Schwinn Cardio Product Line Case
Study
Jake Petersen, Director NPD, Nautilus

1
Background
March, 2012:


Directors of PD and PM attend an MVI Workshop

May, 2012:


Director of PD attends the first M...
150 Upright Stationary Exercise Bike






Fully Adjustable
Perimeter weighted flywheel
Quiet magnetic ECB resistance ...
Project Definition
Objectives
 Increase market share of retail Schwinn Cardio
Product Line


What will it take to win in...
Project Definition
Deliverables
 “To Be” value curve from the perspective of the
most important customer (MIC)


Element...
Project Definition
Project Kick-off: 6/5/12

Round 1 Interviews: 6/19/12
Round 2 Interviews: 6/26/12
Round 3 Interviews: 7...
Value Chain
Amazon

Sporting Goods
Store

Consumer

Consumer

Copyright, Value Innovations, Inc 2004-2014 All rights reserved

Consume...
3 Questions to identify the
Most Important Customer
1. Who has to fix the problem?
2. Who loses financially?
3. Who sees t...
The 3 Question Template
Who has to fix
the problem?

Who stands to
lose
financially?

X

Amazon
Sporting Goods
Company

X
...
Amazon

Consumer



Sporting Goods
Store
Consumer

Consumer

Up until March, 2012 Nautilus talked exclusively to Buyers
...
Value Curves
“As Is”

Copyright, Value Innovations, Inc 2004-2014 All rights reserved

13
Ca rd io Co nso les
N autilus FIN AL
1

Value to Hom e User

Low

# Prog ram s

20

H ig h

20+

# Prog ram s

2

Ip od

N...
Contextual Interviews
Contextual Interview Details
 Seven interviews conducted over a five day
period for rounds 1, 2, and 3
 Two participants...
Contextual Interview Details
 Used Webex for round 3 interviews so that
participants could see the concepts presented
 I...
The New Products
“To Be”

Copyright, Value Innovations, Inc 2004-2014 All rights reserved

19
Copyright, Value Innovations, Inc 2004-2014 All rights reserved

20
Ca rd io Co nso les
N autilus FIN AL
1

Value to Hom e User

Low

# Prog ram s

20

H ig h

20+

# Prog ram s

2

Ip od

N...
Primary Upgrade: Over-sized console with
26 total programs including a second display
Additional Upgrades for the User:

...
1’ 33” Video
http://www.amazon.com/Schwinn100336-170-UprightBike/dp/B00D4LEEYA/ref=sr_1_1
?s=sportinggoods&ie=UTF8&qid=138...
The New Products

Copyright Value Innovations, 2004-2013 All rights reserved

24
What’s Happened?
September, 2013 - Introduced:
 3 Upright Bikes
 A recumbent bike
 An elliptical

October, 2013
 User ...
What’s Changed?
Nautilus:
Now doing face-to-face interviews
Use Value Curves on all projects even if the
project is not go...
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Revitalizing a product line using the Value Innovation Process

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In mid 2012, Nautilus (manufactures and markets exercise equipment) was seeing sales of its Schwinn Upright Bikes decline. A 6 person team was tasked with turning this around. Instead of continuing to interface with buyers at Dick's Sporting Goods and Sports Authority the team focused on their Most Important Customer, the consumer. As a result of uncovering the consumer's unmet needs, the team was able to make some key changes to their Upright Bikes. Three new versions of the A10, 170 and 130 Bikes were introduced in September, 2013 and sales are already up 2X. See what the team did, what they found out and what changes they made.

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Revitalizing a product line using the Value Innovation Process

