Threat of New Entry: 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 International had experienced it biggest threat mostly because of new competition and changes in technology. When the over the counter weightless drug launched it had a drastic effect on their market. 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. Threat of Substitutes: 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. 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. 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. 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.
1. Threat of new entrance3. Bargaining Power of Suppliers
5. Rivalry among Existing Competitors
2. Threat of Substitutes4. Bargaining Power of Customers
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 themselves in the position to create a profitable company without totally relying on consumers.
The strongest part about the weight watchers program is the community and employee morale that comes along with the product. The program consist of two elements that really make the culture thrive. First off is the programs that it offers such as plans and dietary supplements. Second is the community and group support that really makes it hard to contest with. With all the human planning and preparation this is the key to internal success in the business market.
Strategy Development. (n.d.). Retrieved September 30, 2014, from http://strategyatheinz.blogspot.com/2013/05/shaping-weight-loss-with-five-forces-of_30.html