population, and the unwillingness of Americans to settle for anything less than the best treatments available. The United States can achieve universal access and lower costs without sacrificing quality, but only by allowing competition to work at all levels of the health care system. Prices remain high even when there is excess capacity. Technologies remain expensive even when they are widely used. Hospitals and physicians remain in business even when they charge
...system approximately $44 billion dollars annually (CDC). Obesity is defined as having a BMI of 29.5 or higher and is associated with inducing secondary diseases and illnesses that are not always irreversible. The impacts of the disease (or diseases) can afflict suffers with mental illnesses (anxiety, low confidence, depression,) or poorer IQ as children. Combining these together can produce a lower socio-economic status and inspire other problems related to that. Such as housing, careers, quality of life, financial troubles, that is hard to bring oneself out of alone. By offering support or putting together organizations coupled with self-determination we can assist those with obesity. Combined with employer incentives, mediation, and increased physical activity along with reduction in high caloric foods the rates of obesity and obesity related illnesses could drop.
The system adopted by 7-eleven maximizes the threat for new entrants. That’s means that threat of new entrants of 7-Eleven is low. It is because 7-Eleven has already reached economies of scale through maintaining a strong customer base and brand loyalty. Over the years, 7-Eleven has increases their customer and brand loyalty. The access to latest technology and capital investments in the same ensures that the barrier for entries for new entr...
Over the course of the last few decades, the U.S. has seen a drastic rise in the spread of obesity. Through the rise of large-scale fast food corporations, the blame has shifted toward the mass consumerism of these global industries. It is, however, due to poor lifestyle choices that the U.S. population has seen a significant increase in the percentage of people afflicted with obesity. In 1990 the percentage of obese people in the United States was approximated at around 15%. In 2010, however, it is said that “36 states had obesity rates of 25 percent or higher”(Millar). These rates have stayed consistent since 2003. The obesity problem in America is