Organizational Outputs -- Nadler-Tushman Congruence Model
Company Summary: Nutrisystem, Inc.
A supplier of weight management products and services, Nutrisystem was founded in 1972 and has headquarters in Horsham, Pennsylvania. Nutrisystem customers reside primarily in North America, but pre-packages products are sold through the Internet, by telephone, on QVC television shopping network. The company manufactures four specific weight management programs, including: Nutrisystem Women, Nutrisystem Men, Nutrisystem Select, Nutrisystem D. program which is a low glycemic program for people with type 2 diabetes; Nutrisystem Silver; Nutrisystem Flex which is a 28-day program; and Nutrisystem J. Diet, which is a 14-day program that is sold in Japan. In addition to the pre-packaged food programs, the company offers online tools and counseling to support weight management.
Company Outputs: Nutrisystem Inc.
The company's value proposition is: Well-positioned brand in a large addressable market with a proven and effective weight loss system.
Organizational outputs. Nutrisystem employs an e-commerce business model, and has multiple revenue streams. Nutrisystem refers to the key indicators of their sales performance in these terms: New customer starts [subscriptions to the weight management programs; reactivation [renewed weight management subscriptions]; and length of stay [the company monitors customer satisfaction].
The company categorizes sales by direct channel and QVC distribution. For the years 2010, 2009, and 2008, direct channel sales represented 96%, 94%, and 93% of the revenue. Direct channel net sales were $490.8 million in 2010, down from $495.4 million in 2009, and $639.0 million in 2008. The decline in sales revenue in 2010 is attributed to a drop in reactivations of the weight management product lines, but it was partially offset by an increase in retail sales revenue. Revenue is generated not only from customer starts and reactivation of former customers, but also through customer order behavior, which includes the length of time customers stay on a program and the diet programs customers select and order.
QVC distribution of pre-packaged food resulted in 4% of the revenue in 2010, 6% of the revenue in 2009, and 6% of the revenue in 2008. QVC viewers purchase Nutrisystem products directly...
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