Analysis to Provide The Best Location for New BVeryFit Leisure Centre

By Aldo Alpendus – Z5125003

1.0 Introduction

BVeryFit Leisure Centre, a sports and physical recreation centre, would like to build up a new leisure
centre which offering a gymnasium, a fitness centre and an indoor swimming pool in New South
Wales region. This leisure centre aiming three potential customer which are young children who will
undertaking swimming lessons and kindygym, young adults who will trying to improve fitness and
seniors who prefer low impact exercise such as water aerobics and yoga. There are three potential
Local Government Areas (LGA) to set up this leisure centre which are Fairfield, Randwick and
Willoughby. To make sure the business will running well in the future, there are several criteria that
the owner should to consider which are population and population density, the economic capacity of
future customers, the availability of workers with sports and physical recreation background,
competitors, ease of access to the leisure centre and also the land cost.

2.0 Methodology

The methodology used in this analysis is weighted criteria scoring method. This method provides a
systematic process for selecting projects based on several criteria. The criteria which have been
selected then weighted with total weight of 100%. Every criteria then compared within three LGA by
assign a score from 1–3 which 1 = low, 2 = medium and 3 = high. After assigning the weights and
scores for each criteria, author calculate the weighted score by multiplying the weight for each
criterion by its score and adding the resulting values. LGA with the highest total score will become
the best candidate for the new leisure centre.

Formula,

𝑇𝑜𝑡𝑎𝑙 𝑆𝑐𝑜𝑟𝑒 = 6.67𝑎 + 6.67𝑏 + 6.67𝑐 + 6.67𝑑 + 6.67𝑒 + 10.0𝑓 + 0.0.075𝑔 + 10.0ℎ + 10.0𝑖 + 10.0𝑗
+ 20.0𝑘

Where,

𝑎: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑔: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝐶𝑜𝑚𝑝𝑒𝑡𝑖𝑡𝑜𝑟𝑠

𝑏: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝐷𝑒𝑛𝑠𝑖𝑡𝑦 ℎ: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝐷𝑒𝑛𝑠𝑖𝑡𝑦 𝑃𝑒𝑟
𝑐: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝑃𝑜𝑡𝑒𝑛𝑡𝑖𝑎𝑙 𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟 − 𝐿𝑒𝑖𝑠𝑢𝑟𝑒 𝐶𝑒𝑛𝑡𝑟𝑒
𝑑: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝐼𝑛𝑐𝑜𝑚𝑒 𝐿𝑒𝑣𝑒𝑙 𝑖: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝐷𝑖𝑠𝑡𝑎𝑛𝑐𝑒 𝑡𝑜 𝐿𝑒𝑖𝑠𝑢𝑟𝑒 𝐶𝑒𝑛𝑡𝑟𝑒
𝑒: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝑀𝑒𝑑𝑖𝑎𝑛 𝐼𝑛𝑐𝑜𝑚𝑒 𝑗: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝑇𝑟𝑎𝑛𝑠𝑝𝑜𝑟𝑡𝑎𝑡𝑖𝑜𝑛 𝐴𝑙𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑣𝑒𝑠
 𝑓: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝑃𝑜𝑡𝑒𝑛𝑡𝑖𝑎𝑙 𝑊𝑜𝑟𝑘𝑒𝑟𝑠 𝑘: 𝑆𝑐𝑜𝑟𝑒 𝑜𝑓 𝐿𝑎𝑛𝑑 𝐶𝑜𝑠𝑡

No Criteria Weight (%)

Socio-Economic Factors 40.00

1 Population 6.67

2 Population Density 6.67

3 Potential Customer 6.67

4 Income Level 6.67

5 Median Income 6.67

6 Number of Potential Workers 6.67

Competitors Already Exist 20.00

7 Competitors 10.00

8 Customer Density Per-Leisure Centre 10.00

Easy of Access to Leisure Centre 20.00

9 Distance to Leisure Centre 10.00

10 Alternatives of Transportations 10.00

Cost of Land Purchase or Long Term Lease 20.00

11 Land Cost 20.00

TOTAL 100.00

Table 1 Assigned weight for each criterion

3.0 Analysis

This section will present the analysis for each measurement used for Fairfield, Randwick and
Willoughby.
3.1 Population and Density

