A local gymnastics studio offers dance, tumbling, trampolines, and competitive cheer training for kids of all ages. To recruit students for these lessons, the studio also hosts birthday parties, afterschool care, and swim lessons. These offerings interact to
Multiple Choice
choose which strategy not to follow.
diversify the corporate-level strategy.
mount an effective defensive strategy.
create fit among the activities.
The Correct Answer and Explanation is:
Correct Answer: Create fit among the activities.
Explanation (300+ words):
The correct answer is “create fit among the activities.” This phrase refers to a key concept in strategic management, particularly as described by Michael Porter. According to Porter, “fit” is about ensuring that various activities and services a business offers are aligned and mutually reinforcing, thereby creating a sustainable competitive advantage.
In the case of the gymnastics studio, the main objective is to provide training in gymnastics-related disciplines like dance, tumbling, trampolines, and competitive cheer. These are the core services. However, the studio also hosts birthday parties, offers afterschool care, and teaches swim lessons. While these might initially seem like unrelated services, they actually support the studio’s core business in important ways:
- Birthday parties can serve as an introduction to the studio’s environment, facilities, and instructors. Children who attend a party may later enroll in regular classes.
- Afterschool care creates a structured opportunity for children to be present at the studio during weekdays, which can increase enrollment in evening classes or workshops.
- Swim lessons, while not directly related to gymnastics, appeal to a similar customer base—parents looking for physical activities for their children—and can help retain customers year-round by offering varied activities.
These services do not operate in isolation; rather, they interact in ways that support the studio’s main goals. The term “fit” describes this alignment, where one activity strengthens the value or effectiveness of another. This synergy reduces costs through shared resources (such as space and staffing) and increases customer loyalty by creating a comprehensive and engaging environment for children.
Thus, instead of randomly expanding into unrelated services or markets, the studio integrates complementary offerings that enhance its main service. This strategic alignment boosts efficiency, customer retention, and brand reputation—all outcomes of creating a fit among activities.