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Nutrisystem Inc. (NTRI) Company Analysis Report

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Updated: Apr 30th, 2020

Introduction

Nutrisystem Inc. (NTRI) is a publicly-traded company listed on the NASDAQ and forms the basis of the organization being studied in this case. NTRI provides various weight management services and products, primarily in Canada and the United States. Weight management programs are online tools, counseling, and pre-packed food programs.

Foodstuff that comprises of a twenty-eight-day provision of lunch meals, desserts, morning meals, and suppers that ideally add-on the clients with clean fruit, dairy, vegetables, salad, and low glycemic items are also offered. NutriSystem vends meals that are pre-packed to the participants of weight loss via cell phone and internet alongside the televised system of QVC.

Organizations comprise of various units that need coordination to operate effectively. Since society’s tasks are accomplished through the organizations, it is upon the management to properly function to get the work done. However, getting the organizations to operate effectively and efficiently proves to be rather difficult and complex while understanding the individuals’ behaviors seem very challenging.

Creating harmony and coordinating the management tasks between an organization’s systems and resources in predicting and cordially controlling the inherent complexities, organizational behaviors, enigmatic nature, paradoxes, and contradictions that are present in an organization thus calls for open system diagnosis.

Therefore, this report classifies the key components of the environment, strategy, tasks, a formal system, and key individuals in regards to the desired organizational outputs. The report further examines an organizational strategy along the lines of the organization’s environmental inputs. Ultimately, it scrutinizes the process of transformation, and the way interaction in the organizational setting enables productivity.

Congruence model for the organization analysis

The congruence model developed by Nadler-Tushman is a more inclusive model that specifies outputs, inputs, and throughputs. The model further assumes that an organization is a dynamic entity and open social system found in larger environments as well as interactions and behaviors occurring between groups, systems, and individuals. In this model, resources are the strategically most vital inputs in an organization while the congruence concept in this model links the needs, goals, demands, objectives, and structures of one component to another.

The strength of this model is that it takes into consideration all the factor inputs and outputs while trying to create harmony between the available resources to bring balance in the demand and supply (Nadler & Tushman, 1980). However, by analyzing the congruence between an organization’s system parts, much consideration must be given to the system outputs and the paired fits. Hence, fits and deficiency in fits are related to the behaviors eminent in any system such as performance, stress, and conflicts.

The comprehensive congruence yearns to specify and interconnect throughputs, outputs, and inputs. The strength of this model is that it incorporates the open systems theory, and retains both the informal and formal systems commonly found in Weisbord’s six box model. The congruence model has, by all means, specified the critical outputs, major outputs, and the transformation processes which characterize the organizational functioning (Harrison, 2005). Other studies have also indicated that Nadler and Tushman’s representation stresses in the procedure of transformation while purposely mirrors on the decisive systems interdependence property.

The congruence model offers the best approach in analyzing the relationships, mix, and uniformity that subsist between various inputs of the organization. For instance, the varying degree upon which the goals, structures, objectives, and demands of a given component is consistent with those of another component. The corporation seems to have very narrow command over diverse entities since it relies on third parties for the net, services of call center, and access to the internet.

Thus, based on the research carried on NutriSystem Inc., the current issues at stake include the operational, marketing, and financial issues. The company’s capability of accomplishing the orders is derailed in case the connection in network plummets. Equally, the business is adversely affected in terms of sales and brand loss.

The scenario arises when the call centers are unavailable for a given period due to communication or internet failures (Thomson Reuters, 2011). Further, changes in the customer products preference would further negatively influence operational outcomes. These coupled with the labor disruptions, financial operations conditions, internal inefficiencies, product quality, delivery problems, and shortages in resources as well the equipment failure issues could benefit from the amicable changes.

NutriSystem Inc. critical inputs

According to Nadler-Tushman organizational analysis congruence model, there are specific inputs, outputs, and throughputs that seem compatible with the open system theory. This model puts much focus on the process of transformation and exclusively factors on the interdependence of influential system property.

