More Examples of Business Models Under Threat

Weight Watchers (weight management)
Introduction
Weight Watchers has been regularly disrupted so that it as to re-invent its business model. Disruptions have come from convenience food (1970s) though to obesity medications (2020s)
Initial business model (starting in the 1960s
It was based upon self-restraint around your eating habits, ie behavioural change was the only way to lose weight, ie
"...It was a long game, one fought with pre-portioned baby carrots and an accountant's worth of spreadsheets for meal- logging......the original Weight Watchers plan was strict, banning many process carbs and emphasising protein and fruit. Dieters measured out their food and were required to eat liver - the closest thing to a superfood at the time - at least once a week..."
Emma Court et al, 2023
Battling food for your whole life can be exhausting and generally the lost weight returns.
"...for years they have faithfully gathered, like about a million members, at Weight Watchers locations across the United States to conduct a weekly rites: step on the scales, share the latest wins, and woes, and swap tips on how to hack points or resist that happy hour margarita..."
Emma Court et al, 2023
Weight Watchers provided a sense of community.
Some challenges Weight Watchers has had to handle include
- Convenience food (starting in the 1970s)
To handle the popularity of convenience food, Weight Watchers changed and licenses its name for use on frozen meals and other products.
- Drug combinations (1990s)
Research found that drug combinations could help people lose weight medications like fen-phen (an amphetamine-like combination of fenfluramine and phentermine); it worked to suppress appetite. However, it was later linked to heart damage. Luckily for Weight Watchers it did not join this fad, despite initially losing membership and sales
- Point system (late 1990s)
This gave foods different numerical values based on calories, fibre and fat; it served as a simple way of tracking what people are eating; each dieter received budget points.
- Wellness makeover (from low-car to fat-free, etc)
For years Weight Watchers successfully surfed each wave of the diet culture from low-car to fat-free, working woman friendly recipes, weight loss camps, etc.
Weight Watchers use celebrities, like Oprah Winfrey,this to promote their products as healthy lifestyle approach, etc (including its flexibility).
The body positivity movement was a trend with a changing emphasis from the scale to overall health, ie
"... Eating like a caveman, meditating, sporting a Fitbit, swapping alcohol for green juice or turning to Goop for your medical ailments..."
Emma Court et al, 2023
Before the 2020s, Weight Watchers and replace the 'diet' word with 'healthy eating'; got rid of artificial sweeteners, colours and preservatives in its products; did not require members, setting weight goals; encouraged members to attend wellness workshops, rtc
"...In 2018, the company even temporarily scrapped the Weight Watchers name, truncating it to WW with a new slogan:'wellness that works'..."
Emma Court et al, 2023
Unfortunately wellness did not translate into increased sales.
- Digitalisation (social network)
Weight Watchers developed an app, updated with Headspace meditations plus used online groups so that members with common interests could connect.
The pandemic encouraged online activities that negatively impacted Weight Watchers; eg description-based slimming app, like Noom, siphon off customers from Weight Watchers. Noom used psychology to help dieters develop and keep healthy habits; this became popular during the pandemic when people were putting on the weight while snacking anxiously at home. Furthermore, hundreds of Weight Watchers locations were lying idle during the pandemic.
More recently, telemedicine start-ups are acting as
"...Digital matchmakers between patients eager to take weight-loss meds and clinicians who can prescribe them..."
Emma Court et al, 2023
Weight Watchers was more than a brand for middle age dieters - it was a social network that could become a tech company. During the pandemic
"...more than 80% of its subscribers opted to pay only for digital access..."
Emma Court et al, 2023
The use of TokTok, WhatsApp, etc is replacing the Weight Watchers regular meeting and providing a community of people with common interests, ie weight-loss-drug-users, etc
NB In 2022, Weight Watchers has around 3.5 million online and in person members; there are around 20 million lapsed customers; with a shift to online, it has reduced it's rented facilities from about 3,000 locations before the pandemic to 800.
- Obesity medications (middleman)
In March 2023, Weight Watchers paid $US 132 m to acquire Sequence
"...a two-year-old telemedicine start up that prescribes a new much-hype set of medications called GLP-Is that can basically melt the kilos is away. The drugs, which go by Wegovy, Ozempic......have come to be regarded in the past year as a magic weight loss solution..."
Emma Court et al, 2023
These GLP-Is mimic a naturally occurring appetites suppressant which
"...activates pathways in the brain that make you want to put down the fork even if there's still have food on your plate. The cravings just disappear, along with the kilos..."
Emma Court et al, 2023
These medications are winning US Food and Drug Administration's approval; with minimal side-effects and usage for around 2 decades for other health issues, like diabetes, without any safety concerns.
As a result the traditional companies, like Weight Watchers, Jenny Craig, etc were not performing well, ie debt levels rising, as their members flock to these new medications; they needed to change direction to survive.
It has been predicted that these drugs will be worth around $100 million by 2032 (source: Jefferies Financial Group as quoted by Emma Court et al, 2023). Currently, drug companies are struggling to keep up with the demand for these drugs.
Weight Watchers had decided to be an active participant in obesity medications. However, within Weight Watchers there are some reservations, ie
"...switching to medications feels like a quick fix shift in their philosophy.....the illusion of a venerable brand that turned into a perscription factory with perks..."
Emma Court et al, 2023.
In addition to being a member of Weight Watchers/Sequence, there are conditions for the use of these medications, like a body mass index of 30 or higher, etc; members will receive behavioural services to help in managing side-effects and rebuilding strength, ie as weight drops, fat, muscle, etc inevitably disappear, too.
Weight Watchers can help with health insurance by providing less expensive medications that are covered by insurance plus advice on how to handle insurance companies.
- Commoditisation
 One of the next challenges is to handle the commoditisation of these medicines, ie
"...leaping from medical intervention to cosmetic elective..."
Emma Court et al, 2023
As these drugs become commoditised it can be a race to the bottom competing on price, access and marketing.
Weight Watchers will need to find a way to differentiate itself so that able to charge a premium.
Summary
Weight Watchers has continually needed to reinvent itself, ie change its business model, to remain relevant. This included focusing on challenges around behavioural changes, convenience foods, drug combinations, point system, wellness, digitalisation, obesity medication, commoditisation, etc.