Introduction
WW ( weight watchers) is experiencing a significant development on rebranding and moving towards wellness. Although it had an impact on market share value and WW place in the market. It is a competitive environment recently due to old and new competitors entering the market. This report will first address the vision, mission and purpose of the ww, as well as using strategy tools to identify the ww place in the market at the moment. Then distinguish ww main competitors. Consequently, fundamental strategies need to be used in terms of company growth.
strategy, vision, mission and purpose ,Macro-environmental analysis
Porter, M. (2004) defines strategy as: “Deliberately choosing a unique set of activities to deliver a unique mix of value”. The WW unique strategy and focus lies in communities. Admittedly after rebranding company, they aim to be in differentiation, and they have mentioned it by setting up vision based on; “To be the global leader in assisted wellness for all people.” WW has a combination of vision and mission, as there is “To create a world where wellness is accessible to all, not just the few.”. This strategy is right to cause action; however, rebranding positioned the WW stuck in the middle. Consequently, their methods need changing in order to realign with the strategy they have been chosen.
Tools
VRIN
Capabilities exist that are valued by customers and provide a potential competitive advantage. WW’s relationship with Katie Hudson, DJ Khaled and Oprah Winfrey, is unique within the market and valued by customers. Since Oprah being announced as a spokesperson and critical stakeholder, the number of users grew by c. 1 million. Oprah has a loyal mass following, and is seen as a trustworthy mouthpiece in a political climate where trust for public figures, particularly those associated with the media, is low (e.g. fake news phenomenon).This provides a potential competitive advantage, allowing WW to stand out against the saturated market, where barriers for new entrants are low.
Rarity Take capabilities that no (or few) competitors possess. WW’s track record of creating meaningful and tangible partnerships is something that few competitors have. This is where WW’s high brand awareness, large user base, and visible Chief Executive Officers, allows it to stand ahead of the crowd.
Inimitability is capabilities difficult for competitors to imitate. WW’s relationships with influencers have taken time to build, and its high brand value allows it to attract well-known senior management. This, in turn, enables WW to attract higher-value partnerships. These are difficult for competitors to imitate. WW’s technological capabilities are easy to imitate in a climate where there is willing investment around technology start-ups or technological businesses. WW is not leading to its technological capabilities.
Non-substitutability is the risk of capability substitution low. The risk of capability substitution for WW is high because the market is still discovering how consumers are responding to technological advancements (i.e. individual weight loss support mechanisms) and how consumers will use diet support systems in the future if they use them at all. The threat from competitors that have higher capabilities around technology is high, and the need for physical communities may cease to exist altogether. (Farrell, 2018)
5 forces
In Porter’s five forces, supplier power refers to the pressure suppliers can exert on businesses by raising prices, lowering quality, or reducing availability of their products. Furthermore, a strong supplier can make an industry more competitive and decrease profit potential for the buyer. (Porter M. E, 1980)
Substitute alternative product that a consumer can use as well as / instead of the product in question. This business would be classed as ‘competition’ and a threat to the business’ market share. As substitutes start to attract the same customer base, or capture customers targeted by the business being threatened, this might cause a business to re-think its strategic vision for the company, due to the threat of the company’s uniqueness.
As WW, through their CEO Mindy Grossman, has said that their biggest competition is the 95% of the US population who feel that they can lose weight on their own. Key sectors that can be considered competition in that context are: Like-for-like services who offer dieting communities for subscribers, where accountability is a key factor Digital weight management products that support individuals in their weight loss endeavours. Brands who stock weight loss products through existing retail channels, which consumers can independently access through their relationships with other brands.
Substitutes Key:
C = community substitutes
D = digital substitutes
R = retail substitutes
Also, thinking about ‘threat of substitutes’ it’s important to consider ease of entry to the market. With a saturation of fitness applications in the market, this does two things: 1) highlights the relative ease with which a company can enter the market digitally
2) supports and encourages a growing trend for buyers to consider digital applications over community-led models.(Simmons, 2018)
Bargaining Power of Buyers
The bargaining power of buyers considers that customers and consumers have to put pressure on a business to demand higher quality products, better customer service, and lower prices.
