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15 page paper on increasing revenue for Peloton

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Answered 9 days After Mar 06, 2024

Solution

Dilpreet answered on Mar 15 2024
9 Votes
Strategies to Revamp Peloton’s Revenue        2
STRATEGIES TO REVAMP PELOTON’S REVENUE
Executive Summary
    This report focuses on the strategies and methods, which Peloton can use to help the fitness equipment manufacturer Peloton in order to improve its declining revenue over the years. The primary products of the business have been identified as stationary bicycles, treadmills, and indoor rowers equipped with Internet-connected touch screens that stream live and on-demand fitness classes through a subscription service. Peloton needs to improve its business strategies to make a comeback and to improve its revenue. The report is a detailed analysis of the methods and strategies, which can help in revamping the revenue of Peloton.
Table of Contents
Introduction    4
Primary Factors Behind the Downfall    4
Strategies and Recommendations for Improving the Revenue    5
Global Expansion    5
Increasing the Hardware Range    5
Expanding the Business through Acquisitions    6
Expanding Through Apparel    6
Becoming an Open Platform    7
Advertisement    7
Moving into Nutrition    8
Wearables    9
Making Use of Latest Technologies    9
Marketing Opportunities    10
Four Ps of Marketing Mix for Peloton    10
Developing Better Business Strategies    14
Conclusion    16
References    17
Introduction
    Peloton is a company with its origin in America. This is an exercise equipment and media company with its primary products to be stationary bicycles, treadmills, and indoor rowers equipped with Internet-connected touch screens that stream live and on-demand fitness classes through a subscription service. Peloton has been making extensive use of technology and design to connect the people across the globe through fitness. Despite of the innovation and technology they have been putting in, it has been observed that the revenue of the company is going down. This report focuses on strategies and recommendations, which can be used to revamp the declining revenue of the business.
Primary Factors Behind the Downfall
    During the pandemic, Peloton was one of the highest money-making companies and enjoyed tremendous success. However, in the year 2022, Peloton started to notice a downfall making it evident for the management to lay off more than 5000 employees as the revenue was decreasing exponentially. Some of the primary factors, which contributed to the declining revenue were fading popularity of at-home fitness devices, poor logistic operations of the business as well as outdated marketing strategies (CNBC, 2023). Furthermore, subscriptions of the company started to dip in the year 2023. Additionally, the company had to revoke a large number of units of one of its bikes leading to a bad word of mouth, which had an adverse impact on the sales of the company. Also, as people started to move out of their homes and started visiting gyms, the sales of their bikes and treadmills fell. In addition to this, the top management of the company was also not stable. This further added to poor leadership contributing to the downfall of the business.
Strategies and Recommendations for Improving the Revenue
    Undoubtedly, Peloton has faced a massive downfall during the years 2022 and 2023. The business has been making extensive efforts to bounce back and has been putting in a lot of effort to come up with strategies for the revival of the business. Certain strategical recommendations, which the business can use to improve its revenue are:
Global Expansion
    There is a huge opportunity for Peloton to grow in the international market. There are cu
ently four markets, where Peloton has been selling its fitness products. These markets are US, Canada, UK, and Germany. However, there is a huge scope for growth of the business in markets like India, Mexico, Australia, and China. Peloton should think of selling its products in these markets as demand for luxurious fitness products in these markets has been growing. Therefore, Peloton can increase its revenue by expanding into the global markets (Winchester, Pleggenkuhle-Miles & Bass, 2021). Furthermore, in countries like Australia, New Zealand, and India there is a huge English-speaking population and therefore making it easy for Peloton to expand into these regions. Since, Peloton has Spanish-Speaking instructors so expanding into Mexico could be a logical step for Peloton.
Increasing the Hardware Range
    There is a huge opportunity for Peloton to expand its range or hardware. They have been primarily working in the area of bikes and treadmills. Expanding their range of hardware to connected weight machines, connected rowing machines and many more could provide a range of choices to the customers and therefore helping Peloton to improve its revenue in the nearing future (Gazzola et al., 2020). Adding more hardware to the range of available products is necessary to improve the declining revenue of the business. Expanding into categories like strength building, floor and mediation can provide this fitness equipment manufacturer with more opportunities to revamp its declining revenue.
Expanding the Business through Acquisitions
    Acquiring more businesses like Precor can help Peloton expand into more locations. Also, acquiring more businesses like Precor can help Peloton get access over a large number of equipments. Companies like Precor have a better presence in hotel gyms and other fitness clubs and therefore making it easy for Peloton to improve its revenue. With the help of Precor, Peloton can reach out to a greater number of customers in fitness clubs, hotels, resorts, and spas. Also, Peloton can think of expansion through shared subscriptions with huge chains of gyms. Combination of Peloton’s technology with the
ick mortar locations apart from the customers home can significantly help to improve the declining revenue of the business.
Expanding Through Apparel
    It is extremely important for Peloton to focus on other range of its products such as apparels. Though Peloton apparels are available for purchase online and through certain stores, there is still a huge scope of acquiring the market through apparels. Apart from sportwear, peloton must think of its expansion through sport accessories. One of the major disappointments that the customers of Peloton have been facing is that most of the apparels are out of stock. Therefore, Peloton has to think about availability of its products. They have to improve their inventory to be a game changer in the market. It is evident that the instructors Peloton has is a driving force of the business and therefore, following the trend and designs of the instructors into the apparel range can help attract customers.
Becoming an Open Platform
    Cu
ently Peloton has been performing its operations through closed platform services. Becoming an open platform will allow a number of fitness trainers and instructors to provide their services through the Peloton platform. There are fitness influencers on a number of social media platforms, if Peloton will be an open platform, it can use their fan following as a method to improve its own revenue. Collaborating with public fitness figures could help Peloton to reach to a greater number of customers digitally and therefore helping the business to improve its revenue as well.
Advertisement
    Peloton must focus on commercials through various platforms, which can
ing the product and service range of Peloton into highlight. Peloton should work in coordination with influencers and other businesses active on social media platforms to air its advertisements whenever there is a
eak. Also, Peloton can think of airing its own advertisements during the
eaks of its training sessions. This would help Peloton to reach out to a greater number of customers (Mu
ay, 2020). The better the customer base, the larger are the chances of increased revenue and revival for Peloton. Also, Peloton must start making its presence being felt through billboards and other traditional methods of advertising such as through advertisements in fitness magazines and renowned newspapers. Peloton must also indulge into endorsements by hiring Instagram influencers and other fitness freak cele
ities, who could appeal...
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