Internal Analysis Competitive Strategy Flip Factory competes in the industry by employing a focused differentiation competitive strategy. In the gymnastics club industry, two tiers exist: competitive and recreational. Travis felt that there was an under-served niche in the industry for high-level gymnastics programs aimed at recreational participants. This niche includes former competitive athletes, high preforming athletes who do not have the time to train competitively and beginners who wish to try a broad offering of traditional and non-traditional gymnastics programs. Flip Factory caters to this niche by providing a non-competitive environment that provides fun and challenging fitness for athletes of all skill levels. Resources and Capabilities …show more content…
Flip Factory is highly leveraged as evidenced by a debt ratio of 0.86 in 2013. This means that 86% of the company is financed though debt instruments. While this is ratio is down slightly from the previous year (2012), demonstrating that Flip Factory is slowly paying back its debt, this is still a very high debt ratio. Additionally, flip factory has current ratio that is greater than one (Appendix A) which demonstrates that Flip Factory has no working capital at this time. For these reasons it would be unwise for Travis to go further into debt in order to expand. In addition to poor solvency ratios, Flip Factory also has profitability ratios which have fallen year over year from 2012 to 2013. Despite increased revenue, Flip Factory’s profit margin decreased by almost 3% in 2013 (Appendix B). This is due, in large part, to salaries and wage expenses more than doubling. I can only assume that this increase in salaries can be attributed to the recruitment and hiring of a world class coaching and office staff. If this is the case, then while the profitability ratios have initially fallen, the investment in human resources will pay off in the long term. …show more content…
While Flip Factory continues its operations in this location it should capitalize on its investment in human resources and fully utilise the skills of its coaches. Flip Factory should use these skills and its relationship with the National Circus School to improve their performance gymnastics and circus acts program. Flip Factory has a unique opportunity to fill a demand for circus act programs in Western Canada. I suggest that Flip Factory continues to host the Western Canadian auditions for The National Circus School and use this event as an opportunity to network in the professional performance community. Additionally, I suggest that Flip Factory take out a small loan to add a performance space to the current location. The increased profits from the corporate bookings that will result from this addition will help to pay off the loan and finance further expansion in the long