BE485 Management and Strategy Report Sample
Task
Introduction (approx. 750 -1000 words)
• Outline dearly your key objectives
• Briefly refer to the theoretical framework influencing your study.
• Outline dearly your key arguments/conclusion.
• Provide an overview of your chosen organization (alternatively this can be covered at the beginning of the main body)
• Outline the structure of your work.
Main Body (approx. 200)
• Identify and discuss thoroughly the strategic challenge that your organization is facing or is likely to face in the future.
• Use tools and theories we cover in the module.
• Reflect on what has to be done to address the identified strategic challenge.
• Use theories we cover in the module.
Conclusion (approx.500 words)
• Summaries your work
• Outline your key arguments
• Discuss the significance of your study by linking the case to the broader strategy literature.
Assessment
• 100% coursework. Two Assignment
• 500 – 750-word formative essay (optional)
• 3500 word analytical essays, 100% of the final mark.
• For Assignment criteria, please see assignment guidance under assessment information on moodle.
Assessment
Requirements for assignment 2 (final Assignment)
• The organization’s decision-makers were convinced by your (assignment 1) analysis and has decided to investigate the strategic issues/ challenge further. Choose a key are to examine in more details to provide the decision-makers an in- depth analysis of the strategic challenge and what should be done to address it.
Please write a 3500 – word analytical/argumentative essay examining a strategic issue arising from the case study you worked on for assignment 1*. You can choose your own focus and research question
• The purpose of this assignment is to examine an aspect of the case you are already familiar with more deeply and analytically than in assignment 1. Be sure to develop a clear, tight focus on the particular issue you wish to examine. Part of the task in the assignment, then, is being able to show that you can develop a specific focus for the investigation that you then carry out in the space allocated.
• Be sure to include a clear and meaningful research question or thesis statement in the introduction of the essay. You are arguing a point to persuade the reader to agree with you through reasoning and evidence. This assignment is about developing analytical focus and using supporting evidence critically. Include visual aids or graphic, if you think they help you to convey your perspective and strengthen your argument. You can use non-academic sources (research literature), include but not necessarily to strategy literature.
• All sources used must be correctly referenced in Harverd referencing style in the essay. The word limit does not include references of possible relevant appendices. You do not need to include an abstract but be sure to give your essay an illustrative title.
1.0 Introduction
Key objects
The main key objectives of the report to focus on the sale which is substantial drop worldwide. The company's sales are totally dropping due to the high price of the products in the fitness industry. University Assignment Help, due to this reason, people do not want to buy their products, and their sale is dropping gradually. From the case study analysis, the other objective is their product quality because the company is faced with the issues of low product quality. From the case study, it can be identified that a person is faced with the issue of a heart attack case due to low product quality. Another top objective is the premium price of their products, which is also a reason for declining their sales performance in the fitness industry.
Theoretical framework means
The PESTLE analysis helps to explain the country's scenario in a different sector, such as political, economic, social, legal, environmental and technological. That explains why the factor helps the company influence the fitness industry. The company impact positively and negatively through these facts. Porter's Five Forces is considered a tool that helps to understand the company's competitiveness in the business environment (Putera and Heikal, 2021). Five factors help to analyse the fitness industry through using these factors. The SWOT analysis helped to discuss the strength and weaknesses of the company. In addition, it also explained the company's opportunities and threats in the USA's fitness industry (Putera and Heikal, 2021).
Outcomes from the theories
In the report, the first theory, PESTLE, is used to analyse the issues of sale drop in the country's fitness industry. From the analysis of PESTLE, it can be understood that the company face many issues which help to drop their sale performance in the country. From the analysis of the environmental factors, it can be identified that the citizen of the country likes eco-friendly packaging strongly, whereas the company do not use eco-friendly packaging (Verma, 2021). As a result, it negatively impacts the company's product packaging. This is the one reason for the drop in fitness industry sales. In the USA, people like more sustainable packaging, and because of their packaging, their sales performance is down in the USA (Galera Calleja, 2022).
From the analysis of porter's five forces, the company faces issues for a new entry in the fitness industry. Entering this market is easy because anybody can easily start it with the help of online mediums. In addition, many competitors are available in the industry, which makes more competition for the company (Galera Calleja, 2022). As a result, the company faces the issue of sticking in a position in the market. Competitors of the company also provide the same facilities to their customers at the help of more cheap prices (Tiia, 2022). The company's competitors are selling fitness products to their customers, providing many offers and more easy facilities.
