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Weight Watchers Case Study Essay

To be the leading weight loss service provider by assisting individuals to lose weight and sustain a healthy lifestyle. II.VISION STATEMENT

Weight Watchers International will be chosen by all individuals that have a goal of improving their life through healthy living. Weight Watchers will be easily accessible for all individuals desiring to improve their lifestyle and will receive exceptional service. Services will be recognized as a superior value. III.APPARENT PROBLEM

Weight Watchers is facing the issue of increased competition and cost concerns with a large majority of the population impacted in some fashion by the economic downturn. In addition they have to overcome the stigma of being viewed as the prior generation’s answer to weight loss. IV.STRATEGY

A.Corporate Strategy
The corporate strategy is reposition themselves and to develop a forward focused plan for the 21st century. B.Business Strategy
The business strategy is to introduce new programs like the Monthly Pass Payment Strategy and the new Turnaround program. C.Functional Strategies

1.Marketing
The Marketing Strategy is to reinvent Weight Watchers and product innovation for the US and abroad. 2.Finance

The Finance Strategy is to develop the new programing that will generate new revenue and to continue to be able to do that with a low capital and lean operating expense. 3.Operations

The Operations Strategy is to run a lean operation and achieve wide profit margins while expanding offerings. 4.Human Resources

The Human Resources Strategy is to use employees that were formally overweight and who have achieved weight loss success through the Weight
Watchers program. 5.Information

The Information Strategy is to evolve internet tools to assist the organization in bringing services to those who may not be able to or have interest in attending a meeting in person. 6.Research & Development

The Research and Development Strategy is to introduce new products and shift focus to broad based differentiation. V.STRENGTHS (Internal)

A.Marketing
1.Strong Brand – viewed as credible and effective
2.Consumer Reports – best staying power and proof of long-term success through clinical trials. B.Finance
1.Company’s low variable expenses
2.Low Capital expenditure requirements

C.Operations
1.Lean organizational structure
2.Flexible business model

D.Human Resources
1.Part-time staff paid on commission
2.Using staff that have lost weight through the WW program

E.Information
1.WeightWatchers.com – leading internet-based weight management program 2.Weight Watchers E-Tools – supported its mission to help support people to lose weight

F.Research & Development
1.Awareness of their rivals
2.Opportunities for new markets (ie men, new countries, etc.) VI.WEAKNESS (Internal)

A.Marketing
1.Misperceptions about what WW was
2.Differentiate themselves from fad diets
B.Finance
1.Economic downturn – less $ to be spent on non-essentials 2.Inflexibility in program

C.Operations
1.Being able to address members that did not speak English
2.Need to evolve operations to meet new and changing customer needs

D.Human Resources
1.Difficult to recruit instructors if the requirements to become instructors are so rigid 2.Leadership that could evolve with an ever-changing environment

E.Information
1.Lack of consumer knowledge about web-based services
2.Evolve online tools and resources to better serve consumers that are unable or uninterested in attending meetings

F.Research & Development
1.Need to better understand potential consumers – men, Spanish speaking consumers, young adults, etc. 2.Develop tools and programs to keep fresh programs that will attract a variety of consumers

VII.OPPORTUNITIES (External)
A.Men
B.Spanish-speaking Consumers
C.Young Adults
VIII.THREATS (External)
A.Competitors like Jenny Craig
B.Fad Diets
C.Pharmaceutical options like Alli
IX.PROBLEM

A.Stay true to core goals/mission while yet expanding to different target markets B.Can WW attract consumers without losing loyal members?
X.ALTERNATIVES

A.Partner with a competitor to identify how they can work together to increase revenues to further differentiate themselves as a weight loss solution. If Weight Watchers were to partner with a group like Jenny Craig, they could identify a meal replacement program that provided consumers with a mindless solution to accomplish their weight loss goals. B.Partner with a national fitness center chain like 24 Hour Fitness to show the importance in partnership between both fitness and eating habits to achieve weight loss.