  1. 1. Schwinn Cardio Product Line Case Study Jake Petersen, Director NPD, Nautilus 1
  2. 2. Background March, 2012:  Directors of PD and PM attend an MVI Workshop May, 2012:  Director of PD attends the first MCI Workshop June, 2012:  Sales of Schwinn Upright Bikes are declining  Decision made to set up a project and use the VIP Copyright Value Innovations, 2004-2013 All rights reserved 2
  3. 3. 150 Upright Stationary Exercise Bike     Fully Adjustable Perimeter weighted flywheel Quiet magnetic ECB resistance system 16 resistance levels Two other models: 170 and A10 Copyright, Value Innovations, Inc 2004-2014 All rights reserved 3
  4. 4. Project Definition Objectives  Increase market share of retail Schwinn Cardio Product Line  What will it take to win in this highly competitive market?  Primary focus on consoles  Introduce the Value Innovation Process® to Nautilus  Uncover customer insights that can be leveraged on other products Copyright Value Innovations, 2004-2013 All rights reserved 4
  5. 5. Project Definition Deliverables  “To Be” value curve from the perspective of the most important customer (MIC)  Elements ranked & compared to “Best in Class”  Plan for “HOW” to deliver on “To Be” value curve elements Copyright Value Innovations, 2004-2013 All rights reserved 5
  6. 6. Project Definition Project Kick-off: 6/5/12 Round 1 Interviews: 6/19/12 Round 2 Interviews: 6/26/12 Round 3 Interviews: 7/17/12 Recommendations: 7/27/12 RKL Note: VIP cycle time, 7 weeks!! Copyright Value Innovations, 2004-2013 All rights reserved 6
  7. 7. Value Chain
  8. 8. Amazon Sporting Goods Store Consumer Consumer Copyright, Value Innovations, Inc 2004-2014 All rights reserved Consumer 8
  9. 9. 3 Questions to identify the Most Important Customer 1. Who has to fix the problem? 2. Who loses financially? 3. Who sees the Value? Copyright, Value Innovations, Inc 2004-2014 All rights reserved 9
  10. 10. The 3 Question Template Who has to fix the problem? Who stands to lose financially? X Amazon Sporting Goods Company X X X Dept Merchandiser Buyer User/Consumer Who sees the Value? X X XXX X X Copyright, Value Innovations, Inc 2004-2014 All rights reserved 10
  11. 11. Amazon Consumer   Sporting Goods Store Consumer Consumer Up until March, 2012 Nautilus talked exclusively to Buyers In June, 2012 Nautilus determined Users/Consumers were the Most Important Customers Copyright, Value Innovations, Inc 2004-2014 All rights reserved 11
  12. 12. Value Curves
  13. 13. “As Is” Copyright, Value Innovations, Inc 2004-2014 All rights reserved 13
  14. 14. Ca rd io Co nso les N autilus FIN AL 1 Value to Hom e User Low # Prog ram s 20 H ig h 20+ # Prog ram s 2 Ip od No Data N o = 0, To Sp eak ers = 2.5, D ata = 5 3 Sp eakers No Prem N o = 0, Yes = 5, Prem ium = 7.5 4 Connec tivity N o = 0, USB = 5, W ireless = 10 5 Fan Yes Prem N o = 0, Yes = 5, Prem ium = 7.5 6 Console Looks 6 8 1- 10 Sub jec tive 7 Sc reen Size Small Med/Lrg Sm all = 2.5, M ed = 5, Larg e = 7.5 8 Interfac e 1- 10 Sub jec tive 9 Trac king No Yes N o = 0, Yes = 5, Prem ium = 7.5 10 Read ing Rac k 1- 10 Sub jec tive 11 Brand 7 11 N LS Survey PM '11 Unaid ed % 0.0 Schwinn 840 Best in Class 2.8 5.5 8.3 ##
  15. 15. Contextual Interviews
  16. 16. Contextual Interview Details  Seven interviews conducted over a five day period for rounds 1, 2, and 3  Two participants were paired in each interview  Participants were located across the United States, owned a piece of cardio equipment, and worked out consistently at home  Interviews were conducted via the phone for rounds 1 and 2  Round 1 interviews were recorded and transcribed Copyright, Value Innovations, Inc 2004-2014 All rights reserved 16
  17. 17. Contextual Interview Details  Used Webex for round 3 interviews so that participants could see the concepts presented  Interview questions were sent out 2 to 3 days ahead of time  Participants were given a $100 gift card after the third interview Copyright, Value Innovations, Inc 2004-2014 All rights reserved 17
  18. 18. The New Products
  19. 19. “To Be” Copyright, Value Innovations, Inc 2004-2014 All rights reserved 19
  20. 20. Copyright, Value Innovations, Inc 2004-2014 All rights reserved 20
  21. 21. Ca rd io Co nso les N autilus FIN AL 1 Value to Hom e User Low # Prog ram s 20 H ig h 20+ # Prog ram s 2 Ip od No Speakers Data N o = 0, To Sp eak ers = 2.5, D ata = 5 3 Sp eakers No Prem N o = 0, Yes = 5, Prem ium = 7.5 4 Connec tivity N o = 0, USB = 5, W ireless = 10 5 Fan Yes Prem N o = 0, Yes = 5, Prem ium = 7.5 6 Console Looks 6 8 9 1- 10 Sub jec tive 7 Sc reen Size Small Med/Lrg Lrg Sm all = 2.5, M ed = 5, Larg e = 7.5 8 Interfac e 1- 10 Sub jec tive 9 Trac king No Yes N o = 0, Yes = 5, Prem ium = 7.5 10 Read ing Rac k 1- 10 Sub jec tive 11 Brand 7 11 N LS Survey PM '11 Unaid ed % 0.0 Schwinn 840 To Be 2.8 5.5 8.3 ## Best in Class Copyright Value Innovations, 2004-2013 All rights reserved 21
  22. 22. Primary Upgrade: Over-sized console with 26 total programs including a second display Additional Upgrades for the User:          Second console display MP3 music input port Speakers Console fan Water bottle holder Transport wheels Extra-wide seat Oversized pedals with toe straps Comprehensive warranty coverage Copyright, Value Innovations, Inc 2004-2014 All rights reserved 22
  23. 23. 1’ 33” Video http://www.amazon.com/Schwinn100336-170-UprightBike/dp/B00D4LEEYA/ref=sr_1_1 ?s=sportinggoods&ie=UTF8&qid=138429718 8&sr=11&keywords=schwinn+170+uprig ht+bike Copyright, Value Innovations, Inc 2004-2014 All rights reserved 23
  24. 24. The New Products Copyright Value Innovations, 2004-2013 All rights reserved 24
  25. 25. What’s Happened? September, 2013 - Introduced:  3 Upright Bikes  A recumbent bike  An elliptical October, 2013  User feedback from Amazon..very positive  150 suggested retail price, $499. Offered at $299  Sales up dramatically Copyright Value Innovations, 2004-2013 All rights reserved 25
  26. 26. What’s Changed? Nautilus: Now doing face-to-face interviews Use Value Curves on all projects even if the project is not going through the VIP Copyright Value Innovations, 2004-2013 All rights reserved 26
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