The population size and the density are very important indicators for BVeryFit Leisure Centre to
ensure the availability of potential customer. Higher the population means more potential customers
will be going to leisure centre. While denser population means the population is more concentrated
in which it would also be good for the business. Figure 1 shows that Fairfield population is the most
populated LGA with total 187.767 people. However, in terms of density, Randwick is the most densely
populated LGA with 3.583 people per-kilometres square. LGA with higher population and LGA with
higher density will get greater score.
 PO PU LAT IO N & DEN SIT Y
200,000 187,767 4,000
3,583
150,000 128,988 2,929 3,000

100,000 1,841 67,356 2,000

50,000 1,000

- -
Fairfield (C) Randwick (C) Willoughby (C)
Population Density (Rhs)

Figure 1: Population size and Density year 2011 (Source: Australian Bureau of Statistics, processed)

3.2 Potential Customers

Specified target market who will use the facilities of BVeryFit Leisure Centre are young children,
young adult and senior groups. Authors categorizing young children as a children from 2 to 8 years
old. Young adult are people who’s age from 18 to 35 years old, and senior who’s age more than 65
years old. Figure 2 provides the number of potential customers in each LGA. In this category, Fairfield
has total 87.346 of young children, young adult and senior, which is the most number of potential
customers comparing with two others LGA. Randwick is the second highest with 69.909 potential
costumer and Willoughby has lowest number with only 32.316 people. The LGA with higher number
of potential customer then will having higher score.

Potential Customer (By Group of Age)

100,000
90,000 87,346
80,000
70,000 69,909
60,000
50,000
40,000
30,000 32,316
20,000
10,000
-
Fairfield (C) Randwick (C) Willoughby (C)
Seniors (65+) Young Adults (18-35)
Young Children (2-8) Total

Figure 2: Group of Age population year 2011 (Source: Australian Bureau of Statistics)

3.3 Income Level

Personal income is another important consideration to choose location of the leisure centre. With
higher income, people will have higher possibilities to spent their money to go to leisure centre.
Author using two indicators to measure the income which are annual income and median income.
For annual income, author categorize the income level into three categories which are low, middle,
and high income. The low level income is those who earn $1 to $20,799 in a year, while middle income
is people with annual income between $20,800 and $64,999. As for high income group consists of
people with incomes of $65,000 or more. Median income also decent of consideration because it’s
showing the average income in each LGA The LGA which having highest percentage in high and middle
income category and which having higher median income then will get greater score. Figure 3 shows
that Willoughby holds the highest numbers of all categories. This LGA have total 76% of people whose
in range of middle and high income, with annual median income $1.033.

Personal Income (annual) 76 %

60.00% $1,200.00
60.39 % 73.64%
50.00% $1,033.79 $1,000.00

40.00% $855.84 $800.00

30.00% $600.00

20.00% $444.92 $400.00

10.00% $200.00

0.00% $-
Fairfield (C) Randwick (C) Willoughby (C)
Low Income ($1-$20,799) Midle Income ($20,800-$64,999) High Income ($65,000 or more) Median (Rhs)

Figure 3: Household Income year 2011 (Source: Australian Bureau of Statistics, processed)

3.4 Potential Workers

Considering labor supply also important to the business. Set up a new leisure centre where scarcity
of workers exist would increase the cost of the workers. BVeryFit Leisure Centre then have to observe
potential workers at those three candidates area that having related expertise to the business. Figure
4 showing the information of number of potential workers with expertise in sports and physical
recreational activities industry. The figure shows that Randwick has the highest number of available
sports and physical recreational activities workers, followed by Fairfield and Willoughby. The LGA
with higher number of potential workers will get greater score.
 Number of Worker in Sports & Physical
600
Recreation Activities
500
400
300 526
200
100 290 161
0
Fairfield (C) Randwick (C) Willoughby (C)

Figure 4: Number of potential worker year 2011 (Source: Australian Bureau of Statistics)

3.5 Competitors

Another indicator that appropriate to be noticed is the existing competitor around those three LGA.
Unlike the other criteria where the higher the better, the higher the number of competitors, the
lower scores obtained for each LGA. Authors also consider the density in handling the customer per
existing leisure centre. The LGA with higher density will get greater score because it brings higher
opportunities for existing customer to switch to new leisure centre. Figure 5 show that Randwick is
the most competitive area with thirteen competitors. Yet, Fairfield is the most densely customers
with each existing leisure centre average handling 20.863 customers.

