Running head: YMCA COMPANY ANALYSIS
Company Analysis: Young Men's Christian Association
Veronica Burton
Saginaw Valley State University
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Young Men’s Christian Association
Purpose of This Paper
The purpose of this analysis is to explore the goals and values of the YMCA by
identifying their strengths and weaknesses as an organization. Although the YMCA proves to be
successful as a non-profit organization while facing the competition of multi-million dollar
fitness centers that frequently change to shape their client’s needs, this analysis will identify
opportunities that could create a competitive advantage for the non-profit organization.
Scope
The analysis will look into the three environments that the YMCA operates in. The first
perspective we will look at is the competitive environment along with the primary focus of the
YMCA and how their focus is not just on one specific group; they focus on youth development,
healthy living and social responsibility, regardless of age, income or background. Next, we will
look into the YMCA and its external environment. This is crucial because the YMCA assists
those that need financial aid, therefore meaning anyone can join the YMCA. With an economy
that is down, individuals should be looking into the YMCA as their recreational center. Finally,
we will look into the internal environment and the role it plays in the operations of the YMCA.
The YMCA successfully fulfills the needs of communities worldwide with their focus by
responding to the issues that affect the communities they serve.
Methodology
The analysis of the YMCA will begin with a look into the history of the non-profit
organization, followed by the current situation of the organization. This section will then lead
into an in-depth SWOT analysis that studies the strengths and weaknesses of the organization, as
well as the opportunities and threats that may arise due to these strengths and weaknesses. The
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SWOT analysis will precede the corporate strategy of the YMCA, along with its advantages and
disadvantages. The analysis will conclude with a look into the social responsibility, international
activities, organizational structure and diversity of the non-profit organization. With the
methodology of the analysis being discussed, the topic will now shift to a historical examination
of the YMCA.
History of YMCA
The YMCA leads all non-profit organizations in the development of youth, healthy living
and social responsibility, offering their services to more than 10,000 neighborhoods across the
country. The organization, which is headquartered in Chicago, Illinois, employs approximately
20,000 full-time employees, as well as nearly 500,000 volunteers. In the United States alone, the
YMCA serves almost 21 million residents, which contributes to the 45 million the organization
engages within 124 different countries (The Y: Organizational Profile, 2013).
YMCA’s Early History
George Williams joined forces with eleven of his friends in 1844 to organize the first
Young Men’s Christian Association (YMCA), which served as a refuge of Bible study, as well
as an escape from the hazardous streets of London where men could unite together with the
common purpose of prayer. Word of the organization’s success spread to the United States,
where a retired Boston sea captain by the name of Thomas Valentine Sullivan put the idea into
use for sailors and merchants. The first U.S. YMCA formed in December of 1851 at the Old
South Church in Boston (The Y: History, 2013).
Shifted Focus of YMCA
The YMCA movement inspired different backgrounds to tailor YMCA’s to meet their
demographics including, but not limited to the formation of YMCA’s or college students, Asians,
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and blacks. YMCA housing began in the 1860’s and included gyms, auditoriums and rooms that
resembled that of a hotel. As the organization continued through the 1870’s and 1890’s, the
YMCA directed itself to focus more on athletics and higher education, creating programs that
promoted these elements. Once the mid-1900’s hit, the organization had exploded with success.
The non-profit worked to help individuals and their families not only through the World Wars,
but also through controversial issues like the Civil Rights Movement. The YMCA became a
home to individuals of color during the 1960’s because it was a place where many blacks could
meet and rally. The YMCA moved forward and banned racial discrimination in 1967 making the
YMCA a bigger home to individuals of the African American decent. In 1992, the non-profit
organization hosted its first Healthy Kids Day. This program has become an annual April event
that emphasizes the importance of activity and play in children (The Y: History, 2013).
Present Day YMCA
The YMCA continues to respond to changes and tragedies in the world as tragedy and
diversity continues to engulf our everyday lives. The organization has fundraised and raised
awareness for crisis’s like September 11, Hurricane Katrina, the earthquakes that took place in
Haiti in 2010 and the Pacific Rim tsunamis. Aside from continually being a place of refuge, the
YMCA has combined with other organizations to continually promote a healthy lifestyle, a
educational lifestyle and a social lifestyle. In 2010, the YMCA revitalized its image and began
referring to itself as its most common nickname – the Y (The Y: History, 2013). Having
discussed the history of the YMCA, it is also important to understand the strengths and
weaknesses, as well as the opportunities and threats of the organization.
