Weight Watchers International, Inc. - a Case Study

Weight Watchers International, Inc.

A Case Study

The History of Weight Watchers International, Inc.

Weight Watchers International, Inc. was founded in 1961 by Jean Nidetch, who had found herself constantly on a diet but never losing any weight. Knowing she needed more she attended a diet seminar. Ms. Nidetch lost 20 pounds after the seminar, but soon found her motivation dwindling. She invited some friends over who sympathized with her battle of the bulge and they began to share with the group their struggles with food. The group of women began to lose weight and within a short time Nidetch was hosting more than 40 people in her apartment for these support group meetings.

Weight Watchers International, Inc. is an industry leader of weight loss and management services, serving 30 countries. Presently, over a million people attend over 40,000 meetings weekly throughout the world. Research shows that people who have support through weekly weight groups are more likely to lose and keep it over others who try to lose weight on their own.

Weight Watchers International, Inc. provides weight management services; it operates internationally through a system of company owned companies. Adapting to the customer base, Weight Watchers now offers Internet subscription to their weight management products, this allows a convenient option for those who miss a meeting or for those who do not or cannot attend weekly group sessions.

Weight Watchers International, Inc. - S.W.O.T. Analysis

SWOT Analysis - Overview

Weight Watchers International, Inc. is in the customer service industry, providing weight management services internationally. Strengths include loyal customers. Their increasing liabilities are a weakness. The growing popularity of other programs, such as yoga, are a threat as well as intellectual property violations that could impede the company's growth. The growing market dealing with childhood obesity is an area that Weight Watchers will see growth for the company along with focusing more on men.

Weight Watchers International, Inc. - Strengths

Loyal Customer Base

The company's customer centered operations enjoys a strong and loyal customer base that will ensure that Weight Watchers International, Inc. will continue to generate revenues. Weight Watchers strives to maintain efficiency by keeping up-to-date on the latest scientific study and tries to adapt the consumers changing lifestyles.

Products and Services

The company currently owns many trademarks, patents, and has other proprietary rights; both domestically as well as internationally. Trademarks are valid when used in the course of trade; the patent protection are for varying periods of time and are enforceable in the country that the patent is granted. Each country has different legal remedies if the patent has been infringed upon. These rights are important to the future success of the business and are aggressively protected and disputed when applicable.

Weight Watchers International, Inc. - Weakness

Liabilities

As liabilities increase, short-term business decisions are affected. When Weight Watchers International, Inc. was compared to the previous five years in 2010 it showed a falling current ratio that most likely is due to rising liabilities and decreasing assets. A lower current ratio indicates that Weight Watchers International, Inc. is in a weaker financial position than other similar companies. The rising debt could impact the day to day business operation as it will impair the company's ability to borrow and / or repay money.

Weight Watchers International, Inc. - Opportunities

Rising Demand

The rising demand of weight loss services; millions of people participate in commercial and self-help weight loss programs. According to the Center for Disease Control, obesity accounts for about 10% of the total US healthcare budget. Over 25% of the US population is considered to be obese. These high numbers can be attributed to changes in lifestyle, diet and eating styles, the improved standards of living and more people in front of computers. An increased amount of children have been diagnosed with health issues that are directly related to being overweight. This opens a new market for Weight Watchers International, Inc. and should improve the financial performance of the company. As well as the underserved male population; Weight Watchers has already taken great strides in addressing the gender issue and has produced a male point system and on-line tools designed specifically for males.

Weight Watchers International, Inc. - Threats

Purchasing decisions made by customers regarding weight management is biased and can easily be affected by many different things. Weight Watchers' competition is anything that is perceived to be more effective or a more favorable weight management system. This industry is contingent on the customer demands, based on the popular appeal of the latest and greatest programs.

Franchisees and licensees actions could directly affect the perception of Weight Watchers International, Inc. including any breach of contract obligations. The Weight Watchers products are subject to being recalled for any deficiencies. Negative publicity will unfavorably affect the brand image and result in decreased people showing up for meetings, lower internet use, as well as lowering product sales.

The company is also exposed to other countries political and social unrest. If there is any social or environmental turmoil could decrease need for Weight Watchers programs. Changes to US and foreign government regulations, tariffs, taxes, economic downturns, inflation, and social instability can affect the financial results for the company. Foreign government regulations may restrict certain abilities of the company to operate or acquire new business in the country.

Porter's 5 forces

Threat of new entrants

There are no other brands that have the longevity that Weight Watchers does or the vibrant on-line community currently enjoying the ease of use and privacy. The company has a proven track record of supporting weight loss and management of weight loss goals. Weight Watchers customers are loyal and are engaged in their weight loss management. The on-line environment made it easy for those who did not or could