Peloton`s Struggles: Can the Fitness Giant Regain its Mojo?

Case Code: BSTR691
Case Length: 14 Pages
Period: 2019-2024
Pub Date: 2025
Teaching Note: Available

Price: Rs.400
Organization : Peloton Interactive Inc.
Industry : -
Countries : United States
Themes: Turnaround Strategy, Brand Revival Organizational Crisis,Leadership and Change Management

Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

A Pandemic Winner

In 2019, Peloton was growing rapidly trying to reach fitness conscious customers in new markets. It had even entered the UK and Canada and was collaborating with the hospitality industry in the US to put its bikes in hotels for customers to experience them. In early 2020, the demand for Peloton’s bikes skyrocketed when the COVID-19 hit, triggering lockdowns and shuttering gyms. Peloton emerged far greater than a fitness equipment seller with a million fervent followers to whom its bikes and original streaming workouts became a way of life. Peloton aggressively hired new staff, developed innovative connected fitness products, and paid a premium to ensure bike deliveries..

Hard Fall

As the pandemic began to recede, a majority of people returned to gyms and fitness studios to experience offline fitness sessions. Peloton’s business took a hit. According to Jessica Fernandez, a diehard Peloton user, “I had a lot of friends who were very into Peloton during the pandemic, and then now they’re back in a gym or in-person class... They’ve sold off their bike and it just served a purpose for them at the time.”..

A Failed Turnaround

In February 2022, Peloton announced a comprehensive restructuring to reduce costs and drive growth. Foley said he took responsibility for what had happened at Peloton. “We’ve made missteps along the way. To meet market demand, we scaled our operations too rapidly. And we overinvested in certain areas of our business. We own this. I own this. And we’re holding ourselves accountable..

A New ERA Begins

On October 31, 2024, Peloton announced that Peter Stern (Stern), who had served as President of Ford Integrated Services (FIS) and had held leadership roles at Apple Inc. (Apple) and Time Warner Cable (TWC), was appointed as Peloton’s CEO and President effective January 1, 2025. The announcement was made along with Peloton’s first-quarter earnings report. While both Boone and Bruzzo stayed on Peloton’s board..

What lies ahead?

A host of challenges lay ahead for Stern which included reviving connected fitness product sales, achieving profitability, cutting down costs, reducing debt, retaining subscribers, rebuilding stakeholder confidence, fighting competition, enhancing after-sales service, and holding talent. According to Neil Saunders, MD of GlobalData PLC., a leading data and analytics company, “A lot of people who want Peloton equipment already have it and are not likely to upgrade anytime soon; the balance of the market is either not interested or needs a lot of persuasion to buy into Peloton..

Exhibits

Exhibit I: Peloton Products
Exhibit II: Peloton Membership Plans
Exhibit III: Peloton’s Revenue from Connected Fitness Products and Subscriptions
Exhibit IV: Peloton’s Financial Statement of Operations (2019-2024)
Exhibit V: Key Operational and Business Metrics
Exhibit VI: Peloton Stock Price Chart (2020 – 2024)

Buy this case study (Please select any one of the payment options)

Price: Rs.400

PayPal (9 USD)

Custom Search