I’m really into this health kick right now. So, I’m constantly thinking how I can burn fat faster, what workouts will show me quick results, or how do those celebrities stay so skinny? Although, the weight loss industry is a billion dollar industry in here in America, it still is one of the most obese countries in the world. In fact, according to USA Today, 20% of preschoolers in America are obese.
Which, made me began to think more about the strategy of the weight loss industry; how can they make so much money and the American public still be so obese? I could talk about all the factors of why America is an obese nation…but, I’m not.
Instead I’m going to focus on Michael E. Porter’s article, The Five Competitive Forces That Shape Strategy in the weight loss industry. It’s clear that the weight loss industry is not shaping our bodies.
The weight loss industry has a gazillion diet products on the market today which, are looking to make a profit from their consumers and stay competitive in this ever evolving market.
Throughout the years, we have seen a whole lot of trends in the weight loss industry. Many diets and workout plans/routines are promoted to consumers through various mediums as methods of loosing weight. Rather, it be Jazzercise, Tae Bo, or P90X Insanity, Weight Watchers, The Dick Gregory Diet, or the South Beach diet, all of these products are trying to make a profit and stay current in this rapid industry of dropping pounds fast. With that being said, one of the diet plans that have a strong and effective strategy is Weight Watchers.
Now let’s take a quick look at some of the ways that Weight Watchers uses the Five Forces of Competitive Strategy in their company:
Weight Watchers was founded in 1963 helping people lose weight and count points. Fun Fact: In 1978 until 1999 Weight Watchers was owned by H.J. Heinz Company.
Five Forces of Competitive Strategy for Weight Watchers
1 1.) Threat of New Entry: Government Policy - Obesity is a big problem in the United States which is becoming a government and healthcare issue. Weight Watchers has played a role in the development of a new national awareness of healthful eating, lifestyles changes, and weight control. Weight Watchers was asked to testified at the hearings and conference that led to the formulation of Dietary Guidelines for the country.
Switching Cost - Weight Watchers dropped their prices not because they focused on consumers, but because they are more focus on the health insurance business. Employers are giving incentives to employees to use weight watchers for health insurance purposes.
2.) Threat of Substitutes Switching Cost - In the weight loss industry there are lots of substitutes but Weight Watcher appears to be in the business of helping people make lifestyle changes. However, of course they want to make a profit. Weight Watchers is innovative and this is the reason they have been around for 50 years. Weight Watchers realizes the growth in health insurance and realizes their strength is their brand and reputation.
3.) Bargaining Power of Suppliers Presence of Substitute Inputs - Weight Watchers has the upper hand in regards to suppliers. They can turn to any alternative especially being an industry leader.
4.) Bargaining Power of Customers Brand Identify-Weight Watchers has a great brand identity being one of the leading diet plans and having 1.4 active members. Weight Watcher uses many celebrities to market their brand to consumers. Spoiler Alert: Don’t be surprised if you see Kim Kardashian on a commercial for Weight Watchers.
5.) Rivalry Among Existing Competitors- This force could be a big problem since new workout plans and diet products are always popping up on the market. Some diet plans are even using Weight Watchers’ formula for counting points and creating calculators. However, the PointPlus has been patented by Weight Watchers and they have tried to control this by sending cease and desist letters to websites and third party companies that are using Weight Watchers PointPlus formulas’.
Closing, I believe that Weight Watchers has a great thing going and will be around for years to come unless someone makes that magic pill to have the fat shed off you overnight. It seems as if the 5 Forces of Competitive Strategy is really working for them. It also seems as if Weight Watchers understands its industry and where the industry is heading. They found a niche and themselves in the position to create a profitable company without totally relying on consumers. Instead it relies on where the health care industry is headed to make them less vulnerable for attack. Will you allow the health care industry, The 5 Forces of Competitive Strategy, and companies like Weight Watchers determine if you loose weight? Me neither; I’m going to be Wise and Exercise!
"Why Is Weight Loss A Billion Dollar Industry?" Nutrition Research Center. N.p., n.d. Web. 30 May 2013.
"Weight Watchers." Wikipedia. Wikimedia Foundation, 05 Apr. 2013. Web. 30 May 2013.
"PRESS RELEASE." WeightWatchers.com: About Us. N.p., n.d. Web. 30 May 2013.