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Nature of the Industry
Purpose of SWOT Analysis
The most effective way to evaluate these conditions is through a SWOT analysis, which
is “a comparison of strengths, weaknesses, opportunities, and threats that help executives
formulate strategy” (CITATION 146). The SWOT analysis is efficient because it helps
companies and organizations identify where they can improve and also helps them foresee future
complications or opportunities that could exist. By doing a SWOT analysis on the YMCA, it is
easier get a better understanding of what strengths and weaknesses exist for the non-profit
organization that do not exist for corporations, and how these strengths and weaknesses create
threats and opportunities.
Methodology
The SWOT analysis will begin by discussing the strengths of the organization. From
there, it would be appropriate to identify threats that could appear in the future. The section of
threats will be followed by the weaknesses that are apparent when one looks at the organization.
With weaknesses, there is always the ability to take advantage of new opportunities that could
help the organization grow, which will be the final section of the SWOT analysis.
Strengths
The most important asset a company or organization wants to possess is the support of
the communities in their surrounding areas. The YMCA wins over the hearts of the public with
all of the generous activities they provide to children, families and individuals around the world.
The YMCA is a goodwill program, so they are not in the business world to make a profit; they
are present to raise funds they can give back to communities in need. This strength helps show
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that their motives and goals are pure and parallel to their local communities. Being a non-profit
organization, the YMCA has many other strengths associated with it. The next biggest strength
of the organization is how well known their name is. Their name is so well known because of all
the different ways they help communities around the world. The YMCA serves more than 10,000
communities in the United States alone. Because they are an international corporation, there are
many different cultures that are familiar with the YMCA. This global relationship emphasizes
the idea that they are so well known and respected. Along with globalization of the company
comes the ability to be diverse. There are two different ways that the YMCA is diverse, one way
involving the different ages, races and genders that utilize the facilities offered. The other way
that the YMCA practices diversity is through the different activities they organize for their
members and the community. Because the YMCA is a non-profit organization that is well known
and has the respect of many communities, they also receive donations and team up with larger
corporations.
Threats
Unfortunately, strengths in an organization or company allow lots of opportunities for
things to go bad. With this being said, there are many threats that the YMCA as a non-profit
organization may face. Since the YMCA is known globally, it faces threats in all areas it is
located in. The number one issue United States YMCA’s deal with as a threat is its competition,
which is other fitness centers, but primarily 24-hour facilities. With individuals working different
shifts and having busy schedules, it is not always guaranteed that they will be able to visit the
gym during business hours. Facilities that are open 24/7 allow individuals to work their gym
schedules around their busy schedules. This is an advantage for other fitness centers because
individuals do not want to waste their money on a gym membership they may not use. Also, this
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is an advantage for the 24/7 fitness centers because Americans seem to be going through a phase
of wanting to be healthy, which of course involves utilizing the gym. When facilities are
available at all times of the day, exercising becomes easier for fitness enthusiasts.
The largest threat that exists for foreign YMCAs is a lack of trust. Although the YMCA
is an organization of goodwill, there are individuals that try to scam others under the name of a
non-profit organization. (Look up information for Red Cross Scam). Due to incidents like so, the
YMCA can be looked at a scam as well.
Weakness
After discussing the strengths and opportunities of the Young Men's Christian
Association, we will now look at the weaknesses the company faces. One of the biggest
weaknesses of the YMCA is their inability to evolve. The YMCA is non-profit, which is good
for community involvement and gaining trust from society, but it can also hold them back. A
large percentage of the money that the YMCA makes goes to donating to their surrounding
communities, or to programs that also want to better communities. This is a very good thing from
a humanitarian perspective, but from a business perspective is a weakness. Because so much of
their money goes into helping the society, their buildings and equipment tend to be slightly
outdated. Compared to the larger 24-hour gyms that have become available with state of the art
equipment, the YMCA appears to be behind with their equipment. A possible member might
look into a membership at the YMCA and see that they are community oriented, but ultimately
decide to go to the Planet Fitness across the street based on the sole fact that they will have
access to more up to date equipment, as well as more broader time frames they’re able to visit
the facilities..
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Another weakness we discovered is in their name: Young Men's Christian Association.
Although the YMCA was originally founded to be a Christian organization for young men, their
main focus has shifted from religion to helping children and the community. The main problem
that prohibits the YMCA from prevailing in other countries involves the “C” or "Christian” in
the organization’s name, which may cause other countries to keep distance from the
organization. In China, there are 10 YMCA's (CITATION), however, these locations are not
very well known because religion in China is not expressed as freely as it is in the United States.
Everyone in China is allowed to have whatever religion they believe, but the government does
not allow them to voice their religion. This means that anyone who is a member of the YMCA in
China is legally not allowed to discuss his or her membership. In the United States, we have the
freedom of religion, but other countries with different government policies are not as fortunate to
practice their religion in the open. Because of this, the YMCA is limited globally.