From the analysis of porter's five forces, it can be stated that the power of the buyers in the country's fitness industry is high. This is another reason for dropping their sale in the market. From teh same point of view, the product quality of the company is the worst, which is another reason for reducing its brand image in the market (Tiia, 2022). In the USA market, users have many facilities to choose fitness products from another source rather than Peloton. In addition, the company also use premium price to sell their products which is more expensive for their users.
As a result, for that reason, the company also faces the issue of less profit in their sale performance in the fitness industry (Nusinow et al. 2020). From the SWOT analysis, it can be identified that the company is facing the issues of less profit because of their pricing strategy and low quality of products. In addition, the company is also available in very few locations, so they do not expand its business to many places (Nusinow et al. 2020). This is another reason to face loss in the company's sales performance.
Company background
The company is an American company which sells exercise equipment and also media. The company belongs to the exercise equipment industry. The company's headquarters is situated in the city of New York, United States. The company has 141 showrooms along with 2 studios. The company has 8,662 employees in 2021 (onepeloton.com, 2023). The company is provided with the service of fitness classes and provides a subscription facility available. The company's products are workout bikes, treadmills and the available fitness equipment for their customer. The company also provides online platforms for their users, live classes, and fitness demands of the customers, including the track fitness matrix. The company's annual revenue is 4.02 billion in 2021 (onepeloton.com, 2023).
As a product, the company continues their business in the fitness industry in the USA. They sell fitness equipment, treadmills and free weights bikes. From the same point of view, the company also earns revenue from providing branded apparel, installation, and extended warranty agreements. Most of the company's revenue is from selling its fitness products in the industry to their customer (onepeloton.com, 2023).
In addition, due to the pandemic, the company faces many losses in their business because that time the government imposes regulations to close the function of fitness institutions. As a result, the company lost $1.2 billion due to the restriction of government (onepeloton.com, 2023). Their supply chain is stopped, and they continue their business and focus more on their online platforms. They encourage people to get more subscriptions to get fitness guidance.
Structure of the work
The report discusses the sales dropping related issues the company faces in the growing competitive market. These strategic issues also impact the business of the company in the future. It can be stated that the PESTLE analysis which explains the company countries fitness industry overview. As a result, it helps to understand the company's position in the market and assume the future position. From the same point of view, the report also explains the SWOT analysis of the company and porter's five forces of the fitness industry in the USA. It can be identified as the company's background and market position in the USA.
2.0 Main body
2.1 Evaluation with PESTLE analysis
Political
The political stability point of the USA is 0, which means that the country is very stable in the political facts (theglobaleconomy.com, 2023). There is no restriction to continuing the business in the fitness industry. The country also has a good relationship with other neighbour countries. As a result, it positively impacts the company because it also provides a chance to expand its business to other countries. In addition, in the world competitive rank, the country ranked in this index is 10th (worldbank.org, 2023). As a result, it positively impacts the company because the company easily continues their business in the fitness industry in the USA.
Economic
The GDP growth rate of the USA was $20.89 trillion in 2022 (worldbank.org, 2023). As a result, it positively impacts the company with the help of the high growth in the economy. In this fitness industry, the company faces high economic growth in their business. In addition, during a pandemic, the company is not getting a profit due to the restriction on the fitness industry. To start the business again, the company get loan easily from the banks. The country has the second position in the PPP index, so the purchase power parity is 19,490 billion (worldbank.org, 2023).
Figure 1: Annual change in GDP
(Source: worldbank.org, 2023)
It also positively impacts the company's business because people have money to buy fitness products. As a result, it helps to increase the company's economic growth. The per capita income of the USA was 70,480 PPP dollars in 2021 (worldbank.org, 2023). It also positively impacts the company because people buy more workout instruments, such as bikes and treadmills. The country's unemployment rate is 3.7 per cent (bls.gov, 2022)). So it negatively impacts the company because it is not getting cheap labour. The company pays more amount for their labour.
Figure 2: the unemployment rate in the USA
(Source: bls.gov, 2022)
Social
The fitness industry in the USA is more active among the young population. The young population is more interested in engaging with the fitness industry. The youth populations age in 18-35 get more subscriptions. Among the total population, 75 per cent belong to the young population (census.gov, 2023). As a result, it positively impacts the company because they get more subscriptions and purchase more fitness products. It helps to increase profit and expand the business.
From the same point of view, many old people also get online subscriptions for fitness training. The old-age population of the country is 44 per cent, which also positively impacts the company because they also show interest in getting subscriptions (census.gov, 2023). Most of the USA's people are very concerned about their health. After the pandemic, people keep more focus on their fitness-related issues.
