Peloton, the famous exercise bike brand, may seem to be facing no issues at all, which does not correspond to the reality. First, the company is experiencing a substantial increase in losses that concerns potential investors (Butler, 2019). The great plans, which Peloton has nevertheless, allow assuming that strategic planning in the company is long-range, hence hardly flexible. Camillus (2008) highlights that many businesses do not consider the complexity of the environment in which they perform. Therefore, Peloton’s strategy apparently needs reframing that would allow for better adaptability.
Another concern is the limited trading history of the company that may discourage investors as well. Notably, it sells the vast majority of its bikes and treadmills in the USA, notwithstanding its presence in the UK and Canada (Butler, 2019). Presumably, Peloton is not sufficiently competitive in foreign markets, which also marks poor strategic planning (Hambrick & Fredrickson, 2005). In particular, an effective strategy does not purely need to specify where a business will operate, but also explain how it expects to enter the market successfully.
In addition, the corporation under review apparently lacks a clear mission statement. This formulation has to provide a basis for designing a strategic plan through prioritizing of short-term objectives and tasks (Ward, 2020). Meanwhile, Peloton presents itself as a business that “sells happiness,” which vision is apparently far too general (Butler, 2019, para. 7). The insufficient clarity of the fundamental purpose results predictably in a vague strategy.
Considering all of the above, it would have been more reasonable of Peloton to apply different methods of strategic development. In similar cases, it is critical to formulate realistic objectives and analyze the key results on a regular basis, preferably, with OKR planning tool (Conrad, 2020). In addition, it is relevant to compare the metrics to those of the main rivals and/or the industry average in order to improve competitiveness, for which benchmarking allows (Spacey, 2015). A combination of these two techniques would probably have been more effective as compared to the strategy that Peloton currently has.
Reference List
Butler, S. (2019) ‘Exercise bike firm Peloton to float with potential value of $8bn’, The Guardian. Web.
Camillus, C. J. (2008) Strategy as a wicked problem. Web.
Conrad, A. (2020) 4 strategic planning tools and models for 2021 and beyond. Web.
Hambrick, D. & Fredrickson, J. (2005) ‘Are you sure you have a strategy?’ Academy of Management Review Executive, 19(4), pp. 51-62. Web.
Spacey, J. (2015) 24 strategic planning techniques. Web.
Ward, S. (2020) What is a mission statement? Web.