Fitbit: The Business about Wrist SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Fitbit: The Business about Wrist
On August 3, 2015, Fitbit, Inc.'s (Fitbit) stock price hit an all-time high of $50.99. A few months earlier, when Fitbit went public on June 18, it had opened on its first day of trading at a price of $30.40 - 52 per cent higher than its initial public offering price. As what appeared to be the most successful initial public offering of the year, Fitbit attracted significant attention and inevitably drew controversy as well. Some investors saw great potential and a promising future for Fitbit. Others were less positive, calling it a fad without any real opportunity for future development. In the face of growing competition from rivals with more extensive consumer bases, Fitbit wanted to ensure that it achieved sustainable growth. What was Fitbit, and what could it become? The question concerned not only potential investors but also the chief executive officer of the high-tech company.
Swot Analysis of "Fitbit: The Business about Wrist" written by Xiaoke Xu, Xin Shane Wang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fitbit 30.40 facing as an external strategic factors. Some of the topics covered in Fitbit: The Business about Wrist case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Fitbit: The Business about Wrist casestudy better are - – there is backlash against globalization, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, geopolitical disruptions, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Fitbit: The Business about Wrist
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fitbit: The Business about Wrist case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fitbit 30.40, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fitbit 30.40 operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Fitbit: The Business about Wrist can be done for the following purposes –
1. Strategic planning using facts provided in Fitbit: The Business about Wrist case study
2. Improving business portfolio management of Fitbit 30.40
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fitbit 30.40
Strengths Fitbit: The Business about Wrist | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fitbit 30.40 in Fitbit: The Business about Wrist Harvard Business Review case study are -
Ability to recruit top talent
– Fitbit 30.40 is one of the leading recruiters in the industry. Managers in the Fitbit: The Business about Wrist are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Fitbit 30.40 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Fitbit 30.40 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fitbit 30.40 has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Effective Research and Development (R&D)
– Fitbit 30.40 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Fitbit: The Business about Wrist - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Fitbit 30.40 is one of the most innovative firm in sector. Manager in Fitbit: The Business about Wrist Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Fitbit 30.40 is present in almost all the verticals within the industry. This has provided firm in Fitbit: The Business about Wrist case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Fitbit 30.40 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Fitbit: The Business about Wrist Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Fitbit 30.40 in the sector have low bargaining power. Fitbit: The Business about Wrist has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fitbit 30.40 to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Fitbit 30.40
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fitbit 30.40 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Fitbit 30.40 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fitbit 30.40 has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Learning organization
- Fitbit 30.40 is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Fitbit 30.40 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fitbit: The Business about Wrist Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Fitbit 30.40 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Fitbit: The Business about Wrist HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Fitbit: The Business about Wrist | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fitbit: The Business about Wrist are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Fitbit: The Business about Wrist, is just above the industry average. Fitbit 30.40 needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Low market penetration in new markets
– Outside its home market of Fitbit 30.40, firm in the HBR case study Fitbit: The Business about Wrist needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Fitbit 30.40 has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Fitbit: The Business about Wrist, it seems that the employees of Fitbit 30.40 don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Xiaoke Xu, Xin Shane Wang suggests that, Fitbit 30.40 is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Fitbit 30.40 supply chain. Even after few cautionary changes mentioned in the HBR case study - Fitbit: The Business about Wrist, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fitbit 30.40 vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Fitbit 30.40 needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Fitbit: The Business about Wrist HBR case study mentions - Fitbit 30.40 takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fitbit 30.40 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Fitbit: The Business about Wrist can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Fitbit: The Business about Wrist, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Fitbit: The Business about Wrist, in the dynamic environment Fitbit 30.40 has struggled to respond to the nimble upstart competition. Fitbit 30.40 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Fitbit: The Business about Wrist | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Fitbit: The Business about Wrist are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Fitbit 30.40 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Fitbit 30.40 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fitbit: The Business about Wrist suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Developing new processes and practices
– Fitbit 30.40 can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Leveraging digital technologies
– Fitbit 30.40 can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Fitbit 30.40 can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fitbit 30.40 can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– Fitbit 30.40 has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Fitbit 30.40 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Fitbit: The Business about Wrist - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fitbit 30.40 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fitbit 30.40 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Fitbit 30.40 to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Fitbit 30.40 has opened avenues for new revenue streams for the organization in the industry. This can help Fitbit 30.40 to build a more holistic ecosystem as suggested in the Fitbit: The Business about Wrist case study. Fitbit 30.40 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Fitbit 30.40 in the consumer business. Now Fitbit 30.40 can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fitbit 30.40 to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Fitbit 30.40 to hire the very best people irrespective of their geographical location.
Threats Fitbit: The Business about Wrist External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fitbit: The Business about Wrist are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fitbit 30.40 can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Fitbit: The Business about Wrist .
Environmental challenges
– Fitbit 30.40 needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Fitbit 30.40 can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Fitbit 30.40 needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fitbit 30.40 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Fitbit 30.40 demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Fitbit 30.40 is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Fitbit 30.40 has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Fitbit 30.40 needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Fitbit 30.40 will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fitbit 30.40 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Fitbit 30.40 in the Sales & Marketing sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Fitbit 30.40.
Weighted SWOT Analysis of Fitbit: The Business about Wrist Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Fitbit: The Business about Wrist needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Fitbit: The Business about Wrist is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Fitbit: The Business about Wrist is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Fitbit: The Business about Wrist is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Fitbit 30.40 needs to make to build a sustainable competitive advantage.