Technological
The USA plays an important role in the technological field, and they always follow advanced technology. In all sectors, the USA uses advanced technology, which helps to increase performance. Based on advanced technology is helped to improve the performance of the fitness industry (Sunderam et al. 2019). When technology is more advanced, so it helps to use more advanced technology to increase performance, and people are more motivated in the fitness industry. As a result, the company faced a positive impact in increasing its subscription number. The USA got 2 positions, and the country's rank is 3.2 (worldpopulationreview.com, 2022).
From the same point of view, the USA is also well-established in IT infrastructure. As a result, the company will benefit from using IT facilities for its digital training. The company faces issues with hacking cases. In the same context, this technology helps the company to use it in its digital operation (Hurry et al. 2020). The company gives better service to their customer by using technology. As a result, it helps increase the fitness market's customers. In addition, the company also provides tech-savvy customers based on their indoor workout sessions to interact during the session by using their mobile phones and sharing screens with the users.
Legal
In the law and regulation, the USA is known as a very strict country. In the fitness industry, the government of the USA allows copyright laws, vague patents and licenses, leading to legal battles in the industry. From the same point of view, the copyright act of 1976 helps the company to protect its business in the competitive market of the USA (worldpopulationreview.com, 2022). The emergence of general workout content and interactive programs leads to intellectual property infringements.
In the International Intellectual Property Index 2022, the USA scored 95.48 points (statista.com, 2022). With the help of intellectual properties, peloton has to protect its patent, copyright and trademarks. When users see that their information is in protected hands, they easily engage with the company. Durin gets a subscription from the company; the customer shares much private information with the company. By using the regulation, the company is protecting their information.
Environment
The people of the USA are very much concerned about nature. In addition, they are very much eco-friendly. In this aspect, the company fails to give sustainable fitness packaging. The citizen of the country is boycotting them who are not eco-friendly. It negatively impacts the company's business. From the same point of view, many people want to purchase the company's products because they do not use sustainable products. The carbon emission rate of the USA is 13.68 per capita, and gradually, it increases in the industry (worldpopulationreview.com, 2022). When the company uses these workout machines for whole days, it has a chance to increase the carbon emission rate. As a result, it negatively impacts the company.
2.2 Evaluation with Porter's five forces analysis of peloton
Threats of New Entry
In the fitness industry, the company faces a high force in the threats of new entrants. Basically, it needs a huge investment of money, and it also needs more using advanced technology. The market share and the profit are the more challenges for the company in the fitness industry. It is not impossible to enter the industry (Verma, 2021). As a result, the company faces high force to stay in the industry. New entrants make more attractive products to attract the client and provide many offers to their new clients. This creates a problem for the company to continue their business in the competitive market in the fitness industry (Verma, 2021).
Bargaining Power of Suppliers:
In the USA fitness industry, the bargaining power of suppliers is low. The company has suppliers in Taiwan, and most of the manufacturers come from Taiwan. As a result, the company easily reduces their supplier's issues in getting the products (Galera Calleja, 2022). The company is not facing more issues in the fitness industry in the USA. with the help of suppliers' support; the company is easily solving the issues and getting products for their user's use.
Bargaining power of buyers:
The bargaining power of the buyers is high for the company. In the fitness industry in the USA, many options are available for their customers. The price of the company's products is high, and people like to get a cheap price for products and services. The company uses premium prices, so the products and subscription price range are high (Tiia, 2022). In addition, the company does not have a low-price scheme and provides a yearly subscription. The company faces slow purchase in their business market. As a result, it is a high force which impacts the company selling performance. The company uses their pricing strategy as premium, so most users buy products from other shops like local shops (Richards et al. 2020).
Competitive rivalry
In the fitness industry, the company faces a highly competitive force. The company has many competitors in the market, such as blow flex, Myx Fitness, Echelon, ProForm and NordicTrack. In the fitness industry, the company also use premium price for their products and service. On the other hand, the company's top competitor sells workout bikes, which are less cheap than the company's priced workout bikes (Nusinow et al. 2020). From the same point of view, the competitors also provide the same facilities as the peloton. They also provide digital training to their users by giving subscription facilities.
Threats of substitutes
In the fitness industry, the company faces high-force threats of substitutes. In the market, many substitutes are available. There are many local sites which also provide the same facilities without paid subscriptions. In addition, the company use premium price to sell their product and service. However, people like to purchase products and services at less price (Nusinow et al. 2020). Most people purchase generic bikes at fewer prices. People can buy products from another source at cheap prices.
2.3 Reflection on the findings through Swot analysis of peloton
A SWOT analysis is conducted on the basis of the findings from the evaluation models.