Number of Competitors Within Area & Services of Customer

per Leisure Centre

14
16 25,000
14
20,863 20,000
12
10 9 15,000
8 13,471
6 9,213
5 10,000
4
5,000
2
0 -
Fairfield (C) Randwick (C) Willoughby (C)
Leisure&Fitness Centre (LC) Density per LC (Rhs)

Figure 5: Number of existing competitors (Source: Google Maps, processed)

3.6 Easy to Access

To measure the easy access to the location candidate, author consider two factors which are time
and travelled distance and also number of alternatives transportation from CBD 1 Martin Place to the
LGA location. The CBD 1 Martin Place had chosen because author assuming that majority of people
working on that area. Figure 6 shows Fairfield is the most distance location with 34,2 km from CBD,
using car will take 56,7 minute and by bus or train will take average 85,5 minute. The greater distance,
the lower scores obtained by LGA. Figure 6 also shows Fairfield and Randwick have five alternatives
way to reached. For instance to go to Randwick from CBD 1 Martin Place, people could use five
alternatives transportation which are: a) by car, b) using bus number 374, c) using bus number 373 -
continued with bus number 377, d) using train south coast line - continued with eastern suburb line
- continued with bus number 348 and continued with bus number 400, and e) using train eastern
suburb line - continued with bus number 418. The LGA with higher number of alternatives will get
greater score.

(MINUTES/KM) Access to Leissure Centre

90 6
80 5 5
5
70
60 4
50 85.5 3
3
40 56.7
30 36 2
20 34.2
10 7.3 19.5 9.35 15 26 1

0 0
Fairfield (C) Randwick (C) Willoughby (C)
Distance By Car By Bus/ Train Alternative Transport (Rhs)

Figure 6: Distance & Alternatives Transport (Source: Google Maps, processed)

3.7 Cost of the Land

Building a new leisure centre is pretty expensive. BVeryFit Leisure Centre have to be concerned about
the price of land which is very high in New South Wales area. The higher the price of land, the lower
the score obtained LGA. Figure 7 show that Fairfield has the lowest land price with average
$801,47/m2, followed by Willoughby and Randwick.
 Median Commercial Land Value (LV) - per-July
2016
$6,000.00
$5,069.25
$5,000.00
$3,900.20
$4,000.00

$3,000.00

$2,000.00
$801.47
$1,000.00

$-
Fairfield (C) Randwick (C) Willoughby (C)

Figure 7: Cost of the land (Source: valuergeneral.nsw.gov.au, processed)

4.0 Conclusion and Suggestion

After analyzing the combination of each criteria in this report and also calculate the weighted score
by multiplying the weight for each criterion by its score, BVeryFit Leisure Centre should open its
leisure centre in Fairfield as it has the highest weighted score. Table 2 below showing the calculation
that Fairfield get total score of 218,33, which is higher then Willoughby 203,33 and Randwick 178,33.

Score of LGA Weighted Score of LGA

Weight
No Criteria Fairfield Randwick Willoughby Fairfield Randwick Willoughby
(%)
(C) (C) (C) (C) (C) (C)
1 Population 6.67 3 2 1 20.00 13.33 6.67
2 Population Density 6.67 1 3 2 6.67 20.00 13.33
3 Potential Customer 6.67 3 2 1 20.00 13.33 6.67
4 Income Level 6.67 1 2 3 6.67 13.33 20.00
5 Median Income 6.67 1 2 3 6.67 13.33 20.00
6 Number of Potential Workers 6.67 2 3 1 13.33 20.00 6.67
7 Competitors 10.00 2 1 3 20.00 10.00 30.00
8 Customer Density 10.00 3 1 2 30.00 10.00 20.00
9 Distance to Leisure Centre 10.00 1 2 3 10.00 20.00 30.00
10 Alternatives of Transport 10.00 2.5 2.5 1 25.00 25.00 10.00
11 Land Cost 20.00 3 1 2 60.00 20.00 40.00
TOTAL 100.00 22.50 21.50 22.00 218.33 178.33 203.33

Table 2 Summary of Weighted Score (Source: Data processed by author)

Reference
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https://www.google.com.au

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