Research by: Shamik Debnath, Sandeep Puri, Shalini Joshi, & Raul P. Rodriguez
Abstract
Alphabet Inc.’s Google LLC (Google) purchased Fitbit Inc. (Fitbit) in November 2019 for US$2.1 billion, marking its foray into health care, and by January 2021, the US Department of Justice was conducting a probe into the Google–Fitbit merger amid Fitbit users’ skepticism and distrust of the deal with regard to data privacy. Although Google’s senior vice-president of devices and services assured users that the intent of the deal was to “spur innovation in wearables” and not to sell personal information or use Fitbit’s health and wellness data for Google Ads, Fitbit users remained concerned regarding Google’s access to incredible amounts of personal data. While the acquisition would help Google address its hardware failures of the past, gain an edge in software through an instant foothold in the growing smartwatch market, and integrate Fitbit’s smartwatches more deeply with Android, the larger goal was more likely maximizing Fitbit’s business-to-business (B2B) partnerships with “health insurance companies and direct corporate wellness programming.” What strategies should Google use to leverage Fitbit’s hardware strengths, B2B partnerships, and technical expertise? What steps should Google take to assuage data privacy concerns to become a serious contender in the smartwatch and health care markets and to realize its goal of revolutionizing digital health care? Did Fitbit stand to benefit from the deal?
Learning Objective
This case is designed for use in graduate-level marketing courses on strategy and marketing, to allow learners to discuss companies’ strategic post-acquisition options. The case can also be used in a strategic management course or in a brand management course. The case examines the implications of Google’s acquisition of Fitbit and scrutinizes the wearable devices market, the market’s future outlook after the acquisition, and the consequent competitive shifts within the market. The case offers students an opportunity to apply different strategic tools to support their analysis of a post-acquisition road map for Google. Working through the case and assignment questions will allow students to do the following:
- Gain an understanding of the wearable devices market and the factors contributing to its existing position.
- Gain an understanding of the structure of the Google-Fitbit deal.
- Gain an understanding of the difference between brand creation and brand acquisition.
- Assess the implications of the deal for Google and Fitbit.
- Evaluate future growth strategies for Google and Fitbit.
- Gain an understanding of managing post-acquisition privacy and security issues.
Disciplines: General Management/Strategy; Marketing
To cite this case: Debnath, S., Puri, S., Joshi, S., & Rodriguez, R. P. (2021). Google: Targeting the Healthcare Market with Fitbit. Ivey ID: 9B21M075. London, Canada: Ivey Publishing.
To access this case: https://www.iveypublishing.ca/s/product/google-targeting-the-healthcare-market-with-fitbit/01t5c00000CwqhHAAR
