First, please list a few viable alternatives worth considering. Explore alternatives not explicitly mentioned.Also note the major pros and cons of the alternatives (although this is not necessarily required).

Second, offer a specific recommendation and provide ample reasoning.

Here is the article:

former Olympic coaches and athletes. His staff- ited dinner menu using reputable area caterers on to-member ratio was high compared with most a pay-as-you-go basis, at a cost of about 20% less other clubs. And he had deliberately created than Transition's. And although it didn't occupy high-cost facilities, asking his architect to survey super-prime locations like Transition's, it had man- the top health clubs in each Transition city and aged to open facilities within walking distance of then to design spaces that were 30% larger than twelve of Transition's clubs in the United States. the existing highest standard. Maintaining such Fitworth had also set up a reciprocal-membership plush facilities in prime locations wasn't what alliance with Japan's Mind and Body spas, which anyone would call cheap. had facilities throughout the Asia-Pacific region, What's more, the club's niche suddenly and with England's True Worth clubs. seemed precarious. Market share was difficult to Gordon resigned himself to his tense mood track, but Gordon's sense was that the number of and mentally reviewed the situation. Besides Fit- companies entering the high-end health club worth, he was worried about Clarkhouse, a top- and spa scene was growing fast, even though rated hotel chain that had recently opened its Transition had stalled. To top it off, Transition's own line of health clubs. True, Clarkhouse was membership was aging. The average member not in quite the same league as Printemps, but it age was now 46; ten years ago, it had been 41. had one clear advantage: whereas Printemps had Gordon, a former senior executive at Moira only 35 locations worldwide, Clarkhouse had Point, an exclusive California golf club, was in his more than 250. Whenever the regular clientele of large, modern office at Transition's Chicago fa- Printemps visited cities without a Printemps cility. From his desk, he could see through a one- hotel, most turned to Clarkhouse. way mirror into the weight room. He leaned Gordon left his office and walked down the back in his chair and watched his business work- hall to get a drink of water. There was yet an- ing. The Nautilus circuit was busy but not too other issue on his mind. A midprice Los Angeles- crowded, and seven of the eight step machines based hotel group, the Ambassador hotels, had were also in use. Not bad, given that it was al- approached him with a proposal to carry the ready 8 P.M. on a Thursday Transition clubs at its locations worldwide. Ex- He thought about the competition and told panding was an exciting prospect, and Ambassa- himself to calm down. Technically, Transition dor was a well-respected international chain. But didn't have competition. It was an elite organiza- it wasn't anywhere near the top of the line, like tion: the only one of its kind. He took a deep Printemps or Clarkhouse. Working with Ambas- breath and picked up his copy of the Wall Street sador would mean expanding not only Transi- Journal, but almost immediately, he could feel his tion's reach but also its target market. Would that blood pressure rise again. There, on page 9, was a work? And how would the Printemps manage- full-page ad for the Fitworth health club chain. ment react to the alliance? Manhattan-based Fitworth was one of the success- Returning to his comfortable office, Gordon sat ful recent start-ups, and the company's new cam- down at his computer. He began to type out his paign was clearly an attack on Transition. thoughts. He would fax them to Scott Conner, his "Sure, you can afford it, but why pay for some- director of sales and marketing and get his thing you don't use?" was the slogan-a direct feedback. shot at Transition's all-inclusive, one-price mem- Friday night, almost 10:30 P.M. It was time for pership plan. Transition charged a $600 initiation Transition's flagship facility to shut its doors for fee, plus $2,300 per year for a membership. Food the night. But Scott Conner was still on the phone and beverages were extra-available at prices with Gordon, trying to make some sense of the comparable to finer casual restaurants in New new plan for expansion and pricing that Gordon York City. Fitworth charged an $800 initiation but, had faxed to him early that morning. He'd been after that, the yearly membership fee depended on this call for almost two hours, and he was more on which of a large variety of service packages the confused and dismayed now than he'd been at the individual member chose. For example, a $1,000 outset. yearly fee included unlimited use of facilities, with "Our whole philosophy is based on the notion an additional hourly charge for staff assistance. A that we're a unique premium offering," Scott $1,500 yearly fee included access to the facilities, said, acknowledging a knock at the door with a Regina Fazio Maruca is an associate training staff, and massage therapists. Fitworth did nod and waving Kim Cole, the company's num- editor at HBR not provide in-house chefs. But it did offer a lim- ber one sales associate, into a seat. "Our salesstaff has been trained to position this health club Scott, but Gordon has a really good idea here. I as a top-of-the-line product: one price covers mean, we might be the top of the line right now, everything. We can't offer less; we can't sell less. but we do charge more than anyone else, and our When we talk to prospective members, we im- target market is limited. I do what I can to manage plicitly put down the other kinds of clubs and costs, but if we don't grow, it'll be a real squeeze. spas-sometimes we even do it directly. You're The budget keeps growing, and the only way I can undermining the core strategy here, and if we do maintain quality facilities is if we grow