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Wearable Technology And The Baby Boomer Case Solution

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This case is based on the portable devices of wearable variety. These devices include many things: Glasses, jewellery, watches and other such accessories are all items that can be worn or inserted by people. As presented within the case, this trend of introducing such wearable products in the combination with technological features is becoming quite common. Many companies, like Apple and Google, are now offering multitude of such products within their total brand portfolio. In fact, researchers predict that the market for such devices is expected to grow significantly by 2016. Although this number does not seem to be that huge there is potential because the year on year increase between 2013 and 2016 is quite substantial. However, it remains to be seen how well all these products can succeed and will there be a need for them in the long run or will it fizzle out soon is something that is yet to be discovered. 

With the changing market trends, Microsoft recently also launched its brand of wearable fitness device priced at £125. Moreover, Microsoft as a brand is synonymous with quality and high credibility. This entails possible success for the company (Microsoft, 2014). The case reports that this particular product is just part of a bigger plan where the company is expected to introduce a whole range of such products and capture market share away from competition. 

The report will not only include descriptive, but also quantitative data that has been generated to understand this new product launch. It also will attempt to identify the basic marketing and financial details that are needed to analyze such a process.

Following questions are answered in this case study solution

  1. Introduction

  2. The Growth of Wearable Technology Market 

  3. Assumptions Needed to Analyze the Case

  4. Making a Case for the Launch of Xeta 2020’s Product

  5. Financial Feasibility

  6. Conclusion


Case Analysis for Wearable Technology And The Baby Boomer

Launch of Xeta 2020’s New Product

This report will attempt to analyze the launch of another such product by the name of Xeta 2020. The report will try to identify whether this step will be successful for the company or is this not a wise decision for them, in the longer run. The good thing about this step is that there is a growing trend within this market where more and more consumers are opting towards such products. The case does not present the total scenario in detail, therefore, to analyze it properly some additional help will be taken from available sources to generate assumptions and finalize the business case analysis.

The product is a fully-featured fitness tracker that also monitors sleep patterns, resting pulse rate and stress levels. The product is targeted towards the older generation which is referred to as the baby boomers (aged between 50 and 64). 

2. The Growth of Wearable Technology Market

Although the case presents some facts about the emerging trend of companies launching newer and more diverse range of products in the smart gadgets category all over the world, there is still a need to discuss these things in further detail. This will also help in building up a stronger case for the launch of Xeta 2020. 

Like several other products, the Smartphone’s category emerged not a long time back. However, if the comparison is made between Smartphone’s and wearable gadgets market, it can easily be observed that this new segment has only recently shown significant promise. Moreover, most consumers living in developing or under-developed countries are not aware of this phenomenon as it has only penetrated the first world countries in the proper manner. This means that there is immense potential for future participants to come and take advantage of this situation.

There is a vast variety of different devices available in the wearable technology segment. For instance, Google Glass is a very complex multifunction system gadget whereas others are simpler in their structure. Moreover, with the passage of time people from various fields of research and product development have been able to design these products that range from being simple connectivity devices to serving specific functions like consulting a tutor for distant learning (Educause, 2013). 

Wearable technology is also referred to by researchers as “Smart Textile”. The basic concept is that these products are smart enough to respond to the changes in the external environment with the help of several sensors fitted within the gadgets. For instance, a thermal sensor tells the wearer of the watch or device, his or her body temperature very easily. Similarly, there are sensors that can be fitted that tell the user what are his or her sugar levels, heart rate and blood pressure (Berglin, 2013). These features help the companies market such products to health conscious customers.  

Although there are several benefits and advantages that can be easily associated with the usage of such devices, the most important advantage is that these products can provide their users a means of improving their overall productivity and efficiency. These products have the capacity to not only helps their users increase their overall efficiency, but their proper usage can also help them to boost their intelligence, confidence, health, fitness and even their love lives (Rackspace, 2013). Therefore, an overall increase in human efficiency is expected after these products are used in a sensible manner.

All this information is not presented here to suggest that these products are completely defect free. This is never the case and as with most things, there are several issues that also come in addition to their usage. The most significant problem with these gadgets is that there are lots of issues that arise in relation to privacy, security and informed consent. Moreover, some of these devices can heat up while in use that may lead to discomfort for the user. Another problem is that most users are only going to wear a device that appears fashionable and trendy whereas most of these devices are designed for performing specific tasks. Therefore, developers have to put extra effort to create a balance between everything (Educause, 2013).   

Is the Market Substantial Enough to Take Risks? 

