Strategic Analysis Report: Fitbit

Paper Type:  Case study
Pages:  7
Wordcount:  1829 Words
Date:  2022-06-13


Organizations in the contemporary society strive to associate themselves with activities that allow them to achieve their organizational objectives in the business environment. It should be noted that companies identify strategies that they can use to overcome competition from other industry players. In so doing, an organization can maintain a consistent operational performance that guarantees results and meets the expectations of stakeholders within a given period. Fitbit is a technological company that takes pride in its success and significant milestones that it has managed to achieve within a short duration. Founded in 2007, the organization has introduced individuals to a wide range of products that include activity trackers and wearable technology devices that indicate the number of steps taken by an individual. While this is believed to be a revolutionary technology that enables the citizenry to monitor their health, its reception has been significant owing to the high number of health-conscious individuals in the contemporary society. From this observation, it is evident that Fitbit's business idea has encouraged other companies to venture into similar operations to target the high number of individuals who are interested in monitoring their health. Therefore, Fitbit's business strategy should be positioned in a way that identifies the organization as a fitness tracking company that allows people to manage their health.

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Strategy Formulation and Implementation

Even though pedometers have been around for a while now, the product failed to meet individual expectations. Also, though the modern world is inclined technology, the manufacturers of pedometers lacked the insights to align the product with the technological advancements that defined the contemporary society. It is with this business opportunity that encouraged Fitbit to introduce customized "pedometers" that are interactive, social, and stylish. By far, the technology company managed to achieve a record milestone that was yet to be completed by existing organizations in the business environment. Specifically, Fitbit focused on improving consumer health of individuals by highlighting the issues that caused obesity and offering solutions on the best techniques that can be used to overcome unfitness among the populace. From this, it is evident that Fitbit changed the fitness tracker industry by altering specific concepts in their products to meet the expectations of their global consumers. Although Fitbit is a successful fitness-tracking company based in the United States (U.S.), it is imperative to note that the organization is facing a variety of issues that are likely to affect its operations both locally and in the global business market. When it was starting, Fitbit sought to identify a target audience that consists of the high-income earners in the U.S. In fact, the middle-class consumers are a perfect market for many organizations because of their ability to spend on quality products (Diaz et al., 2015). In this regard, Fitbit premier target market was inclined towards the high-income earners whom they believed were even more conscious regarding their health than other individuals in the present-day world. However, it should be noted that the low-income earners form the majority of consumers around the globe, and as such, other industry players have identified them as their target market with the hope of meeting their expectations. For this reason, Fitbit should design a competitive business strategy that allows the company to achieve its objectives and meet the expectations of their consumers.

Fitbit's Generic Strategy

Fitbit's decision to focus on the high-end market has landed the company into problems that have seen it lose its dominance across the world. With the emergence of other companies that can provide cheap alternatives that meet the expectations of individuals, consumers are choosing to associate with other products as long as they reach their needs. Currently, Fitbit has lost its grip in the U.S. because of the availability of low-cost solutions that track the health activity of individuals. For instance, a close look at Fitbit Versa on the Fitbit online store will reveal that the product costs $225, making it a premium product for high-income earners. On the other hand, one can find a similar fitness watch on the Walmart store that costs $8.04. Looking at the two products, it is evident that many individuals will opt for the cheaper product that allows them to monitor their fitness.

Since 2015, Fitbit has recorded significant losses that amount from their inclined target market and entry of new competitors with a wide range of options for the consumers. For example, the company's stock market price has dropped drastically from an impressive record of $51.64 in 2015 to as low as $5.96 in 2017. Business and Stock analysts will confirm that Fitbit is on its death bed and unless it changes its strategy to diversify its interests, the organization may not recover from the competition from new entrants. Given Fitbit's misinterpretation of its target market and comprehension of the smartwatch industry, the organization appears to have reached a limit on its growth (Rote, 2017). It should be noted that Fitbit had the first-mover advantage that made it become comfortable and ignore relevant changes that should be implemented to maintain its market. Nevertheless, the smartwatch manufacturer has a role to play in the modern society given its understanding of the consumer market and expectations that it used to meet before the entry of new competitors.

