Abstract

This case is about the success and fall of leading global wearables company Fitbit, Inc. (Fitbit). As a pioneer in the wearable fitness tracker business, Fitbit tasted initial success and introduced many models of wearables, which became highly popular. With Apple Inc. (Apple), foraying into smartwatches, Fitbit also started making smartwatches. At the same time, Chinese players like Xiaomi entered the market with feature-rich, low-priced wearables. Fitbit could not compete either with Apple at the high end of the market, or with Xiaomi at the lower end, and started losing its share rapidly. Its problems were compounded by a rise in operating expenses, quality control issues, data security issues, and durability and the company found itself struggling in the wearable device market. And with consumer interest in the wearable devices going down, Fitbit had huge challenges ahead. James Park (Park), co-founder and CEO of Fitbit, was looking to implement a suitable turnaround strategy to bring Fitbit back on track. He brought in Jeff Devine (Devine) who was given the task of coming up with a strategy to turn the company around.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• To appreciate the importance of focus and a clear recognition of its strengths for a company.
• To analyze the reasons behind the decline of the pioneer in the wearable devices industry.
• To examine the events that would lead to the turnaround of a company.
• To study the future of the wearable devices industry, considering the changing trends and preferences of the consumers.

Keywords

Turnaround Strategy; Decline; Evaluation of a turnaround plan; Competitive strategy; Fitbit; James Park; Strategy Formulation; Wearable Devices Market