Technological Innovation and the Fitness & Wellness Industry:
Predicting the Impact
Bryan K. O’Rourke, MBA
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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
before we start a word from seth myers
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Thanks Technology
Seth Myers
broad
4
Key Trends
Biz Models
Innovation
Predictions:Consumers &
Facilities
“change is the process by which
the future invades our lives”
Alvin Toffler
think different
No Crystal Ball
Different
revolutionconvergence & divergence
<3>
demography
globalism
technology
key technology
trends
1st
how will it impact our lives & industry ?
technology - what has it &
Technology: etymology greek - meaning skillful application of an art. The practical application of science in commerce or industry.
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Technology: the pace of change is not linear its exponential. Adoption rate is increasing similarly.
Gordon MooreCo-Founder of IntelNumber of transistors on a chipwill double every two years. “Moore’s Law”
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Law of accelerating returns . We are just seeing the start - “knee of the curve”
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
1,2,3,4,5,6,7,8,9,10.......
2, 4, 16, 256............
Internet: The free exchange of information with limited constraints.
-Commercial Internet began only 5,300 days ago-Serves over 1.5 Billion people-79% of US adult population-40% of US consumers usesearch engines for comparativeshopping
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
The “Grid” Becoming Increasingly Integrated
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Devices - getting smaller and more powerful.
The ability to increasingly and more easily integrate technology into daily life is upon us.
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
15 Billion by 2015
Mobility: Communication & information when ever and where ever the customer wants it.
Mobile Internet Access:Pew - 56% of US AdultsIncrease of 73% in 17 months
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Mobile speeds will increase ...........
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Internet will become more intelligent ...........
Web 3.0the “Semantic” Web
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Cloud Computing: Low cost ubiquitous storage and application deployment !
Outsourced Service PlatformsSalesforce.com
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
explosion of interactive tools & platforms
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Merger of
Physical &Digital
emotiv
natal
key trends
digital reality
intelligence
connectivity
miniaturization
web 2.0 & 3.0
cloud computing
low cost
new products &services
2
Biz Models
VALUEPROPOSITION
COSTSTRUCTURE
CUSTOMERRELATIONSHIPS
CUSTOMERSEGMENTS
ACTIVITYCONFIGURATION
CORECAPABILITIES
PARTNERNETWORK
REVENUESTREAMS
DISTRIBUTIONCHANNELS
business model
INDUSTRYSUPPLIER
DEMANDCUSTOMER
"companies that expect a glorious
past to shield them from the
forces of change driven by advancing technology will fail."
- Rupert Murdoch
0
75.0
150.0
225.0
300.0
2021 40
206
Fitness FacilitiesVideo Games
OTC DietRetail Pharma
2009 U.S. Revenues(in billions $)
1%
99%
Fitness Facilities Health Care
2009 U.S. Market(US health care $2.6 trillion)
17%
U.S. Fitness Facility Marketstatistics from www.cmeto.com
46%
Market Evolution
“Membership” ModelPricing Has Declined
Low Price & Limited Features High Price & Full Features
PRIZM
Consumers
66 Groups
IHRSA 2009 comparative US industry data
7 groups account for 75% of US club members
Income / Price is a KEY Barrier
"It may be fatal to assume that minor adjustments to current business models will keep the fitness industry abreast of changing times."
http://futureoffitnesswhitepaper.ning.com/
DemandIndustry Convergence
clothing
supply side
Li & Fung Group
movie theaters
arcades
record stores
Economics of Free
VALUEPROPOSITION
COSTSTRUCTURE
CUSTOMERRELATIONSHIPS
CUSTOMERSEGMENTS
ACTIVITYCONFIGURATION
CORECAPABILITIES
PARTNERNETWORK
REVENUESTREAMS
DISTRIBUTIONCHANNELS
business model - new models needed
INDUSTRY SUPPLIER
DEMANDCUSTOMERdigital technologies
3
Innovation
“those who cannot change
their minds cannot change
anything”
George Bernard Shaw
How OrganizationsCreate Value
VALUEPROPOSITION
COSTSTRUCTURE
CUSTOMERRELATIONSHIPS
CUSTOMERSEGMENTS
ACTIVITYCONFIGURATION
CORECAPABILITIES
PARTNERNETWORK
REVENUESTREAMS
DISTRIBUTIONCHANNELS
business model - what is technology doing ?
INDUSTRYSUPPLIER
DEMAND - CUSTOMER
+
_
sustaining
disruptive
consumercentric
EmpoweredConsumers
It’s all about the
“You”
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Product - Build fences, own it all
Price - Competition, supply - demand
Place - Physical distribution
Promotion - Sell, sell, sell
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
....Legacy of the Industrial Revolution
To Deliver Value Organizations Used To ......
Product = Experience, Co-Created
Price = New Value Exchanges
Place = Marriage of Digital & Physical 24/7
Promotion = Conversation or Engagement
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
To Deliver Value Organizations Must Now......
.... A New Way of Doing Things
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
C.K. Prahalad
“To successfully compete companies must reinvent their process & culture in order to sustain innovative solutions.”
“World’s Most Influential Management Thinker”-Times of London 2007
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
N = 1
R = G
orchestration
Innovation = Value Creation
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
U’s Together =
CommunityCentric
customer focus
social media = new business models
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
To Innovate:
Change How Organizations Work
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
New Methods, Roles & Models to Compete
Integral Part of Organizational Capability
4
What’s Aheadpredictions
1. non-facilitycompetition will surge
Merger of Technologies Including Social MediaWill Create New Low Price Alternatives
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Nike Running
OutsideIndustry Convergence
2. successful facility competitors will deliver
new models
Product = Experience, Co-Created
Price = New Value Exchanges
Place = Marriage of Digital & Physical 24/7
Promotion = Conversation or Engagement
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
.... A New Way of Doing Things
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Hi-Tech Hi-Touch
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Financial ServicesIndustry
Measure is not# of Bank Branches
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
24/7 Service & Support
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Adoption of Social Media Best Practices
3. “wellness” will increasingly emerge
The Crisis...23% of Americans participate in no physical activity
62% of Americans obese or overweight -18% rise in last decade.
23% of Americans still smoke. 3000 start each day.
78% of men eat vegetables less than three times per day.
75% - 90% of visits to Primary Care Physicians are for stress.
THE COST IS BANKRUPTING OUR NATION
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Head - Traditional Fitness Industry
Long Tail - New Wellness Space
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact
Finally
“The greatest obstacle to
progress is not ignorance. It’s the Illusion of knowledge. “
-Daniel Boorstin
"Of the ten leading vacuum tube companies, none participated in the transistor revolution".
–Chet Raymo
is up to us......
think different
Technological Innovation and the Fitness & Wellness Industry:
Predicting the Impact
THANK YOU