What is the competition like in the activity tracking industry? How strong is the competitive strength of
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Question:
What is the competition like in the activity tracking industry?
How strong is the competitive strength of buyers and suppliers?
New entrants and substitute products? Rivalry among competing sellers?
Prepare a Five Forces Model of Competition to support your conclusions.
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Fitbit, Inc.: Has the Company Outgrown Its Strategy? Rochelle R. Brunson Marlene M. Reed Baylor University Baylor University itbit revolutionized the personal fitness activ- TechCrunch50 Conference drumming up preorders ity in 2009 with the introduction of its Tracker for their product. Neither man had any manufactur- wearable activity monitor. By 2016 the com- ing experience, so they traveled to Asia and sought pany was a hit in the marketplace with Fitbit devices becoming nearly ubiquitous with fitness enthusi- asts and health-conscious individuals wearing the devices and checking them throughout the day. The market at the end of 2009, and the company shipped company's sales of activity monitors had increased approximately 5,000 units at that time. They had from 5,000 units that year to 21.4 million connected additional orders for 2,000 units on the books. health and fitness devices by year-end 2015. The company executed a successful IPO (initial public called an "activity monitor" which was a wireless- offering) in 2015 that boosted liquidity by $4.1 billion enabled wearable technology device (see Exhibit I). and recorded revenues of $1.86 billion by the con- The purpose of the Fitbit was to measure personal clusion of its first year as a public company. Fitbit's chief managers expected 2016 revenues in the range EXHIBIT1 Fitbit Ultra of $2.4 to $2.5 billion. However, on the last day of February 2016 the price of Fitbit stock plunged nearly 20 percent afler the company announced that the sales and earnings in the first quarter would fall short of analysts' forecasts. The missed forecasted milestone created a dilemma for founders James out suppliers and a company to produce the device for them. Fitbit put its product named "Tracker" on the The product Park and Friedman developed was Park and Eric Friedman, who were now faced with finding a strategy to turn things around at the now publicly traded company. BACKGROUND ON FITBIT Fitbit was founded in October 2007 by James Park (CEO) and Eric Friedman (CTO). The two men started the company after noticing the potential for using sensors in small wearable devices to track individuals' physical activities. Before they had a prototype, Park and Friedman took a circuit board in a wooden box around to venture capitalists to raise money. In 2008, Park and Friedman addressed the O Donis Korunov Source: Fitbit, Inc. website. OCopyright Rochelle R. Brunson and Marlene M. Reed. All rights eserved Fitbit, Inc.: Has the Company Outgrown Its Strategy? Rochelle R. Brunson Marlene M. Reed Baylor University Baylor University itbit revolutionized the personal fitness activ- TechCrunch50 Conference drumming up preorders ity in 2009 with the introduction of its Tracker for their product. Neither man had any manufactur- wearable activity monitor. By 2016 the com- ing experience, so they traveled to Asia and sought pany was a hit in the marketplace with Fitbit devices becoming nearly ubiquitous with fitness enthusi- asts and health-conscious individuals wearing the devices and checking them throughout the day. The market at the end of 2009, and the company shipped company's sales of activity monitors had increased approximately 5,000 units at that time. They had from 5,000 units that year to 21.4 million connected additional orders for 2,000 units on the books. health and fitness devices by year-end 2015. The company executed a successful IPO (initial public called an "activity monitor" which was a wireless- offering) in 2015 that boosted liquidity by $4.1 billion enabled wearable technology device (see Exhibit I). and recorded revenues of $1.86 billion by the con- The purpose of the Fitbit was to measure personal clusion of its first year as a public company. Fitbit's chief managers expected 2016 revenues in the range EXHIBIT1 Fitbit Ultra of $2.4 to $2.5 billion. However, on the last day of February 2016 the price of Fitbit stock plunged nearly 20 percent afler the company announced that the sales and earnings in the first quarter would fall short of analysts' forecasts. The missed forecasted milestone created a dilemma for founders James out suppliers and a company to produce the device for them. Fitbit put its product named "Tracker" on the The product Park and Friedman developed was Park and Eric Friedman, who were now faced with finding a strategy to turn things around at the now publicly traded company. BACKGROUND ON FITBIT Fitbit was founded in October 2007 by James Park (CEO) and Eric Friedman (CTO). The two men started the company after noticing the potential for using sensors in small wearable devices to track individuals' physical activities. Before they had a prototype, Park and Friedman took a circuit board in a wooden box around to venture capitalists to raise money. In 2008, Park and Friedman addressed the O Donis Korunov Source: Fitbit, Inc. website. OCopyright Rochelle R. Brunson and Marlene M. Reed. All rights eserved
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What is the competition like in the activity tracking industry Fitbit Inc is one of the worlds top manufacturers of scientific and technological equipment and its wearable activity trackers sparked a ... View the full answer
Related Book For
Economics of Strategy
ISBN: 978-1118319185
6th edition
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer
Posted Date:
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