Things to consider when looking at the bargaining power of suppliers:
- Number of buyers relative to suppliers: If the number of buyers is small relative to that of suppliers, the buyer’s power will be stronger.
- Dependence of a buyer’s purchase on a particular supplier: If a buyer is able to get similar products/services from other suppliers, buyers depend less on a particular supplier. Therefore, the power of the buyer would be greater.
- Switching costs: If there are not many alternative suppliers available, the cost of switching is high. Therefore, buyer power would be low
- Backward Integration: If the buyer is able to integrate or merge suppliers, the buyer has greater bargaining power over the existing suppliers.
The bargaining power of buyers is high in the case of WW. Key reasons why:
- A buyer can get similar products/services from other suppliers, particularly suppliers whose models are more aligned with growing digitisation trends
- Emerging customer loyalty is relatively low to historic customer loyalty
- The buyer is able to integrate/merge suppliers and does not need to engage with every element of WW’s business model and available services
- There is a relatively low proportion of buyers – 95% of Americans that want to lose weight believe they can do it themselves. WW’s target market is individuals who want to lose weight, which is a high population proportion, but the proportion that engage with weight loss functions is a low proportion
Additional Information on WW
The Company operates globally through a network of Company-owned and franchise operations.The Company’s branded products and services include meetings conducted by its franchisees, digital weight management products provided through its Websites, mobile sites and applications, products sold at meetings, licensed products sold in retail channels and magazine subscriptions and other publications. The Company operates through four segments: North America, United Kingdom, Continental Europe (CE) and Other. It sells a range of products, including bars, snacks, cookbooks, food and restaurant guides with SmartPoints values, Weight Watchers magazines, SmartPoints calculators and fitness kits, and certain third-party products, such as activity-tracking monitors. The Company sells its products through its meetings business, online and to its franchisees. The non-members and non-subscribers can also purchase its products through its e-commerce platforms. It also issues other publications, such as cookbooks and food and restaurant guides with SmartPoints values. (Reuters: https://www.reuters.com/finance/stocks/companyProfile/WTW.O)
As we expand our mission from being the global leader in weight management to becoming the world’s partner in wellness, we marked a major milestone with our rebranding as WW. We are also enhancing our digital experience in ways that are meaningful to our members’ lives, including through the launch of WellnessWins, our first loyalty and rewards program. We have accomplished a great deal in 2018; however, I believe the true impact of our bold moves will be realized in 2019 and beyond. (Fool: https://www.fool.com/investing/2018/11/02/why-weight-watchers-international-inc-stock-sank-t.aspx)
Analysts slim down on Weight Watchers stock
Finally, shares of Weight Watchers International lost about 5%. Stock analysts at JPMorgan cut their rating on the stock from overweight to neutral, and reduced their price target nearly by half to $37 per share. Apparently, the key New Year’s season isn’t going as well for the company as many had hoped, and rising competition from other quarters has started to hinder Weight Watchers’ sales growth initiatives. In addition, the JPMorgan analyst pointed to the government shutdown as a possible drag on the company, suggesting that furloughed (and unpaid) federal workers were less likely to spend money to join its programs. All told, Weight Watchers will have to demonstrate greater resolve of its own if it’s going to make good on its long-term potential. (Fool: https://www.fool.com/investing/2019/01/11/why-vail-resorts-activision-blizzard-and-weight-wa.aspx )
WW’s stock slumped in January, with a decline taking place over the final quarter of 2018. Investor concern came after reports Oprah Winfrey had distanced herself from the company after a strong stock growth occurred after she was announced as a Board Member and key spokesperson for the organisation. WW had promised with their rebrand that they would engage further spokespersons, and, in January, announced Kate Hudson as a brand ambassador, but the announcement possibly came too late. (Concept Fool: https://www.fool.com/investing/2019/01/08/why-weight-watchers-stock-fell-23-in-december.aspx)
2019-3-24-1553455415