Based on the case please answer the following question: 1. What recommendations

Question

Based on the case please answer the following question:

1.       What recommendations would you make to Fitbit management to address the most important strategic issues facing the company?

Fitbit, Inc. Has the Companyy Outgrown lts Strategy? Rochelle R. Brunson Baylor University Marlene M. Reed Baylor University itbit revolutionized the personal fitness activ- ity in 2009 with the introduction of its Tracker TechCrunch50 Conference drumming up preorders for their product. Neither man had any manufactur wearable activity monitor. By 2016 the com experience, so they trave led to Asia and sought pany was a hit in the marketplace with Fitbit devices out suppliers and a company to produce the device becoming nearly ubiquitous with fitness enths for them. asts and health-conscious individuals wearing devices and checking them throughout the day. The market at the end of 2009, and the company shipped company's sales of activity monitors had increased approximately 5,000 units at that time. They had from 5,000 units that year to 21.4 million connected additional orders for 2,000 units on the books. health and fitness devices by year-end 2015. The company executed a successful IPO (initial public called an "activity monitor" which was a wireless- offering) in 2015 that boosted liquidity by $4.1 bion enabled wearable technology device (see Exhibit 1). and recorded revenues of $1.86 billion by the con The purpose of the Fitbit was to measure personal clusion of its first year as a public company. Fitbit's chief managers expected 2016 revenues in the range EXHIBIT1 Fitbit Ultra of $2.4 to $2.5 billion. However, on the last day of February 2016 the price of Fitbit stock plunged nearly 20 percent after the company announced that the sales and earnings in short of analysts' forecasts. The missed forecasted milestonecreated a dilemma for founders James Park and Eric Friedman, who were now faced with finding a strategy to turn things around at the now publicly traded company the Fitbit put its product named Tracker" on the The product Park and Friedman developed was first quarter would fall BACKGROUND ON FITBIT Fitbit was founded in October 2007 by James Park (CEO) and Eric Friedman (CTO). The two men started the using sensors in small wearable devices to track individuals physical activities. Before they had a prototype, Park and Friedman took a circuit board in a wooden box around t money. In 2008, Park and Friedman addressed the company after noticing the potential for Dons Kr unov Source: Fltbit, Inc. webslte. o venture capitalists to raise Copyright Rochele R. Brunson and Marlene M. Reed All rights erved

Explanation / Answer

Fitbit is facing a tough competition from companies like Apple, Xiaomi, Garmin and Samsung. Though Fitbit is leading in terms of financial performance and profitability, market shares and quality of products, it need to be creative and innovative to compete with other players in the market. A very important step in this would be to maximize market capitalization. The companies further compete to create loyalty among their buyers and the suppliers, once a company wins the loyalty of the two parties above, its survival in activity tracking industry will be guaranteed. Entrance of new companies in the industries could pose a threat to the survival of Fitbit in the near future.

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