Strength
The company is developing its brand recognition in the fitness industry. In addition, the company has 5 million users and operates in around 5 countries. They are the pioneer in entering the market (Gazzola et al. n.d.). The company has strong products with the help of a unique way. The fitness industry provides fitness equipment such as hardware, fitness training and software facilities. They also provide the facilities to access multi-device in one subscription. Users can enjoy multi-device access for families and their own by creating many accounts with the help of one subscription (Galera Calleja, 2022). Customers choose to subscribe to get the facilities of digital membership for only training purposes. Strength is the loyal customer base. Peloton has 5.9 million users and 2.3 million fitness subscribers (Galera Calleja, 2022). As a result, they recovered a 92% annual retention through their subscription packages (Edmonds et al. n.d.).
Weaknesses
The company's weakness is its narrow product range in the country. The company has only two fitness training products which are fewer than the competitors. In addition, they also have the two varieties such as treadmills and bikes. Its apparel and accessories range is very limited, less than its competitor. The company also depends on third parties for logistics, suppliers, and musical content services (Menshikov and Volkova, 2019). In addition, they also have less control over the third party. The company also has limited markets, such as Canada, the UK, the USA and Germany. Recently they also opened a new store in Australia. They face high employee retention so they are not extending their business in large markets. In the fitness industry, the company faces high competition (Roy, 2020). However, the company has a unique marketing operation plan with the help of the new brands. However, in the industry, other existing competitors are also coming up by using new strategies. The company needs constant advertising and product improvement to maintain its brand's position (Menshikov and Volkova, 2019).
Opportunities
The company has the opportunity to open its new store in another country and also open a franchise to expand its business in the marketplace. In the fitness industry, many people like to get the solution from the peloton, and they replicate it with the help of some personalisation (Edmonds et al. n.d.). The company also has the opportunity to increase more products and innovative items for its users. They increase the range of fitness equipment, accessories, apparel, and training in the industry. In addition, they also have the opportunity to use more innovative Research and development. This is an integral part of the company to spread its business in the market (Roy, 2020). Like peloton, those companies need more technology which helps to reduce product differentiation and huge competition; it can be stated that the company needs R&D for making Human-Centric Design and product differentiation (Edmonds et al. n.d.).
Threats
The company does not have a registered patent; anyone can enter the business easily. From the previous history, the company also lost their money to fighting with 3 companies. They have not focused on the first-mover benefits where other competitors are the biggest threat. The company faces high reliance on sales of products such as treadmills and bikes and also faces issues dealing with numerous other brands in the same category (Roy, 2020). The company has not been able to earn a profit. When the company also analyses the yearly reports, they see huge losses. The other threat is they depend on the products. They are more revenue from selling their products rather than from subscriptions. From the same point of view, they also have fewer products and geographical regions (Menshikov and Volkova, 2019).
After analysis the PESTLE and SWOT analysis, the report identified that the factors which negatively impact on the business of Peloton. The company faces loss in their business because of not use sustainable packaging in their packaging system. This negatively impact on the company. Through SWOT analysis the report identified that the narrow business expansion, limited apparel and accessories range, more depend on third party is impact on their sale of the company in the fitness industry in the country.
3.0 Conclusion
The report id expelled the key objects, which are the issues which get from the analyses of the case study. The report overviewed the company's background in the market of the USA. It can identify the result of using theories to evaluate the company's challenges and find out the reason for losing sale performance in the fitness industry in the USA. The company has not had a huge brand image in the fitness industry in the USA. In addition, the company has fewer numbers locations in their stores for selling its products. In the business industry, the company only has 20 stores which are not enough to reach the target of the company.
The report mainly focused on the issues such as sale drop, poor quality of products, and premium prices. It can be identified from the case study. In addition, the report discusses the challenges with the help of using many theories such as PESTLE, porter’s five forces and SWOT. These theories help the company to evaluate the reasons for face loss in their sale performance. The factors of the theories have to identify that the company's product packaging negatively impacts its business. This is the one reason for the drop in fitness industry sales. From the analysis, it can be understood that the people of the USA like more sustainable packaging, and the company is not using sustainable packaging. Hence, their sales performance is down in the USA.
This analysis helped the company find out the reason for failing to earn more in the market of the USA. In addition, the SWOT analysis also identified that the company is facing the challenges of less profit because of their premium pricing strategy and low quality of products. From the same point of view, the company is also available in very few locations, negatively impacting business expansion. If, the company increases their store number in many places. Moreover, for that reason, the company faces a loss in their sales performance.
The main significance of the study is that it helps the company find out the reason, and they will take action to solve the problem, and it increases the profit in the sale performance in the fitness industry in the USA. The company changes their pricing strategy, which helps to increase their sale and improve its profit percentages.
References
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