Opportunities
Now that the weaknesses of the YMCA have been acknowledged, the view will shift to
look at some different opportunities they can take from these weaknesses to grow. One option is
the possibility of collaborating with other organizations that share similar interests. The Young
Woman’s Christian Association (YWCA) has nearly the same name, but is not affiliated with the
YMCA. Both of the non-profit organizations have very similar goals in mind that will help better
today's youth, raise money for their communities, and offer activities for families and children. If
the YMCA and YWCA were to join forces, they could create even more opportunities for
community and business growth. Another opportunity the YMCA has is to invest in new
equipment that would help them size up to larger fitness centers. People who are more interested
in the healthy living programs of the YMCA may be more inclined to join if the YMCA had
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more advanced equipment because then not only are they joining an organization with a good
cause, but they are getting the same quality work out.
Summary
Now that the strengths, weaknesses, opportunities and threats of the YMCA have been
evaluated, there is a better understanding of the inner workings of the company. With their
biggest strength being that they are a non-profit organization, the YMCA is the heart of their
communities, which makes their name well known to many people. However, along with this
particular strength of being known may come some big threats. The trait of being non-profit
means that the YMCA is constantly going to rank number two to the fancier 24-hour gyms.
Therefore, the number of potential members is threatened as a result of facilities that have more
to offer. One of the main weaknesses the YMCA faces is that the name of the organization holds
their business back from developing in other countries due to the lack of religious freedom in
some countries, which leads to opportunities for possible growth by collaborating with similar
organizations. Organizations like the YMCA will always have problems that arise but with the
help of a SWOT analysis, they can overcome these problems and in the end potentially come out
even stronger. By looking at the strengths and weaknesses, we are able to see where other
organizations and companies may have a competitive advantage over the YMCA. In the next
section, the strategies the YMCA is taking to protect themselves and size up to their competitors
will be addressed.
Corporate Strategy
What is Strategy?
Making decisions about the long-term goals of a company or organization is the method
of strategic planning (Snell, 2013, p. 133). Companies also develop strategic goals, which are the
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major targets or end results that relate to the long-term survival, value, and growth of the
organization (Snell, 2013, p. 133). By combining a company’s strategic planning and strategic
goals, their strategy is developed. A strategy is a pattern of actions and resource allocations
designed to achieve the goals of the organization. When developing a strategy, a company should
address five questions. The questions relate to if the company will be active, how they will stay
active, how they will win in the marketplace, how fast they will move forward and in what
sequence, and how they will obtain financial returns (Snell, 2013, p. 133). By looking at a
company’s strategy, their drive to stay existent and the direction they want to move in becomes
visible. Competitive forces push companies to acknowledge their stance currently and in the
future because the different forces could affect the company enough to shut them down. By
recognizing these forces, companies are able to better prepare and develop a strategy that is
tailored to these forces.
Competitive Forces
According to Michael Porter, there are five forces that contribute to competition in an
industry. The first force is the threat of new entrants into the industry because they have the
ability to bring new dimensions, they desire the gain of market shares, and they have
considerable amounts of resources (Porter, 2013, p. 3). The seriousness of the new entrant is
dependent on the barriers present and the reaction from existing competitors. There are six main
barriers to entry: economies of scale, product differentiation, capital requirements, cost
disadvantages independent of size, access to distribution channels, and government policy
(Porter, 2013, p. 3-5). Fortunately for existing companies, if the barrier to entry is too high, the
newcomer will not pose a serious threat to the industry. The YMCA experiences threats of new
entrants from more evolved gyms and fitness centers that cater more to needs of individuals.
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The second competitive force is the bargaining power of customers. Consumers tend to
be price sensitive to products that have no differentiation to competitors. Also, the price becomes
sensitive to customers when the product seems expensive compared to their income, as well as
when the quality is not as important to the consumer (Porter, 2013). This force could be seen as a
threat to the YMCA because there are other competitive prices from competitive and more
evolved fitness centers that offer better quality and cater to the hour and equipment needs of
current and potential customers. The next force that competitive industries face is the bargaining
power of suppliers. Suppliers become a competitive force because they have the power in an
industry to raise prices and lower the quality of the products and services they distribute (Porter,
2013). New equipment is a possible way this force could affect the YMCA because they of
course want good quality products, but they also want to acquire them at a reasonable price.
The fourth force that leads to competition within an industry is a substitute product.
There are many substitute services within the fitness industry. According to Porter, substitutes
come into play when development has the ability to increase competition within the industry and
cause price reduction or performance improvement (2013, p. 7). The development and offering
of new fitness programs, boot camps, classes and techniques all contribute to the fate of the
YMCA and other fitness complexes.
