WeightWatchers 2011 Annual Report Download - page 27

that our spring marketing campaign began in the second quarter of fiscal 2009 as opposed to beginning in the
first quarter as it did in fiscal 2008. The introduction of Monthly Pass in the meetings business has resulted in
less seasonality with regard to our meeting fee revenues because its revenues are amortized over the related
subscription period. While WeightWatchers.com experiences seasonality similar to the meetings business in
terms of new subscriber sign-ups, its revenue tends to be less seasonal because it amortizes subscription revenue
over the related subscription period.
Entrepreneurial Management
We run our company in an entrepreneurial manner that allows us to develop and test new ideas on a local
basis and then implement the most successful ideas across our network. In addition, many of our meeting
products were developed locally and then introduced successfully in other countries. Local managers have strong
incentives to adopt and implement the best practices of other regions and to continue to develop innovative new
services and products.
While having strong local leadership has always been a cornerstone of our strategy, we have also been
investing in building our global corporate management team. Our management team plays a critical role in
driving and facilitating the global coordination necessary to optimize our international assets and share best
practices across geographies.
Competition
The weight management market includes self-help weight management regimens and other self-help weight
management products and publications such as books, tapes and magazines; commercial weight management
programs; Internet weight management approaches; dietary supplements and meal replacement products; weight
management services administered by doctors, nutritionists and dieticians; surgical procedures; the
pharmaceutical industry; government agencies and non-profit groups that offer weight management services; and
fitness centers.
Competition among commercial weight management programs is largely based on program recognition and
reputation and the effectiveness, safety and price of the program. In the United States, we compete with several
other companies in the commercial weight management industry, although we believe that the businesses are not
comparable to us. For example, many of these competitors’ businesses are based on the sale of pre-packaged
meals and meal replacements. Our meetings use group support, education and behavior modification to help our
members change their eating habits, in conjunction with flexible food plans that allow members the freedom to
choose what they eat. There are no significant group education-based competitors in any of our major markets,
except in the United Kingdom. Even there, we believe we possess the largest share of the market.
We believe that food manufacturers that produce meal replacement products are not comparable
competition because these businesses’ meal replacement products do not engender behavior modification through
education in conjunction with a flexible, healthy food plan.
We also compete with various self-help diets, products and publications, such as low-carbohydrate diets
which gained popularity and media exposure beginning in 2003.
Trademarks, Patents and Other Proprietary Rights
We own numerous domestic and international trademarks, patents and other proprietary rights that are
valuable assets and are important to our business. Depending upon the jurisdiction, trademarks are valid as long
as they are used in the regular course of trade and/or their registrations are properly maintained. Patent protection
extends for varying periods according to the date of patent filing or grant and the legal term of patents in the
jurisdiction in which the patent is granted. The actual protection afforded by a patent may vary from country to
country depending upon the type of patent, the scope of its coverage and the availability of legal remedies in the
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