Running Head: COMPETITIVE STRATEGY

FITBIT

COMPETITIVE STRATEGY
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Executive summary
This report will evaluate briefly competitive analysis of Fitbit Company that is working as an
American consumer electronics and fitness company. The company has applied the many
strategies to gain easily competitive advantage within the competitive environment. One of the
most effective and influential is their business strategy. Business strategy in relation to Fitbit will
be identified that are supporting to expand operations through gaining competitive advantage
within the competitive fitness industry.
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Table of Contents
Executive summary.........................................................................................................................1

Introduction......................................................................................................................................3

Business strategy.............................................................................................................................4

Create a competitive advantage...................................................................................................4

Theoretical concept to resolve the challenge of lost interest....................................................4

Strategy formulation....................................................................................................................7

Strategic implementation.............................................................................................................8

Conclusion.....................................................................................................................................10
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Introduction
Fitbit is recognized as the US organization which work in the fitness wearable industry, offering
health as well as activity trackers which are utilized in conjunction with smartphones. First
mover benefit into the industry of wearable attracted the $84 million venture capital that
organization utilized eventually to become the public organization within 2015. The company
intended initially for middle aged females that were enough familiar with technology by 2018. It
has expanded target customers to men and women aged 18 to 45 by partnership with
organizations like NBA, Adidas, and Red Bull. Fitbit has applied the competitive strategy that
relies on the best cost provider strategy. Present strategy is focused to pursue the premium,
differentiating, posting within the market of USA through providing the quality level products
which improves the willingness of customers to pay. Competitors of Fitbit are working to gain
the market share. Fitness tracker industry at regular level is becoming saturated through new
entrants because of the low barriers in relation to entry, non-proprietary technology, and
attractive market1.

Fitbit is required to apply the many progressive level of measures to improve the level of
competitive position within the market. This has been founded that future of wearable technique
is bright and organization is needed to provide the good quality products with services to
customers with expansion in new markets. The company has added the diverse functionality
within the products to maintain the competitive position within the market. It is engaged within
the technical invention to raise level of brand image and reputation 2. Following report will
explain the importance of business strategy which should be followed through Fitbit to achieve
the new heights within the competitive environment and resolve the challenge of lost interest
particularly in a market in which technical giants such as Samsung and Apple is competing.
1
Bea.gov. Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA). Bea.gov. (2021).
Retrieved from: https://www.bea.gov/data/gdp/gross-domestic-product

2
ClubIndustry. U.S.-China Trade War Could Affect Fitness Equipment Prices. ClubIndustry.
(2020). Retrieved from: https://www.clubindustry.com/news/u-s-china-trade-war-could-affect-
fitness-equipment-prices.
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Business strategy
Business strategy is important for any organization looking to grow the operations of business
within the strategic manner3. Business strategy in relation to Fitbit is fully focused to stay
different from competitors like Apple. The company like Fitbit encourages the users to become
more healthy and active whether it is devices, software, and services of Fitbit. Social element of
the organization is important drive in relation to regular level of growth despite high level of
competition. Following discussion will cover the practices and analysis which should be applied
through Fitbit within their business strategy to resolve the challenge of lost interest.

Create a competitive advantage

Organization like Fitbit can easily accomplish the competitive advantage by focusing as well as
recognition of differential products approaches, reshaping superior competences, using unique
techniques and collecting the intellectual property rights. All these will enable the organization to
become effective within the minds of customers. With the present globalization and
environmental information which can be harnessed within the many ways to accomplish the
competitive benefit against the competitors like Apple and Samsung within the market. Business
strategy of Fitbit is typical to accomplish with the present strong competitive level pressure
within the economy as resources, techniques, and information are equivalent and can be easily
replicated through the competitors within the market. This is critical for the organizational
management to take the considerable time on regularly identifying the necessary sourced through
studying the many frameworks4.

Theoretical concept to resolve the challenge of lost interest

Fitbit is recognized for fitness trackers which supported to explode the trend of wearable. Interest
within the products of the organization is declining. The company has been on research for new

3
Crunchbase. Fitbit - Crunchbase Company Profile & Funding. Crunchbase. (2021). Retrieved
from: https://www.crunchbase.com/organization/fitbit

4
Tung, M. How it Works- Fitbit. Jameco.com. (2021). Retrieved from:
https://www.jameco.com/Jameco/workshop/Howitworks/how-it-works-fitbit.html
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growth areas5. The company has announced to redirect the business strategy to good practices,
smart watches, and collaborate with health sector to easily move beyond the level of device sales
to customers. Wearable business of Fitbit has declined however level of integration into the
system of health care can easily revive the organization. To analyze the business strategy of
Fitbit it is effective to utilize the many theoretical concepts. Following discussion will include
the important theoretical concept in relation to Fitbit for achieve the competitive advantage
through effective business strategy.

 Porter theoretical concept

Fitbit can easily apply the differentiation practices in relation to business strategy and resolve the
challenge of lost interest. The company should focus to differential the product in compare to
competitors like Apple and Samsung. The company has products within the market which
mainly designed to serve the many users with different demand levels. Products of the company
include Fitbit Flex that was mainly designed to serve the simple requirements while high end
type model served the critical functions that can be easily found within the smart watches.
Business strategy of Fitbit should focus to differential products and become enough capable to
serve the huge range of customers that required particular functions hence providing the
customers what other rivals were not capable to provide within the market.

