Blog 3: The Innovator's Dilemma: Application to the Fitness Industry

When companies are successful, we often look to the leadership and management to learn from their strategies. At the same time, when a company fails, we look at management in order to learn what not to do. Rarely do we consider how the same successful strategy can lead to failure. Good business practices such as “—planning better, working harder, becoming more customer-driven, and taking a longer-term perspective—all exacerbate the problem” when applied at the wrong time or in the wrong situation (Christensen, 10). A business or industry must constantly analyze disruptive threats, even if they are successful, so that they respond to the industry as it will be in the future. That means, changing strategy even if experiencing current success.

An example of an industry that I see currently experiencing a disruptive threat is the fitness industry. Classpass has created a new model where customers can use their service to purchase credits which they can use various participating fitness studios. This can affect customer loyalty to specific studios, disrupting their revenue model as studios only receive about 50% the usual rate (Izquierdo). Another technological disruption to the industry is the availability of online workout classes. Classpass has also entered this realm, launching in-home, on-demand classes in 2018. Other businesses, such as Yoga Journal, offer online classes. These new technological trends impact both small fitness studios and large gyms as customers can now create their own, unique fitness experience by attending various classes rather than only offerings at one business.

An example of a business who has responded to this change is Orange Theory. They have created a unique business model where they integrate new technology to give biorhythm tracking, differentiating themselves from other fitness offerings. They also ensure customer loyalty by creating their own heart monitoring product that must be purchased to use their services. As the fitness industry continues to change, however, they must not rely too heavily on their current success and need to look ahead and plan for future changes.

I will use the concepts introduced in “The Innovator’s Dilemma” article in the future as I hope to own my own music school business. Disruptive technologies are directly related to this field as more remote educational services are being offered online. Furthermore, I think disruptive technologies are very relevant to any industry using a subscription model. The arts could very well use a similar model to the fitness industries’ Classpass, which could allow customers to frequent multiple institutions events rather than subscribing to just one. Industries should look to what is happening in other sectors as they anticipate and plan for their future.