The final force that contributes to competition is the jockeying for position among current
competitors. Jockeying for positions is present because competitors use strategies like price
competition, product introduction, and advertising to create rivalry (Porter, 2013). There are
many factors that contribute to the existence of rivalry among competitors – competitors are
numerous and quite equal in size, industry growth is slow, the products and services lack
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differentiation, fixed costs are high, exit barriers are high, and the rivals are diverse in strategies,
origins, and personalities (Porter, 2013, p. 7-8).
With the competitive forces of Michael Porter established, the competitive strategies
must be recognized as well. Strategies can be developed from the forces that create a competitive
industry.
Competitive Strategies
According to A.J Strickland, there are three competitive strategies that companies should
focus on. Striving to be the overall low-cost producer in the industry, seeking to differentiate
one's product offering in one way or another from rivals' products, and focusing on a narrow
portion of the market, rather than going out after the whole market (Strickland, 1989, p. 123156). Implementing all three of these strategies generate success in business.
There are multiple factors a company should look at while striving to be the overall lowcost producer in the industry, some of them include; product emphasis, high productivity per
employee, cost cutting innovations and accepting low profit margins in return for high volume
(Strickland, 1989, p. 124). The YMCA definitely runs their company based of some of these
factors. Since the YMCA is non-profit, they are very familiar with accepting low profits in return
for their good name. They are focused on helping the community rather than making money and
becoming a bigger corporation. The YMCA is not however, the low cost producer in the
industry, but for good reason. Being a member at the YMCA is typically more expensive than at
a local 24-hour gym because they offer so many more programs for children and families to
participate in, other than just fitness. Because they offer so many other programs that help teach
children how to learn and grow as part of a community, it is impossible for them to be the low
cost producer.
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Strickland categorizes product differentiation as frequent innovation, intensive
advertising, having many services, features and options, and premium pricing to cover the added
cost (Strickland, 1989, p.124); in other words, they have to be unique at something buyers
consider valuable. This strategy is where the YMCA shines. The key to their differentiation is
that they are non-profit, but they also differentiate themselves by the countless services they
offer not only their members, but the community as well. In 2011, the YMCA held a day where
they provided free health check ups to children in the community, they raised 6.2 million dollars
to help children in need, and they held countless fundraisers to help the community even further.
The YMCA may be a little more expensive to join than their competitors, but the way they
differentiate themselves brings customers to the door.
Focus is the third competitive strategy that Strickland talks about for success. A focus
aims at building a competitive edge and carving out a market position by catering to the special
needs of a particular group of customers or by concentrating on a limited geographic market
(Strickland, 1989, p. 128). If a company becomes too broad in the products and services it offers,
it is possible that they will become sloppy. If they focus on only a few aspects and become
experts in their field in those limited products and services, they will have a competitive
advantage in the long run. Companies can change their focus once they have perfected certain
areas. The YMCA does a good job using this strategy in defining their ultimate goal, which is
helping children and the community. As far as competitors for the YMCA, none of them even
come close to having such a clear and focused, not to mention well-known, goal. They could
however, benefit from using this focus strategy even further by cutting back on some of their
projects that aren’t quite as successful. Since they offer such a wide variety of programs, they
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would be doing themselves a favor by eliminating certain programs and perfecting the other
programs they would focus on.
Summary
Porter and Strickland have different views of strategy, but both are equally effective and
can help the Youth Men's Christian Association have a competitive advantage over their
competitors. Porter has businesses look at the five forces that fuel competition and help a
company develop their strategy to overcome each force, and in the end, defeat their competitor.
Strickland addresses the three competitive strategies that help businesses have a cunning edge on
their competitors. He believes that if a company is the low-cost producer in their field,
differentiates their product, and focuses on certain aspects of their business instead of becoming
too broad, a company will have a competitive advantage over any other company in its field. The
YMCA definitely uses some of these strategies, such as (ANDREA ADD SOMETHING FROM
PORTER HERE), differentiation of their product and being non-profit and focusing on their
main goal of helping children and the community.
After looking at the competitive forces and strategies that help businesses to have a
competitive advantage over similar companies, it is important to look at the social
responsibilities of the YMCA. Why they are non-profit, and what companies actually benefit
from the YMCA being in business.
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References
Porter, M. E. (1979). How competitive forces shape strategy. Harvard Business Review.
Retrieved from http://prolog.univie.ac.at/teaching/LVAs/KFK-LM/WS07/Porter.pdf.
The Y. History (2013). Retrieved from: http://www.ymca.net/history/founding.html
The Y. Organizational Profile (2013). Retrieved from: http://www.ymca.net/organizationalprofile
Thompson, A. A., & Strickland, A. J. (1989). Competitive Strategies and Competitive
Advantage. Strategy Formulation and Implementation: Tasks of the General Manager
(4th ed., pp. 122-156). Homewood, IL: BPI/Irwin.