Str/581 Week 4 Paper

Inner Spirit Martial Arts: Strategic Initiatives

Richard S. Stainback Jr.

STR/581

July 30, 2012

Victor Rayneri

Inner Spirit Martial Arts: Strategic Initiatives

Inner Spirit Martial Arts (ISMA) is entering the market with two main competitors, Byung Lee’s Academy and Charles June Karate. Both of these organizations have been in the market for nearly 30 years. In order for ISMA to gain a competitive advantage and successfully enter this market a cost leadership and differentiation strategy will be utilized. This will be achieved through the introduction of the credit-based accrual system designed for rank progression.

Cost Leadership Strategy

“A firm that chooses a cost leadership business strategy focuses on gaining advantages by reducing its economic costs below all of its competitors.” (Barney, 2007) ISMA will achieve this initiative by specializing and focusing on strictly martial arts instruction. Currently there are no plans to offer afterschool programs or summer camps. This initiative will reduce overall overhead by reducing the amount of space needed for instruction, the amount of employees needed to operate and the number of regulatory licenses needed to facilitate afterschool and summer camp programs.

Current Market State

Charles June’s Karate Institute currently offers taekwondo lessons for an average rate of 125 dollars per month. This entitles the member to attend classes two times per week for the four weeks. Byung Lee’s King Tiger Academy currently offers taekwondo lessons for an average of 115 dollars per month. This entitles the member to attend three classes per week for the four weeks. (Byung Lee's King Tiger Taekwondo, 2012) The rates reflected include membership for one person with a cascading discount for families. Since ISMA is focused solely on instruction based services, cost for summer camps and afterschool programs will not be evaluated. These fees are imposed if the member comes to class or misses the instruction. The rates...