Market-Oriented Mission Statement
Fitbit’s current mission statement is customer-oriented, which is a good thing. A company based around catering to the wants and needs of the customer is more likely to find success when compared to a product-based company suffering from market myopia. Market myopia is what brought down giants like Nokia and Kodak, and almost did the same with Fitbit, who missed the emergence of smartwatch products.
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However, this mission statement does not directly address the market, nor does it present how Fitbit’s products are preferable to those of their direct competitors. Xiaomi’s wristbands and Apple’s smartwatches are also capable of being seamlessly integrated into a person’s life and helping them achieve their fitness goals. Fitbit’s key advantage over Apple and Xiaomi is that both of its primary competitors are primarily smartphone companies that lack in-depth expertise in fitness and medicine. Fitbit’s mission statement should emphasize the quality of medical data as well as customer privacy. The existing mission statement should be updated to address these points:
“To empower and inspire you to live a healthier, more active life. We design products and experiences that provide you with unmatched quality of health information and personal data protection so you can achieve your health and fitness goals, whatever they may be.” It is an alteration of the initial statement they had, with an emphasis on the quality of health information that no other fitness band or smartwatch can currently provide.
Fitbit’s Business Portfolio
Before Fitbit’s yearly revenues fell more than 50% in 2016, the company’s product range included a rather narrow line of fitness bands to cater to different price ranges and provide a varied range of capabilities. For example, the Flex and Charge wristbands provided information on steps, calories, sleep tracking, and minutes the user was active, whereas professional wristband models such as the Charge HR and Surge offered a much wider range of information for a steeper price (Xu & Wang, 2016).
Fitbit could get away with such a narrow line of products due to its dominant position in the market. However, after 2016, the company sought to diversify its product range. Fitbit featured not only fitness wristbands but also its models of smartwatches, as according to Gartner analysis, wristband sales were expected to drop by 15%, while smartwatch sales – to rise by 17% (Xu & Wang, 2016). To aid in these efforts, Fitbit made several acquisitions, such as Pebble and Vector Watch SRL.
Fitbit’s Macroenvironment Analysis
- Political: Fitbit is affected by high tax rates in the USA as well as Chinese laws governing industry and production for foreign businesses. Social and political events in China have the potential to affect the company’s businesses (Xu & Wang, 2016).
- Economic: Fitbit moved its production facilities to China to save costs. However, due to the Chinese government’s adoption of floating currency policy, the costs of production in China are likely to rise, affecting Fitbit’s pricing strategy (Xu & Wang, 2016).
- Social: The company suffered a backlash in 2015 when it was forced to recall a major portion of its products due to a technological error. This enabled other companies, such as Apple and Xiaomi, to claim large portions of the wristband market. Fitbit’s net incomes have been negative ever since (Xu & Wang, 2016).
- Technological: Fitbit is faced with increasing competition from other technology companies that have the capabilities of matching Fitbit’s technological prowess and providing products with similar qualities (Xu & Wang, 2016).
- Environmental: Fitbit’s products are non-recyclable, which raises concerns among the environmental community.
- Legal: Fitbit is engaged in a class-action lawsuit in the aftermath of the product recall of 2015. Depending on how the lawsuit is resolved, Fitbit might suffer adverse consequences, including a loss of reputation.
Several of these macroenvironmental factors affected Fitbit’s microenvironmental situation as well as the future strategy for the company for the next several years. Namely, social, technological, and legal events that led to the crisis of 2015-2016 forced the company to transform itself from a consumer electronics company into a digital health company.
Fitbit’s Microenvironment Analysis
Three major micro environment factors that forced Fitbit’s to change its approach to its product line and the company’s future strategy are as follows:
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- Customers. According to Xu and Wang (2016), smartwatches with functions of fitness wristbands offered more functionality for the customer when compared to typical wristbands. The majority of the customers did not care about advanced medical data as much as basic functions to go along with the average smartwatch. This factor forced Fitbit to expand its product line to cater to a larger customer base.
- Competitors. Fitbit could not compete with the likes of Apple and Xiaomi in terms of technological prowess and with European watchmakers in terms of quality. To overcome this, the company has transformed from a consumer electronics company to a digital healthcare company, with an emphasis on the quality of medical data while at the same time maintaining a modicum of versatility. (Xu & Wang, 2016).
- Media and the general public. As Fitbit suffered a legal scandal as a consequence of poor testing and quality control, the company was forced to publically announce gradual improvements in both testing and research to re-establish credibility. Also, Fitbit engaged in various charity and humanitarian campaigns to better its image (Xu & Wang, 2016).
Xu, X., & Wang, X. S. (2016). Fitbit: The business about wrist. Web.