One problem with this particular market segment is the lack of research and raw nature of data available. As most of these devices have only recently started to become a little more main-stream there, is either insufficient or unreliable data that may mislead the potential new entrants towards capturing this new market. The competition is just recently waking up to this new development in the market. Some people think the market is not that significant and this new trend may actually not be substantial enough to invest in product development because there are chances that it may fizzle out or just stay as a very small niche market (Credit Suisse, 2013). Another reason why people are unable to identify whether this new market is substantial enough or not is due to the presence of conflicting numbers within the available research. Some researchers cite a higher number of 19 billion $ market value whereas others present a more modest number of total customers and their expected revenue generated. This confusion has led to authors and researchers arguing amongst each other because nothing has been clarified, and the topic is still up for further research and study. 

For a new company, like Xeta 2020, the most appropriate thing now would be to invest a significant amount in research and development of the product. This means that the company must first identify and officially establish its numbers that can support significant investment in this new market. Unless the proper homework is done to support this new market and product introduction, there are always chances that the company may introduce something that is not really needed or has already been provided by competing brands at better rates (O' Connor, 2013). 

Another aspect of this problem is that some organizations might be more willing to allow new competition to come into the market whereas others would prefer that very few players must stay and dominate the overall market on the entire platform. It is then necessary for a company like Xeta 2020, to be cautious and not take any steps that can affect a relationship that may already exist between existent players and their suppliers. They can even take a little help from the competition and try to utilize the data that a company like Apple and Google may share with them on a mutual consent basis. This will not only help them establish a camaraderie with the competing players but it will also help the company in making sure that they can learn from the mistakes of these big giants and not repeat them at the time of their product launch into the market (Ferrari & Goethals, 2010).      

3. Assumptions Needed to Analyze the Case  

As mentioned earlier, there are several gray areas within this case. The most basic is the discussion with regards to the sales figure and the selling price which must be chosen by the new brand to launch their product into the market.

In order to take things from a holistic perspective, the report will utilize data available from different publications to handle these limitations and design several key assumptions before attempting to make a business case for the product launch in detail.  

Some of the major assumptions that must be mentioned here include the following: 

  • One thing, that must be kept very clear in the mind, is that consumers want to spend a higher amount of money for products that are strong brands and have established a history in the market. For instance, those consumers, who are looking for luxury goods, opt for expensive brands because they feel that these brand names give them a sense of status and privilege lifestyle perception. Therefore, most of these consumers are likely to stay away from low quality and cheap products and would not want to be associated with something that affects their status and image in the society (Kotler, 2000). 

  • As far as pricing the product is concerned there is a need to look at comparable products in the market to formulate a specific opinion. In this case we can look at the market price of the new product released by Microsoft at £125 whereas the technology giant Apple has launched similar products at a much higher price range of £180 - £220 (Mayne, 2014). Given this situation, the price of Xeta 2020 cannot be too high or too low than these competing brands. The wise thing will be to price the product at a round figure of £100 which gives buyers the comfort of enjoying a product that is slightly more affordable than the Microsoft and Apple gadgets and it also does not position the product as a very cheaper and low quality item. Furthermore, it does not make sense for the new product to be priced at a higher rate of £150 because most consumers would rather want to purchase a far more established brand at these high rates than go for a new and un-established brand name.    

  • The case also points out that there is a difference between the opinions of the two directors regarding the possible sales figures. It is then only possible to again use other publications and infer from them a possible case where some conclusion can be achieved. The penetration of technological devices can be judged from the fact that a simple feature, like Bluetooth, has a current user base of 300 million and it is expected to improve to 3 billion users by the year 2018 (Griffith Sciences, 2014). This roughly comes out to be a 200% year on year increase over the four years period. This is a very astounding incremental figure, but that is due to the reason that Bluetooth technology is itself present in so many gadgets these days.

  • To translate this into a year on year increase for smart wearable devices, there is a possibility that this figure can be broken down by the market share present with the wearable devices market segment. By rough estimates, more than 50% of these items can be worn in some manner whether they are watches or glasses or even headsets. This means that if not by 200% then the yearly sales of these products must at least increase by 100% every year. This means that if there are 2000 units sold in year 1 then it will translate into a 4000 units sold in year 2, 8000 units sold in year 3, 16000 units sold in year 4 and eventually reach 32000 units in year 5.       

4. Making a Case for the Launch of Xeta 2020’s Product

There are two sides to making the case for this sort of product launch in the UK market. The first one is geared towards brand building, and the other one is geared towards generating the right amount of sales to breakeven and make profits for the company.

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