Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Teaching Note: Case 7 – Weight Watchers International Inc.
Case Objectives
1. To investigate choice of competitive strategy in a crowded industry environment.
2. To examine how external and internal forces affect competitive strategy.
See the table below to determine where to use this case:
NOTE: There are both PRIMARY and Secondary chapters that can be used for this case. The
Chapter Use Key Concepts Additional Reading and/or
Exercises
PRIMARY
5: Business Level
Strategy
Competitive strategy; generic
NOTE see additional reading
2: External
Industry competition five forces;
NOTE financial &
SECONDARY
6: Corporate-Level
Strategy
Diversification; synergy; core
11: Strategic
Leadership
Leadership; learning organization
12: Managing
Innovation
Innovation; scope of innovation
Case Synopsis
Weight Watchers International Inc. had been a major player in the weight loss industry for over
fifty years. The company was known for its lifestyle approach to weight management and its
Despite fifty years of success in the weight loss industry, Weight Watchers was experiencing
some challenges and opportunities, including: competitive positioning issues, reinvigorating its
In competition with other weight loss players, Weight Watchers faced the challenge of
maintaining market position and reversing its financial decline: entering 2015 Weight Watchers
Intensifying competition in the weight loss industry coupled with the perception of a “stale”
brand image meant Weight Watchers had to reinvent itself. Accordingly, the company was
Teaching Plan
The Weight Watcher case can be used to set the stage for a discussion of business policy and
strategy in a practical real-world environment. Most students can see themselves or their friends
wanting to lose a few pounds, so the issues may be easy for them to visualize. Therefore, this
NOTE – this case can also be used to illustrate marketing strategy, so could accompany a course
in marketing communications or consumer behavior.
ICE BREAKER
This case can start with an icebreaker. Starting from the perspective of a customer may make it
easier for students to transition to a strategic analysis.
How many of you can see yourself (or your friends) having to lose a few pounds, either now or
in the future?
How many of you have heard of Weight Watchers? What other weight loss programs are you
aware of?
Based on what you know, which weight loss programs would you consider joining?
The instructor may want to put a list on the board of the other weight loss programs students
have heard of, including Weight Watchers, and then ask, for each program, how many students,
by a show of hands, would consider joining each one and why. List these numbers and reasons
It may be interesting to also further segment the students by gender and age – do any trends
emerge? Do men prefer one program over another? Do older women prefer a particular program?
It’s also possible some students are fans of health monitoring devices such as the FitBit, or are
intrigued by the personal coaching approach promoted by programs such as The Biggest Loser.
Before engaging in discussion, you might want to test student’s basic knowledge regarding the
Weight Watchers predominately uses the following operational model:
a. Selling pre-prepared meals
b. Providing online tools for do-it-yourself weight loss guidance
c. Holding meetings where members are given instruction and group support
d. All of the above
ANSWER: c This can be misleading. Weight Watchers does sell meals with the Weight Watcher
brand, but these are not part of a prepared meal plan such as used by Jenny Craig and
Weight Watchers’ primary target market is women.
a. Yes
b. No
ANSWER: b Although Weight Watchers started out as a women’s support network, increasingly
Summary of Discussion Questions
Here is a list of the suggested discussion questions. You can decide which questions to assign,
and also which additional readings or exercises to include to augment each discussion. Refer
back to the Case Objectives Table to identify any additional readings and/or exercises so they can
be assigned in advance.
1. How should Weight Watchers compete?
2. What are key forces in the general and industry environments that affect Weight
Watchers’ choice of strategy?
3. OPTIONAL QUESTION: How should leadership manage innovation in this industry, and
what are Weight Watchers’ options for growth?
