Business Strategy: Fitbit Case Study Discussion - Bow Valley College

This discussion post analyzes Fitbit's business strategy, focusing on its initial success through product differentiation and subsequent challenges due to increasing competition from brands like Xiaomi and Apple. The post highlights Fitbit's marketing mix, including its product, pricing, promotional strategies using social media, and single distribution channel. It notes the company's financial struggles, including a net loss in 2017 and a decline in device sales, suggesting that its differentiation strategy has become less effective over time. The analysis references the importance of competitive advantage and the need for strategic adjustments in a dynamic market environment. Desklib offers a platform for students to access similar solved assignments and study resources.

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The Fitbit is an accessory health device which is quite popular with respect to the fact
that, health and fitness has become a premium industry. The Fitbit business started back in 2009
and gained utmost popularity in those days. The business model of the firm aims to provide a
differentiated product to the different customers with various health data in return which can be
useful in measuring the overall health and fitness an individual is maintaining (Fitbit.com, 2019).
Although the model had been performing considerably well back in the year 2013-2014 but at
present the business model has not been functioning adequately with considerable improvements
in the product. In addition to this, the firm is faced by competition from the different brands like
Xiaomi, Apple and others.
The strategy used by the brand can be defined as the strategy of product differentiation
whereby even though the company had placed the pricing of the product at a considerably high
level, it could be understood that, the customers were ready to pay for the product as it was very
different and unique (Arthur, Strickland III & Gamble, 2008). However, as competition took
over, the strategy of the firm has not been doing well and this can be backed by the poor
performance of the firm whereby the firm faced a net loss of $60.1 million in the first quarter of
2017. Moreover, where in 2016, the firm had sold 4842 devices, the firm sold 2956 devices in
2017.
The marketing mix forms an essential part of the organization and with respect to this the
four important Ps are the Product which is the Fitbit watches. The pricing is around $20 which
can be stated to be on the higher side. The firm makes use of social media in its promotional
strategies and uses the medium of single distribution channel to sell the same.

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References
Arthur, A. T., Strickland III, A. J., & Gamble, J. E. (2008). Crafting and Executing Strategy: The
Quest for competitive advantage, concepts and cases.
Fitbit.com (2019). Fitbit Official Site for Activity Trackers & More [online]. Available at:
https://www.fitbit.com/ (Accessed on: 29 Jan. 2019).