Offer the opportunity for members to pay one fee that allows them the membership benefits of both WW and 24 Hour Fitness. C.Partner with some of the largest health insurance plans to develop a specific program through Weight Watchers to be offered to members. Weight Watchers has the opportunity to increase revenues that may be paid by the health insurance corporations in return the members weight loss should provide an ROI to the health insurance company through decreased health insurance expenses. XI.CRITERIA

A.Increase revenues by 25% within one year of partnership.
B.Weight Watchers is identified as the number one weight loss solution method by all consumers within one year of partnership. C.Achieve a retention rate of 90% of consumers one year later. XII.ANALYSIS

In analyzing Alternative A, I feel that there is potential to achieve Criteria A (increasing revenue). While a partnership with a group like Jenny Craig will not provide a solution for all consumers (assuming that this would not be in-expensive), Alternative A has the promise to have success with a wealthier cliental basis. Achieving success with this group should result in increased revenue through the success of the program (word of mouth). This alternative also provide WW with access to the Jenny Craig clientele that they have not had access to before (opening up an entirely new membership potential).

In analyzing Alternative A, I feel that there is potential to achieve Criteria B. If WW was successful in achieving a partnership with a strong competitor, the two together have the greatest potential of achieving a larger share of the market share. Partnering together, they have the ability to access each of their market data and work together to achieve success for a large number of participants.

In analyzing Alternative A, I would be concerned about the ability to achieve Criteria C. A partnership between two competitors serving an entirely different function for WW would certainly have a great impact on growth potential but I think it would be a large stretch to imagine that it would result in retaining customers through this effort. This would be an entirely new way to provide a weight loss solution. I don’t think it would have the impact intended of retaining previous customers.

In analyzing Alternative B, I feel that there is potential to achieve Criteria A (increasing revenue). A partnership with a large fitness center chain like 24 Hour Fitness would be a good partnership to show that the WW solution is a full partnership between eating well and exercising. Achieving success with this group should result in increased revenue through the success of the program (word of mouth). This alternative also provides WW with access to the membership of the fitness centers that they have not had access to before (opening up an entirely new membership potential).

In analyzing Alternative B, I feel that there is potential to achieve Criteria B. If WW was successful in achieving a partnership with a large fitness chain, the two together have the greatest potential of achieving a larger share of the market share. Partnering together, they have the ability to access each of their market data and work together to achieve success for a large number of participants.

In analyzing Alternative B, I feel that there is potential to achieve Criteria C. While the partnership with the fitness center chain may not be attractive to all of the WW consumers, I don’t believe that it would dis-attract them either. Many of the WW members would likely find this
partnership to be a beneficial partnership for them as members. I believe that a side benefit of this option would be attractive to the majority and would result in an excellent retention strategy.

In analyzing Alternative C, I feel that there is great potential to achieve Criteria A (increasing revenue). A partnership with large insurance companies would be an excellent partnership. Weight Watchers would have guaranteed payers and access to a large number of participants that could be incented to utilize this program to achieve weight loss. This combination would result in significant opportunity for increased revenue.

In analyzing Alternative C, I feel that there is potential to achieve Criteria B. If WW was successful in achieving a partnership with large insurance companies, an indirect result could be achieving a larger share of the market share. Partnering together, they have the ability to access new consumers who may not even be actively in the market to lose weight. If the two companies found success in documenting their ROI, they would have even greater potential for increasing their market share.

In analyzing Alternative C, I do not feel that there would be a direct correlation to achieving Criteria C. While the partnership with the insurance companies may not be of value to the WW consumers, I don’t believe that it would dis-attract them either. Alternative C has a great opportunity for increased revenue and new business but does not necessarily (and unlikely) result in retention of previous consumers.

XIII.SOLUTION OR EXECUTIVE SUMMARY

Weight Watchers is struggling with the need to reposition the company to create a forward-focused diet program for the next century while staying true to their mission. There is an increased amount of competition and an economic downturn that impacts the average consumer’s ability to purchase non-essential programs and products. These issues have forced the Weight Watchers Company to re-evaluate their program to position themselves for a successful future.

The best alternative for Weight Watchers is to partner with a large national fitness center chain to position them as a full solution to meet the goal of weight loss success. By partnering with a national fitness center chain, Weight Watchers will be successful in increasing revenue by 25%, increasing market share, and retaining current consumers. This partnership addresses their weaknesses as differentiating themselves from fad diets (important combination of exercise and eating healthy). This allows WW to evolve their operations to meet a new and changing consumer need and offer a refreshed programming that will result in increased members and revenue.

This alternative plays into their strategy of their brand and effectiveness. With the right partnership they can maintain their low variable expenses and low capital requirements. The program continues to provide a flexible operation and differentiates them further from their rivals and opens them to new opportunities in the market.


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