Suppliers of Fitbit are within the dominant position which can minimize the organizational
earning margin within the market. Fitbit is maintaining it by introducing the many wearable
products. There is smaller and powerful base of customers which presents the higher customers
bargaining power. Fitbit is managing it by multi-level structure within the market in which it can
target the many customers with different buying requirements and power. Substitute threats are
high in case of Fitbit. Fitbit focuses on differentiation to serve the different demands within the
market and minimize the requirement of substitution. New entrant threat is low in case of Fitbit.
Fitbit is regularly managing the challenges by creating the economies of scale as well as

5
Ebling, R. ‘Economics, Capitalism Magazine, Capitalism and Free-Market Competition.
(2017). Retrieved from: www.CapitalismMagazine.com
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enlarging the capability to it can easily lower the level of fixed cost. Competition is high for
Fitbit. Fitbit is regularly collaborating to improve the market size and compete more effectively.

 SWOT analysis

In relation to apply the business strategy organization like Fitbit should complete the SWOT
analysis which will enable to identify the opportunity and use to keep every user active and
interested. Fitbit should focus to make the different proposition or unique scheme from what is
mainly provided through the high technical manufacturers of device as the core strength.
Organization used technique to make individuals healthier and active through providing the data
as well as inspirational guidance within the wearable form that had not been applied through
competitors which will remain important opportunity for the organization 6. It has enabled the
company to provide the services to customers effectively and uniquely and make criticality for
competitors to easily tap into and minimize the weaknesses. The company is facing the challenge
of lost interest which should be resolved through focus on right strategic action application
which will eliminate the threat.

Use of focused differentiation as well as recognizing the unique opportunity organization like
Fitbit will become enough capable to target individual customers and initiate the proactive
measure for involve the organization easily within the corporate wellness market a market in
which competitors ignored and underrated before. The company should see the opportunity to
revolutionize the fitness tracking industry through making the products which is social, stylish,
and interactive. Organization should subsidized devices as well as business of software that will
facilitate it to manage easily projects 7. It will lead to bring the opportunity for more recurring
revenue stream. Moving from fitness to additional new business practices does not refer Fitbit is

6
Ilin, I., Levina, A., Lepekhin, A. and Kalyazina, S. December. Business requirements to the IT
architecture: a case of a healthcare organization. In Energy Management of Municipal
Transportation Facilities and Transport. (Springer, Cham 2018).

7
Kranz, M. Building the internet of things: Implement new business models, disrupt competitors,
transform your industry. (John Wiley & Sons, 2016).
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leaving the customers’ business. To negotiate the way into the health ecosystem, Fitbit mainly
needs to regularly maintain the consumer brand.

Strategy formulation
Fitbit marketing practices mainly targeted the females between the age of 35 to 45, technical
savvy, individuals with the above average income, inactive individuals that required motivation
to get a good body shape and inclined people athletically that preferred to track easily data of
activity. The company to remain the leader within the market should improve the level of sales in
relation to men and women with age of 18 to 45. To improve the efforts of marketing and create
the visibility, awareness, and accessibility, organization already pursued the partnership.
Regularly growing corporate partnerships has demonstrated the willingness to move beyond the
retail practice and wide appeal of integrate system to new customers segment. Strategic
acquisition has promoted the effective level of integration into the industry of healthcare8.

The company in relation to business strategy for resolves the challenge of lost interest should
conduct the market research as well as apply the new techniques within the all products and
services to easily maintain the strong image in market. Technical advancement will support the
organization to compete effectively with many other organizations within the era of rapid
globalization. The company should focus to launch and market the highly advanced and effective
health products like innovative pancreas to meet the mission of improving individual’s health
outcomes and support the users to deal the challenge of health. The company should apply and
utilize the energy harvesting system for raise the level of environmental sustainability through
minimizing the level of energy consumption and improving the devices life9.

8
Quelch, J. A. Consumers, Corporations, and Public Health: A Case-Based Approach to
Sustainable Business, (Oxford University Press, 2016).

9
Soltani, Z., Zareie, B., Milani, F.S. and Navimipour, N.J. The impact of the customer
relationship management on the organization performance. (2018)The Journal of High
Technology Management Research, (2018), 29(2), pp.237-246.
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The company has already entered in effective level of partnership with many healthcare
providers to easily remain engage with the market research as well as identify the information
which requires health tracking. Marketing practices of Fitbit should focus to diversify the line of
product through adding the wireless earphones, laptops, smartphones, and many more to target
broader target market as well as improve the level of market share. Ultimately launch of effective
and new products like Fitbit earphones will support the company to target huge number of music
lovers as well as spotify users that will help to expand level of brand image of organization. The
company should take the necessary measures to differentiate the products from rivals to
minimize the experience of customer’s services10.

