Fitbit is a company used to provide fitness and health tracking devices. Fitbit remains robust and most performing company despite others with a growth of 10.9 to 22.5 unit's shipments from 2014 to 2016.
During financial year 2016/2017 Fitbit management aimed a revenue increase of $2.4 to $2.5 billion due to the new devices in the market. However, 2016 the management expectation become much more harmful and financial performance decline to $60 million for the first quarter of 2017 which was a net loss (Teece, 2010). The reason being:
Fitbit does not have a group of developers which are used in different ways of generating income as Apple does. Even if their tracker products were more cheaply compared to Apple's ($129 as compared to $349 price for Apple watch, therefore this enables Apple having stock of more harvests than Fitbit. Also, this feature was used by a variety of companies in their products; thus, the ongoing sale of stock remains sluggish affecting the revenue of Fitbit.
The competitive company strategy was poor thus reducing market niche. The rise of many companies in the industry they end up creating new fashion segment of tracking products and helped to raise customer interest in hybrid watches and others with fitness tracking capabilities (Peng, 2017). These products they had multiple uses as per each, compared to that of Fitbit, therefore, losing its interest to the customer.
The manufacturing and launching cost of two new products that is Fitbit Blaze and Fitbit Alpha during 2016 were too high affecting the quarterly earnings of 2016 negatively. Research of the product and its development also ends with negative influence.
Peng, M. W. (2017). Cultures, institutions, and strategic choices: Toward an institutional perspective on business strategy. The Blackwell handbook of cross?cultural management, 52-66.
Teece, D. J. (2010). Business models, business strategy and innovation. Long range planning, 43(2-3), 172-194.