PELOTON: EXERCISING STRATEGIC THINKING FOR A NEW BUSINESS MODEL WRITTEN BY Aine Doris THE BIG IDEA Launched with Kickstarter funding in 2012, Peloton Interactive Inc. is an exercise equipment and media company that has successfully disrupted the home fitness space in the U.S. In just seven years, the company grew exponentially, reaching a value of $4 billion by spring 2019. Peloton’s success was driven by the vision of co-founder and CEO John Foley, who spotted an opportunity to bring a customized, boutique exercise experience into users’ homes. Instead of meeting schedules of studio-based spinning classes with rigid timetables, Peloton customers could purchase a stationary exercise bike and pay a monthly subscription to access sessions remotely via livestream or on-demand through a library containing thousands of pre-recorded classes at Peloton studios in New York and hosted by fitness instructors with minor-celebrity status. Between 2012 and 2019, the company’s organic growth was fueled by a unique admixture of key factors: a highly flexible and rewarding fitness experience built around interactive technology, the star power of iconic instructors who were social media influencers, a sense of competition between users based on individuals’ personal progress, and a vibrant online community of engaged and motivated customer brand ambassadors. In 2017, Peloton expanded to treadmills and continued to expand its offerings, from yoga to weight training. In late August of 2019, Peloton filed for an initial public offering, listing itself as a technology, media, software, product, experience, fitness, design, retail, apparel, logistics company — but above all as a “social connection company that enables our community to support one another.” In preparing for the IPO, however, it was not obvious how Peloton could resolve the complexity of this business model. Customers’ connection to the brand was through the instructors, and relationships hinged on the dispersed community Peloton created. There was no single voice for the company. How could a business built on a social community pivot to a position in the public marketplace? THE SCENARIO Finding a corporate voice was not the only challenge facing Peloton, though. The company’s first television advertising campaign was considered sexist, causing widespread customer backlash. Meanwhile, the company’s success in disrupting the market had opened the doors to other newcomers ready to compete in the at-home fitness space. But perhaps the most acute difficulty that Peloton had to navigate was the market situation. Opening at $27 per share — below its IPO pricing of $29 per share — the offering raised $1.16 billion and initially valued the company at $8.1 billion. However, following its market debut, shares tumbled by 11 percent, bringing its market value down to $7.2 billion and making it the second worst debut for a unicorn startup of the year.
Peloton’s IPO woes might, at least in part, be attributed to poor timing. Foley listed the company in August 2019, with the IPO market cooling amid fears of a global economic recession. Its poor performance coincided with investors taking substantial losses on a high number of under-performing IPOs, which included ride-hailing behemoth Uber. At the same time, the company’s communication voice remained unclear. Peloton’s core strength lay in its engaged digital community of loyal brand ambassadors. But the success of that community also lay in its dispersion: Different groups congregated on multiple digital platforms to chat about everything from “personal bests” to class playlists. How could it create a single corporate voice that aligned with its complex business model? THE RESOLUTION Foley and his team had successfully carved out a new and multifaceted offering that defied definition in terms of a single business model. Rationalizing the company’s activities into a single concept that played to Peloton’s core strength in community building, CEO Foley described the company succinctly in a 2019 letter to investors: Peloton, he told them, sells happiness.Most importantly, it had also successfully integrated the idea of community into the design of the Peloton experience With the connected fitness market predicted to grow to a multibillion opportunity in coming years, and Peloton looking at revenue in excess of $5 billion by 2024, the company’s stock prices began to rally. By early 2020, market analysts were designating Peloton a “recommended buy.” THE LESSON In eschewing the conventional and opting for a broader business model, Peloton remained authentic to the complex and evolving community it had created. Peloton’s success in reinventing the space hinged on three core factors: 1. Spotting the opportunity: Foley’s own busy schedule and personal habits didn’t allow him the flexibility to book the best instructors at the best boutique studios at the perfect times. This led him to consider how he might create that same intense and motivational experience with more flexibility. He needed to deliver the equivalent quality of engaging content in a new way that didn’t require him to be across town at exactly 6 a.m. Foley successfully translated a real-world personal need into a new entrepreneurial idea, creating a new lifestyle category of fitness. 2. Understanding the value of community voice: Built into the design of the Peloton experience are user interaction, gamification and instructor feedback. Users are prompted to share achievements online, join social media affinity groups ranging from LGBTQ Ally Group to the Peloton Moms Book Club, and follow star instructors online. Peloton relies upon customers’ connection to their communities to encourage engagement frequency, which retains customers and pleases Wall Street. 3. Grasping the enabling power of technology: Technology is woven into every element of the Peloton experience, from the recording and streaming of classes, to the touch-screen stationary cycles to interaction between active users and instructors to the capacity to share experience seamlessly via social media. Technology not only drives engagement, but also locks in customers.

Paper Assignments
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.