Discussion Questions and Responses
1. How should Weight Watchers compete?
Referencing Chapter 5: Formulating Business-Level Strategies -
How firms compete with each other and how they attain and sustain competitive advantages go
to the heart of strategic management. In short, the key issue becomes: why do some firms
outperform others and enjoy such advantages over time? The viability of a firm’s success is
Weight Watchers had begun with a simple philosophy: a program that incorporated a food plan
and an activity plan, supported by a community system where the group provided love,
A business-level strategy is a strategy designed for firm or a division of the firm that competes
within a single business. Within the firm’s industry environment generic strategies include basic
types of business level strategies based on breadth of target market (industrywide versus narrow
See the types of competitive strategies, including the three generic strategies that are used to
overcome the five forces and achieve a competitive advantage:
●Overall cost leadership
oLow-cost-position relative to a firm’s peers
●Differentiation
oCreate products and/or services that are unique and valued
●Focus strategy
oNarrow product lines, buyer segments, or targeted geographic markets
Generic strategies are plotted on two dimensions: competitive advantage and strategic target. The
overall cost leadership and differentiation strategies strive to attain advantages industry wide,
Differentiation: This is traditionally where Weight Watchers had excelled, using differentiation
to maintain market share by building off its solid reputation. Weight Watchers’ approach to
Cost Leadership: Weight Watchers had been able to keep overall costs low amidst its use of a
differentiation strategy. Due to its rented space, non-reliance on infrastructure for much of its
Focus: Weight Watchers had been focused in its targeting of young- to middle-aged women in
Other options firms sometimes pursue include:
Combination of Differentiation and Cost Leadership, Combination of Focus and Cost
Leadership, Combination of Differentiation and Focus: While Weight Watchers had pursued a
Stuck in the Middle? Weight Watchers must ensure that it does not get stuck in the middle, and
does not sacrifice the benefits of its original focused differentiation strategy, while expanding its
As explained in the chapter, competitive parity means a firm’s achievement of similarity or being
“on par” with competitors with respect to low-cost, differentiation, or other strategic product
characteristics. Competitive parity on the basis of differentiation permits the cost leader to
Weight Watchers had always been able to control costs because of its flexible business model:
meeting costs were low, and the number of meetings could be adjusted according to demand. The
On the other hand, for those firms that choose differentiation, parity on cost requires that
differentiators must integrate operations at multiple points along the value chain, reducing costs
Competition for Weight Watchers International included both price competition and competition
from self-help, pharmaceutical, surgical, dietary supplement, and meal-replacement products, as
well as other weight-management brands, diets, programs, and products. Weight Watchers had
Weight Watchers was the pioneer of a differentiation strategy within the weight loss industry. It
had prospered with a focused differentiation strategy in the past – targeting women. Now, Weight
Watchers was attempting to branch out into broad-based differentiation, while also adapting to
NOTE – ADDITIONAL READING, WEB LINKS AND VIDEO:
Visit the Weight Watchers main website at http://www.weightwatchers.com/index.aspx
Here are videos showing how the Weight Watchers meetings work, from 2007, highlighting the
Winning Points system:
http://www.youtube.com/watch?v=4SftzmDQJmI (Part 1)
http://www.youtube.com/watch?v=hi4L_zJTkiA&feature=related (Part 2)
In 2007, Weight Watchers promoted an online weight loss support site specifically for men. See
the website here: http://www.weightwatchers.com/men/index.aspx
Weight Watchers has a branding and publishing arm that has been prolific over the years.
Including books written by spokespersons, Weight Watchers has a number of branded product
Weight Watchers is not the only program involving group motivational techniques. See the
following article for a report on the creation of a free online program called SparkPeople. This
online support site provides a networking site for like-minded people who help each other set
Other competitors to WeightWatchers can be evaluated at several online sites:
See ratings from U.S. News & World Report, Best diets methodology: How we rated 35 eating
There is some scientific evidence for the efficacy of a structured weight loss program such as
Weight Watchers. A study published in the Journal of the American Medical Association (JAMA)
in 2003 found that participants in the Weight Watchers program lost more weight than those who
Scientific evidence for promoting one diet over another has also not been conclusive. One 2005
study published in the Journal of the American Medical Association (JAMA) compared Weight
Watchers, Atkins, Zone, and Ornish diet plans and found that after one year all diets “modestly
A report from 2012, in conjunction with the journal Obesity, found that “commercial weight-loss
programs like Weight Watchers may be just as effective in losing weight as clinical programs,
After considering the above, why has Weight Watchers been able to compete for so long against
so many different companies?
Take a look at the case financial exhibits. Where does Weight Watchers appear to make the most
of its money, and what does this say about potential competition?
