WeightWatchers 2012 Annual Report Download - page 25

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, services and publications, such as books, magazines and websites; commercial weight
management programs; Internet, mobile and other electronic 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 their 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 commercial weight
management 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
country. We believe the protection of our trademarks, copyrights, patents, domain names, trade dress and trade
secrets is important to our success. We aggressively protect our intellectual property rights by relying on a
combination of trademark, copyright, patent, trade dress and trade secret laws, and through the domain name
dispute resolution system.
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