One of the best ways to develop a picture of any company is with the SWOT analysis -- a look at a company's strengths, weaknesses, opportunities, and threats. Today I'd like to focus on Weight Watchers (NYSE: WTW), the weight-management-services mid-cap.

Strengths

  • Brand: Weight Watchers is far and away the biggest name in the weight-loss business, raking in close to $1.5 billion in revenue in 2010. Its closest competitors, Jenny Craig and Nutrisystem (Nasdaq: NTRI) together barely cleared $1 billion.
  • Relationships: The company carefully selects its sponsorship, franchising, and licensing agreements. Not only does this contribute to brand development, but it also generated revenues between $88 million and $100 million a year over the last five years.

Weaknesses

  • Customer base: Despite being around for 50 years, Weight Watchers is just now beginning to specifically market to men. It has a carefully thought-out plan, but has no track record and is already behind the proverbial eight-ball, because competitors like Jenny Craig and NutriSystem have already developed ad campaigns targeting men.

Opportunities

  • Customer base: Where some see weakness, others see opportunity. Weight Watchers dominates the industry without marketing to men, which means there is plenty of room for growth if it can implement a winning strategy there.
  • Demographics: As much as it pains me to describe this as an opportunity, our society is not as svelte as it once was. By 2015, the number of overweight and obese people in the world is estimated to reach 3 billion. Weight Watchers has Internet operations in 11 countries, and it looks to continue increasing its international presence.

Threats

  • Competition: Weight Watchers is firmly established as No. 1 in the weight loss scene, but while there are no serious threats to speak of now, in any healthy industry, competition should always be considered. Weight Watchers can shoot down the trendy gimmicks that crop up year after year, but I wouldn't be surprised if the lure of big dollars didn't entice someone else besides Jenny Craig and NutriSystem to become a serious competitor. On top of that, Weight Watchers may see cross-industry competition from pharmaceutical companies, which are desperately searching for an obesity drug. Orexigen (Nasdaq: OREX), Abbott Labs (NYSE: ABT) and Arena Pharmaceuticals (Nasdaq: ARNA) have thrown their hats in the ring. An FDA approval of an obesity drug could easily impact Weight Watchers' grip on the market.
  • Economy: Weight Watchers sees the bulk of revenue come from its meetings program; group support is as a key ingredient in its weight-loss model, as it is in its business model. Overall revenues declined by $137 million between 2008 and 2009, but 66% of that loss came from declines in meeting revenue.

What parts of Weight Watchers' SWOT need more detail? Fill in the blanks by using the comments section below.

Fool contributor Aimee Duffy doesn't own shares of the companies mentioned in this article. The Motley Fool owns shares of Abbott Laboratories. Motley Fool newsletter services have recommended buying shares of Abbott Laboratories. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.