Case Study Description of Fitpass: Toward Democratizing Fitness
It was July 2017 when the co-founders of Fitpass Business Ventures Private Ltd. (Fitpass), an online platform providing passes to fitness establishments in the Delhi-National Capital Region, were reflecting on the need for continuous innovation to stay relevant to their users. Launched in June 2015, the company intended to satisfy the unmet market need for flexible workout options at an affordable price for fitness-conscious Indian youth. The company's application, FITPASS, had been downloaded 100,000 times, and the company had gained 60,000 registered users and created a partner network of 1,500 fitness establishments in the region. Generating 100 per cent growth in month-on-month revenue, the company was among the leading platforms in this region. However, the online marketplace was becoming crowded with look-alike competitors, and the founders faced some tough questions: How could the company sustain its position in the current market? Was the company ready to move into other similar markets using the current business model and innovative capabilities? Anupama Prashar and Leena Ajit Kaushal are affiliated with Management Development Institute.
Swot Analysis of "Fitpass: Toward Democratizing Fitness" written by Anupama Prashar, Leena Ajit Kaushal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fitpass Fitness facing as an external strategic factors. Some of the topics covered in Fitpass: Toward Democratizing Fitness case study are - Strategic Management Strategies, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the Fitpass: Toward Democratizing Fitness casestudy better are - – central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Fitpass: Toward Democratizing Fitness
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fitpass: Toward Democratizing Fitness case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fitpass Fitness, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fitpass Fitness 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 Fitpass: Toward Democratizing Fitness can be done for the following purposes –
1. Strategic planning using facts provided in Fitpass: Toward Democratizing Fitness case study
2. Improving business portfolio management of Fitpass Fitness
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fitpass Fitness
Strengths Fitpass: Toward Democratizing Fitness | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fitpass Fitness in Fitpass: Toward Democratizing Fitness Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Fitpass Fitness in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Fitpass Fitness has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Fitpass: Toward Democratizing Fitness 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.
Innovation driven organization
– Fitpass Fitness is one of the most innovative firm in sector. Manager in Fitpass: Toward Democratizing Fitness 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
– Fitpass Fitness is present in almost all the verticals within the industry. This has provided firm in Fitpass: Toward Democratizing Fitness 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.
Analytics focus
– Fitpass Fitness is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Anupama Prashar, Leena Ajit Kaushal can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Fitpass Fitness in the sector have low bargaining power. Fitpass: Toward Democratizing Fitness has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fitpass Fitness to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Fitpass Fitness
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fitpass Fitness does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Fitpass Fitness 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 Fitpass: Toward Democratizing Fitness - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Fitpass Fitness are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Technology & Operations field
– Fitpass Fitness is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Fitpass Fitness in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Fitpass Fitness has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fitpass Fitness 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.
Learning organization
- Fitpass Fitness 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 Fitpass Fitness is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fitpass: Toward Democratizing Fitness Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Fitpass: Toward Democratizing Fitness | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fitpass: Toward Democratizing Fitness are -
Aligning sales with marketing
– It come across in the case study Fitpass: Toward Democratizing Fitness that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Fitpass: Toward Democratizing Fitness can leverage the sales team experience to cultivate customer relationships as Fitpass Fitness is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Fitpass: Toward Democratizing Fitness, it seems that the employees of Fitpass Fitness 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.
Capital Spending Reduction
– Even during the low interest decade, Fitpass Fitness has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 Fitpass Fitness supply chain. Even after few cautionary changes mentioned in the HBR case study - Fitpass: Toward Democratizing Fitness, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fitpass Fitness vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Fitpass Fitness is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Fitpass Fitness needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fitpass Fitness to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fitpass Fitness is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Fitpass: Toward Democratizing Fitness 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 Fitpass: Toward Democratizing Fitness, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
High cash cycle compare to competitors
Fitpass Fitness has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Fitpass: Toward Democratizing Fitness, is just above the industry average. Fitpass Fitness 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Anupama Prashar, Leena Ajit Kaushal suggests that, Fitpass Fitness 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 operating costs
– Compare to the competitors, firm in the HBR case study Fitpass: Toward Democratizing Fitness has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fitpass Fitness 's lucrative customers.
Opportunities Fitpass: Toward Democratizing Fitness | 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 Fitpass: Toward Democratizing Fitness are -
Manufacturing automation
– Fitpass Fitness can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Better consumer reach
– The expansion of the 5G network will help Fitpass Fitness to increase its market reach. Fitpass Fitness will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fitpass Fitness in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fitpass Fitness can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Fitpass Fitness can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fitpass Fitness can use these opportunities to build new business models that can help the communities that Fitpass Fitness operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fitpass Fitness is facing challenges because of the dominance of functional experts in the organization. Fitpass: Toward Democratizing Fitness case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Fitpass Fitness 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.
Buying journey improvements
– Fitpass Fitness can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fitpass: Toward Democratizing Fitness 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Fitpass Fitness can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Fitpass Fitness can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fitpass Fitness 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.
Leveraging digital technologies
– Fitpass Fitness 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 Fitpass Fitness 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 Technology & Operations segment.
Threats Fitpass: Toward Democratizing Fitness External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fitpass: Toward Democratizing Fitness are -
Technology acceleration in Forth Industrial Revolution
– Fitpass Fitness has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Fitpass Fitness needs to keep up with the evolution of technology in the Technology & Operations 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.
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 Fitpass Fitness in the Technology & Operations sector and impact the bottomline of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fitpass Fitness 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 Fitpass: Toward Democratizing Fitness .
Shortening product life cycle
– it is one of the major threat that Fitpass Fitness is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Fitpass Fitness 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 Technology & Operations industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Fitpass Fitness business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Fitpass Fitness 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. Fitpass Fitness can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Fitpass: Toward Democratizing Fitness, Fitpass Fitness may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fitpass Fitness in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Fitpass Fitness
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Fitpass Fitness.
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 Fitpass Fitness.
Consumer confidence and its impact on Fitpass Fitness 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.
Weighted SWOT Analysis of Fitpass: Toward Democratizing Fitness 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 Fitpass: Toward Democratizing Fitness 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 Fitpass: Toward Democratizing Fitness 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 Fitpass: Toward Democratizing Fitness 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 Fitpass: Toward Democratizing Fitness 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 Fitpass Fitness needs to make to build a sustainable competitive advantage.