revenues. it your way, we'll be cutting our own throats." Only a certain group of people is ever going to use Scott was quiet for a few moments, then a Transition club. Gordon is an entrepreneur, and spoke again. "No, I completely oppose this. You can't trade off our reputation like that. We'll be I agree with him that it's time to find a way to expand, or at least broaden our niche." just like everyone else. I don't.Well, we'll just He took a drink of beer and continued quickly have to...Can I just say one thing?" He was silent before Scott could start up again. "You said Gordon again. Kim rolled her eyes. proposes that we drop our annual fee and instead Fine, we'll meet on Tuesday at 3. Chicago. charge a high, one-time initiation fee with a corpo- Yes." He hung up, then mustered a small smile rate discount and package pricing for various ser- for Kim. "Well, as you can see, Gordon isn't going vices. He's done the math; the projections look solid to let this new idea of his die without a fight." to him. What's wrong with that? At least a third of Kim knew about Gordon's plan. Scott had our members don't use the full club anyway. Who shared the initial memo with her that morning, wants to pay for a massage they never get, regard- and she, too, had been incredulous. But she was less of their income? And what's wrong with using also pragmatic. "If he's convinced, there's really the Transition name at Ambassador hotels? That's nothing you can do about it," she said, shrug- expansion. You know we don't have anyplace to ex- Lately margins were ging. "It's his company. And maybe he's right. pand at the top: why not go down a notch?" shrinking: the club's niche You're just coming at this from the sales per- "Would Tiffany sell a cheap line of jewelry at spective. Gordon is thinking of the company as a department store boutique?" Kim cut in. now seemed precarious. a whole. "Can't you see? We'll lose our marketing edge." 'But it can't work his way." Scott got out of his chair and grabbed his jacket off the coat rack. 'Not if it's done properly," Frank countered. He "Let's round up Frank and get out of here." turned to Scott. "When are you going to meet with Gordon about this? I think you should tell Frank Casale, Transition's director of opera- him what you think, but keep an open mind." tions and facilities, was in his office working on Monday morning, 7:30 A.M. Gordon finished domestic budgets. "It's about time," he said, as reading Scott's five-page memo for the third time Scott and Kim appeared at his door. He shut and then got up to get another glass of orange down his computer and grabbed his jacket juice from the club's kitchen. He thought Scott Frank, Scott, and Kim had a standing meeting had valid concerns, but he knew that he didn't every Friday night after work. Their long hours pre- need Scott's approval to make a decision. He also cluded any kind of normal Friday night socializing knew that he didn't have to make any decision with their families or friends, so the trio generally right away. He had calmed down since Thursday. went to a small restaurant and bar downtown to In fact, if he put off making a move now, he eat their artery clogging meat-and-potatoes meal could explore another idea: opening Transition and just unwind. There was a rule: nothing said at satellite spas at certain corporate headquarters. dinner left the table. And generally the meals were Really, the possibilities were endless. fun; there was a lot of teasing and laughter about the week's events. But tonight was a different story. First, Scott and Kim brought Frank up to date on Can Transition expand without losing its the memo; then Scott rehashed his conversation elite aura? with Gordon. Frank listened quietly as he ate. But when Scott said, "I tell you, Gordon has lost his mind," for the Reprint 95205X third time, Frank spoke up. To order, call 800-988-0886 "I hate to be the one to burst your bubble, or 617-783-7500 or go to www.hbr.orgby Regina Fazio Maruca It was a great idea. The first of its kind. A series It wasn't just clever marketing. True, the initial of ultrapremium health clubs located in major campaign-a targeted direct-mail effort featuring cities throughout the world. Targeted at senior an endorsement from four-time Wimbledon win- executives too busy to eat. Frequent business ner Julia Sonoma-had generated a solid re- travelers. Singles. People who just plain liked sponse. And Transition advertised regularly in the extra attention and pampering and could publications such as the New York Times, Town afford to pay for the best. and Country, and the London Times. But word of And it really had taken off. Since its flagship mouth also had served the company well. Transi- club had opened at one of New York City's most tion was elite-offering top-of-the-line services to prestigious addresses 15 years ago, Transition's sales a select clientele-and its reputation had spread had doubled each year. The first location, a quickly throughout the ranks of wealthy jet- 25,000-square-foot facility with 14 full-time staff setters and business travelers. Early on, it had de- members, plus numerous sales associates, was veloped a reputation as the Tiffany of health almost maxed out at 2,300 members. Within its clubs. And its name became known worldwide as first two years of operation, Transition had the best of the best. opened similarly popular facilities in other Despite the success, however, owner and pres- major cities: Chicago, Washington, Los Angeles, ident Gordon Johnston was feeling unsettled. London, Paris, Milan, Singapore, Hong Kong, Transition's margins were shrinking. In the past and Tokyo. Within five years, it was also operat- 12 months, sales growth had flattened, while op- ing through the five-star Printemps hotels, of- erating expenses had continued to rise. Gordon fering its services to guests. had to pay a premium for celebrity chefs and HBR's cases, which are fictional, present common managerial dilemmas and offer concrete solutions from experts