Effective Strategies

To start with, Fitbit should reduce the price of its commodities and focus on both low and income earners. By embracing product diversification, the company can satisfy the needs of both the low-level consumers and those within the standard range. In the case of low-income earners, the organization can introduce new concepts that meet the requirements of this class of consumers. On the other side, Fitbit can introduce the high-end consumers to watches with enhanced features that complement their expensive gadgets and other electronic devices within their immediate environment. Looking at the number of suppliers across the world, Fitbit should associate with a company that has the lowest bid to allow it to meet the expectations of its varied consumers. Besides, there is a growing need for the watch manufacturer to align its designs with the emerging concepts from creative that will propel its products to the top in the business environment.

Resources that Fitbit should have to Change its Business Strategy

Fitbit should employ creative minds and qualified personnel into its employee base to influence the mindset of the consumer towards its products. By creating an enabling environment in the workplace, the company will encourage its workers to innovate and revolutionize the products to produce a unique outcome that addresses universal issues that affect the lifestyle of individuals. Looking at some of its competitors, Fitbit should invest heavily in research to win over established technology stables such as Apple Inc. and Jawbone. For instance, Apple Inc. dominates the mobile market and has successfully managed to obtain loyalty from high-end consumers around the world. By creating a culture of class and social status, individuals who switch from a low social level to middle class embrace Apple products to reflect their status. From this observation, it is imperative to state that its introduction of smartwatches in its recent release has captured the hearts of high-end consumers who value and select Apple products (Price et al., 2017). While these consumers embraced Fitbit's smartwatches before the introduction of Apple's fitness trackers, it is possible to state that individuals are likely to discard Fitbit's products for the customized Apple watches.

Fitbit's Growth Options

In 2017, Fitbit declared the year as a rebuilding period where the company would repossess its market share by introducing revolutionary products that would change the experience of individuals who wear smartwatches. It is during this period that the company ditched its massive production of fitness trackers and opted for the smartwatches that were the cause of its massive losses in business. When the company released its premier smartwatch, there would be a need to have an app store on the device that would enable users to perform different tasks apart from monitoring their health. In this regard, Fitbit introduced an app gallery that allowed individuals to interact with various applications that were customized to their interests and expectations. Besides, a significant reorganization of the company's structure would be essential as the organization would place a new set of employees with problems that affect their consumers and deny them the opportunity to meet their needs. From this, it is imperative to state that the company would benefit a lot by introducing a new department to tackle consumer health and fitness.

Interestingly, its decision to establish enterprise health that would act as an intermediary between companies, employees and insurance companies provided the much-needed breakthrough to the watch manufacturer that would see it gain its dominance in the business environment. For instance, Fitbit's partnership with United Health Care's Motion Program has opened doors for the technological company by rewarding employees who make healthy choices with up to $1500 that is deposited in their Health Savings Account (HSA). It should be noted that many of the U.S. consumers were motivated to purchase Fitbit's gadgets and monitor their health with the hope of receiving the reward by adhering to a strict nutritional program. However, there is a growing need for Fitbit to increase its subscription revenue by encouraging consumers to purchase their products. Given Fitbit's decision to increase their revenue stream by introducing a smartwatch to its competitors, it is imperative to note that the ability of the company to overcome competition is by embracing innovation.


Fitbit's open Applications Program Interface (API) allows different individuals to integrate their products and services with the Fitbit smartwatches. This realization presents Fitbit with a marketing edge over its competitors, a move that enables the organization to venture and cover a wide range of consumers in the business environment. Unlike Apple Inc.'s and Samsung's smartwatches that are specially made for their users, it is important to note that Fitbit's smartwatch allows innovators to introduce their services to new targets using the company's smartwatch because of its open API. Although open APIs are available can be found in other manufacturers products in the market, Fitbit has built its name to become a leading brand in the business environment. Therefore, Fitbit's leadership should focus on potential acquisitions with other companies and establish partnerships that allow the organization to expand its base and tap in revenue from new markets, hence sustaining its growth over the years.

On the other hand, Fitbit should focus on the health and wellness of consumers across the world. By investing heavily in market research, the company should be able to identify the needs of patients and the type of data that can be measured using their products. Looking at other smartwatches and fitness trackers, Fitbit's products stand out as the ideal electronic gadgets that can allow an individual to monitor his or health. Alternatively, the company's leadership should use its open API as a selling point to attract more investors on board and fund their activities, a move that will encourage innovation in the workplace and overcome yielding co...

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Strategic Analysis Report: Fitbit. (2022, Jun 13). Retrieved from

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