Introduction
Peloton Interactive, Inc., a New York-based manufacturer, was established in the United States in 2012. Peloton Tread and Peloton Bike have connected exercise equipment with touchscreens that enable customers to watch live and on-demand sessions. The firm’s interactive goods are sold directly via retail showrooms and on the company website. Introducing physical stores with fitness centers will greatly boost Peloton’s business and profit.
Peloton Competition
MIRROR is Peloton’s main rival. In 2016, MIRROR was formed as an independent fitness firm to establish a linked workout system. It is no surprise that MIRROR has taken the fitness world by storm as home costs continue to rise, forcing many young people to live in cramped apartments (Winchester, Pleggenkuhle-Miles & Bass, 2021). MIRROR has a distinct advantage over Peloton because of its training courses. Peloton has to contend with another major player in the fitness industry, SoulCycle. Many individuals credit the company’s stated goal of “bring Soul to people” (Winchester, Pleggenkuhle-Miles & Bass, 2021). Evelyn Webster, the next CEO of SoulCycle, will join the firm in December 2020 to revive in-person lessons after the worldwide epidemic, allowing the company to compete more successfully with Peloton.
As a competitor in the fitness business, Life Fitness has put pressure on Peloton. The Integrity Series Treadmill from Life Fitness, for example, maybe outfitted with a variety of consoles, depending on the requirements of the user, to provide a variety of features, including an integrated TV, instructor-led workouts, Apple Watch connection, and streaming applications (Winchester, Pleggenkuhle-Miles & Bass, 2021). People who want to create large-scale gyms are the primary customers of Life Fitness.
Major Milestones
Owing to the major competition in the fitness industry in terms of innovation, having physical stores with fitness centers will put Peloton ahead of its rivals. To begin the project, the first milestone is to develop an executive summary that entails the overall mission statement of the physical fitness centers. The project would start on June 2nd, 2022 end on September 10th, 2022. The estimated capital required to start the project is $400,000 to open up and $70,000 for renovation. Before the start of the project, the planners will have identified ideal places within major cities in the state.
The ideal location for the physical stores is around areas with plenty of people, majorly in major urban centers within the country. By September 20th, the planners would have developed the menu, target market, and opportunity areas. Several fitness centers only offer exercise equipment. Having physical stores with fitness centers would set Peloton ahead of its competitors by giving them what they need.
High-Level Business Model
The company’s business approach would be direct-to-consumer. A new generation of consumer enterprises has chosen to cut away the intermediaries in order to cultivate a loyal client base and accelerate expansion. By eliminating the intermediaries, Peloton will be able to directly contact with its customers, allowing it to prescribe and define how the workout facilities would be managed. It will utilize the workout equipment it manufactures in the gyms. This would attract customers while serving as a marketing avenue for the firm, resulting in increased revenue. Peloton’s direct-to-consumer strategy would enable it to establish its own prices for the items. This would reduce the expense of intermediaries as well as any other financial charges. The fitness centers would be available to everyone, not just gym enthus facility users. After some time, Peloton may explore selling a few pieces of workout equipment in physical shops, such as exercise costumes. All of this would provide the firm with a regular flow of money.
Financial Projections
Ohmae’s 3 C’s
Ohmae insists that a business focuses on its customer, corporate, and competitor strategies. The business will focus on the age group between 16 to 50. This is the age set mostly interested in fitness to keep fit and reduce weight. Selectivity is a crucial strategy. The business focuses on fitness where it will use Peloton’s fitness equipment (Kartajaya, Kotler & Hooi, 2021). These business strengths will aim to use Peloton’s positive image among the target population to promote the and fitness centers. Peloton has a positive image compared to its competitors; introducing something new into the industry would be challenging, but the undying loyalties of its customers would be the first customer base.
Conclusion
Peloton is a major fitness equipment business, and it faces stiff competition from rivals like MIRROR and SoulCycle. Introducing the physical stores with fitness centers is something new in the market, and it will take a great capital investment for the business to implement this project. Setting up physical stores with fitness centers will attract new clients, and it may see other businesses doing the same. However, with well-set milestones and objectives, Peloton will see its success.
References
Kartajaya, H., Kotler, P., & Hooi, D. H. (2021). 4c Diamond Analysis. World Scientific Book Chapters, 147-156. RePEc.
Winchester, C. C., Pleggenkuhle-Miles, E., & Bass, A. E. (2021). Peloton’s ride to growth. The CASE Journal. Web.