Elaborative SWOT Analysis of Peloton – A Pioneer Company In Home Fitness

Products of Peloton 

Peloton has been in the industry for 10 years and is dealing with the products such as:

• Peloton Bike
• Peloton Tread
• App and Classes 

Competitions of Peloton

As Peloton is described as “Netflix for Fitness”, many players came into the market to compete with Peloton. The top 5 competitors of Peloton are:

• Flywheel Sports Inc.
• SoulCycle
• MIRROR
• FORTE
• BowFlex 

Now, we know the brief of the company, what it is, what it does and the relevance of its existence. Let us dive into the SWOT Analysis of Peloton.

SWOT Analysis of Peloton 

A SWOT analysis examines the strengths, weaknesses, opportunities, and threats that a firm faces. SWOT Analysis is a tried-and-true tool that enables a company like Peloton to compare its business and performance to that of its competitors.

It will give us a strategic analysis of its internal and external environment, which is crucial for understanding the SWOT Analysis of Peloton.

To better understand the SWOT analysis of Peloton, refer to the infographics below:

Below is an explicit guide to the SWOT analysis of Peloton.

Strengths of Peloton

Peloton, being one of the leading companies in its industry, has several benefits that help it flourish in the marketplace. These strengths not only help it retain market share in existing areas but also help it break into new ones.

• Brand Recognition: Peloton has established its brand in the fitness industry as being the pioneer to enter the market. It has more than 5 million users across 5 countries it operates. 
• Strong Product: It provides customers’ needs in a unique way. It combined hardware and software, fitness equipment and fitness training in one set. 
• Multi-Device Access: With one subscription, users can enjoy multi-device access for families by listing different accounts. Customers can choose to subscribe to digital membership for training only. 
• Huge Loyal Customer Base: Peloton has over 5.9 million users on its platform with 2.3 million connected fitness subscribers. It had an over 92% of annual retention rate on its subscription packages.
• Strong Customer Relationship: From the year 2012, Peloton has developed good relations with its customers and due to that, they have reached the majority of its potential market by providing amazing fitness products and fitness motivational classes.

Weaknesses of Peloton

Peloton’s weakness is an area where he can improve. Strategy is about making important decisions, and weaknesses are areas where a company could improve with the help of a SWOT analysis.

• Narrow Product Range: It has only two fitness training, hardware products in comparison to its competitor: bike and treadmills with two varieties. Its accessories and apparel range are very limited compared to its competitor.
• Reliant on Third Party: Since the products consist of a digital dashboard and different functions, Peloton depends on third parties for services such as musical content, logistics and suppliers. They lack control over third parties compromising on their operations, quality, efficiency. 
• Limited Market: Peloton only exists in the US, UK, Canada, Germany and recently in Australia. Though they have high customer retention they are not able to extend in large markets by which Peloton has limited markets. 
• Branding & Marketing: Peloton comes into different controversies of patent and copyright of things to its competitors. It tangled with Flywheel and paid $59 million in legal settlement and fighting recently with Echelon Fitness & Icon Health Inc. 
• Competition with Brands Affecting the Market: Although Peloton has a unique marketing strategy the new brands and other existing brands are also coming up with new strategies. But to maintain the position of best fitness products they need constant advertising, improvement in their products and this causes the majority of the expenses of the brand.
• Limited International Presence: Peloton currently operates in only five markets around the world. It should consider operating in other countries, to expand its business and create strong brand recognition and awareness in the market.

Opportunities for Peloton

Opportunities are possible areas for a company to consider to improve results, sales, and, ultimately, profit. Peloton includes the following opportunities:

• Geographic Expansion: Opening its branch or franchise globally helps Peloton to expand its marketplace. There are many people in the world who need the solution provided by Peloton and replicate it in the market with some personalization. 
• More Product Range: It had the opportunity to improve and innovate the range of equipment, apparel, accessories and training in the marketplace. 
• Strong R&D: Research and development is an integral part of any company, especially tech companies and with less product differentiation and huge competition, it seems that Peloton needs R&D for product differentiation and Human-Centric Design.  
• Using First Mover Advantage: Instead of fighting with competitors, they can position themselves as a pioneer and quality brand. Launching new products before the market is an addition. 
• New Technology: Peloton may now use differential pricing in the new market thanks to the new technology. It will motivate the company to reinforce its existing clients via excellent service while also attracting new customers through various value-oriented offers.

Threats to Peloton

Many factors can affect your business outside its immediate environment. Some of these include factors such as a shortage of skilled workers or a supply chain issue. The threats Peloton is facing are as follows

• No Barrier in Entry: As they have no registered patent, anyone can enter and copy their product. They have already fought legally with 3 companies and also lost money. They have not maintained the first-mover advantages by which their competitors are the biggest threat. 
• Stiff Competition: Company heavily relies on sales of bikes and treadmills and numerous brands are dealing in the same category. 
• Financial Risk: Peloton has not been able to make a profit though it went public. Analyzing the yearly reports of peloton seems always in loss which can lead the company to collapse.
• Dependent on Products: Most of its revenue comes from the product rather than subscription since they have limited product and geographical region and high competition. Declining sales of its product lead to a decline in revenue. 

This ends our elaborative SWOT analysis of Peloton. Let us conclude our learning below.