Strategic implementation
Closer look at the shopping practices of audience as well as buying the products of Fitbit will
provide the more insight about the marketing practice of company. Key resources in relation to
Fitbit are valuable and rare presenting that it has the competitive advantage at the particular
moment. This kind of advantage is not sustainable due to minimize interest of customers within
the organization. Key resources of the organization are imitable and substitutable referring that
their position as the leader within market is at high level of risk 11. In present company should
focus and pursue the differentiation strategy with focus on broader market and rely on the
premium design as well as features to improve the willingness level of customers to pay and use
the product of Fitbit on a regular level. For maintain the effective level of customers interest
organization should hone the resources to ensure that it is regularly creating the value for
customers and provide the new and differentiating features.

Organization like Fitbit saw the promising results with expansion to overseas with doubling level
of sales within the many nations. Business strategy of Fitbit should involve the improving
10
Srivastava, M., Franklin, A. and Martinette, L. Building a Sustainable Competitive Advantage.
Journal of Technology Management and Innovation, (2013), 8(2), pp. 7-8.

11
Tirabeni, L. Technology, Power, and the Organization: Wearable Technologies and Their
Implications for the Performance Appraisal. In Performance Appraisal in Modern Employment
Relations. (Palgrave Macmillan, Cham 2020).
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organizational marketing push outside the USA in which there growth of market is potential.
One of the effective benefits to the option is that it would lead to improve the level of total
potential market share in relation to industry that minimize the competition level and make the
industry more attractive. Business strategy of Fitbit should involve the more integration into the
digital platform to support the patients with particularly medical situations to manage the daily
actions and level of overall care. Data tracking could be expanded through the practices of
business with involvement of glucose monitoring, blood sugar, medical alerts, and supporting the
meaningful information which is particularly linked to healthcare providers of users. This kind of
practices within the business strategy will work as the differentiation through providing the
something new completely to fitness tracking space.

Best chance in relation to Fitbit for long time differentiation as well as growth is regularly
focusing their practices on health and wellness by tracking of data. Business strategy of Fitbit
should refer to focus to build a trusted platform of brand that relied on the easy fitness tracking
that provides the natural segue into delivering the deeper and meaningful health insights. At
effective level Open API will enable to company to expand level of partnership with software
providers and health providers. Fashionable and discreet look of the organization will support to
convert those that presently utilized the devices of monitoring which are bulky and not pleasing
aesthetically. The company should complete the market research to easily determine the
requirements of people and what data kind of should be tracked12.

Fitbit should focus and invest more within the research and development to easily learn and
improve the present products and expand the lines of product to meet the all requirements and
resolve the challenge of lost interest. Ultimate objectives should be focused to become the one
stop shop in relation to customers that need to track the range of health data. Practices of
research and development on the basis of business strategy will enable to monitor the way which
is enough simply for the users to provide the important feedback. The company should focus to
improve the level of improve the data quality. For example, in place of simply providing the
statistics about the heart rate, at effective level Fitbit can easily provide the appropriate alerts to
12
Yablonsky, S. Smart wearable multi-sided fashion product platforms. In Workshop on Business
Models and ICT Technologies for the Fashion Supply Chain. (Springer, Cham 2016).
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the users if data mainly falls outside the acceptable range. Business strategy of Fitbit should
focus to ensure that practices provide the personalized recommendations which user can easily
apply to improve the level of health.

Fitbit should look to develop the more partnership with insurance organizations, offices of
doctors, as well as medical device organizations. It would enable to engrain fitbit into the
lifestyle of customers and would support the doctors to gather and monitor the data of patient.
Insurance organization can provide the discounts to customers that own particularly Fitbit and
medical devices such as glucose monitor can be easily synced by application of Fitbit. Through
improving the features and level of products utilize organization like Fitbit can differentiate
future itself from competition level and sustain the competitive advantage within the fitness
industry as the effective business strategy.

Conclusion
In the renown of the conversation it can be determined that Fitbit has already developed the
strong brand name. This has easily positioned it as the frontrunner within fitness tracking
industry. Simple pedometer has been around for the many years. Organization saw the many
opportunities to revolutionize the idea through making the product which is social, cooperative,
and stylish. The company capitalized on the trends of customer’s health and wellness to attract
the huge range of customers from level of fitness enthusiastic to workout novices. The company
faces the many challenges which threaten the strategic level practices. One of them is loss of
customers’ interest after particular time period.

Organization should adopt the business strategy to resolve the challenge easily within the
competitive business environment. This will enable the company to pursue the premium and
differentiating posting within the many markets through offering the quality level products which
lead to improve the willingness level of customers to regularly pay. Competitors of the
organization like Apple and Samsung are creating the challenge for the company on a regular
level. These have made the fitness tracker industry saturated with effective market practice and
non-proprietary technique. This discussion has covered the many points to complete the analysis
about the organization.
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Analysis has presented that organization is working with strong market position but level of
competitive advantage are not enough sustainable. It will need to leverage the resources as well
as strengths to regularly appeal to the new practices and further differentiate the many products
and services easily despite high level of competition within the competitive market. Strategic
options will remain effective for the company to expand the practices more effectively. It will
enable to company to improve the potential size of the market and improve the interest of
customers within its products and services despite availability of many alternative and
competitive market.