Bally had been capitalizing on a trend in the early 2000’s where more Americans were becoming devoted to fitness and were attempting to reduce their household or personal obesity levels. It was during this period where a large portion of American society proclaimed to be interested in fitness and understood its importance in physical health. Bally began to target this large segment of “uninitiated believers” as the primary market for potential growth in the firm (Wells, 2008, p.1). Bally quickly became successful, by changing its marketing premise and targeting objectives, to create a rather diverse user profile for its many facilities.
By adding new services that were in-line with the current needs of its vast consumer base, such as Pilates training, yoga, and other core systems, Bally found considerable success and growth. However, growth in much different public and private health clubs and organizations began to take some of Bally’s market share away by using celebrity endorsements or by appealing to niche market groups and then capitalizing on their personal needs to find success, such as with Curves. It was large growth in the competition that harmed Bally’s market position.
Bally maintained many different barriers in terms of entering new markets since the equipment used for fitness cannot be easily converted into newly-marketable products or services. They are designed for physical fitness only. Under Porter’s Five Forces Model, “asset specificity is the extent to which a firm’s assets can be used to produce a different product” (quickmba.com, 2010, p.4). Bally had incorporated specialized training in the firm from outsourced or in-house talent experts, such as Pilates and yoga instructors, whose knowledge and skills could not be transferred into new markets.