In the congruence model, inputs are perceived as factors that at a single point in time tend to structure the givens that face an organization. In most cases, the inputs refer to the materials an organization requires for operation. However, the most critical input in the organizational analysis congruence model includes factors such as resources, environment, history, and organizational strategies.

Based on the first three categories, resources about the inputs encompass factors such as capital, information, technology, less tangible assets, and human resources. Assets that are less concrete include the organizational discernment in the market or an optimistic organizational environment. Indeed, the resources dwell around assets that are recognized in the market.

Therefore, resources are deemed critical in any organizational arrangement as they help in achieving goals, demands, and mission set by organization components (Nadler & Tushman, 1980). The critical effect of resources on other factor inputs arises based on how the resource is deployed, configured, and shaped by the organization. Resources are affected by the level of demands the environment creates on an organization as well as the constraints emanating from the environment to the actions of the organization.

Conversely, the environment as an input includes all factors that accrue from outside of the organization. Every corporation subsists inside the greater environmental background that consists of factions, superior communal forces, and personnel. These factors are critical in any organization due to their powerful impact on organization performance. The setting expressly consists of purveyors, authoritarian and legislative bodies, consumers, exceptional interest factions, competitors, workers unions, and financial bodies.

The research suggested that the environment is quite critical in the functioning of the organization. From these authors’ assertions, the three features that make an environment critical include demand, constraint, and the opportunity. The environment creates demand for an organization’s products while on the other hand, it tends to pose constraints on the actions undertaken by the organization.

For instance, the environment can limit the extent of activities that an organization partakes, and the limitations may be concerning scarce capital in addition to governmental regulations and prohibitions. Moreover, the environment is deemed critical because it provides opportunities to be explored by an organization (NutriSystem, 2011). Thus, the environment dictates the quality, flexibility, and quantity of resources that an organization can access.

NTRI’s history is also an input since most functions that the organization currently undertakes are inclined on past events. Understanding the outlines of precedent practices, efficiency, and conducts of an organization might greatly impact on the existing operation of the corporation. Therefore, history helps to elucidate on the behavior of past leaders, and crises encountered besides giving the relative response measures undertaken by the organization and the evolution of core norms and values.

The effect of history tends to arise in the way resources were allocated, and this is based on previous strategic decision making, crises, and actions of leaders. If resources were previously misused or inefficiently deployed, the environment is likely to be constrained in terms of the quality and quantity of resources it can provide (Cummings & Worley, 2008). NutriSystems Inc. has ever since its incorporation aspired to lead in the provision of weight loss program set on its mission of offering nutritionally balanced meals and quality food programs.

To achieve its mission, the company has been very strategic in the selection of its resource inputs as technology, human resources, and information. Besides, the selected environmental and historical factor inputs have played a significant role in ensuring that NutriSystems, Inc accomplishes its goals and objectives. The analysis of these inputs can be synthesized using porter’s three generic competitive strategies, as discussed below.

Cost differentiation

NutriSystem, Inc. offers the least charged weight loss programs, which are a hundred dollars less when compared to the other mass loss programs. The program is attributable to the fact that the resource inputs that NTRI employs, such as capital, information, technology, and human resources are acquired at the least cost possible. The company has a larger human resource base, requisite technology, and information on market demand and supply. The current and past operational information help NTRI to meet the needs of the clients and suppliers of raw material amid operating within the regulatory and governmental bodies regulations.

The management understands the precedent activities and the company’s past operations like high costs incurred, price fluctuations, as well as managerial and clients’ behaviors. Hence, the company has got an easy time in offering the least cost product and service than the other companies that offer similar products (Thomson Reuters, 2011). The strategy has enabled NTRI to gain a competitive advantage over other market rivals.

Differentiation

Given the readily available factor inputs like demand, capital, effective organization, precedent activities along with the competitors, market, and suppliers’ information, the company differentiates its business operations to be uniquely identified and extensively valued by the consumers.

The differentiation strategy thus forms part of the detailed outputs and performance objectives that an organization wants to achieve, and this is often incorporated in the mission strategy. The support rendered by the factor inputs enables NTRI to offer personalized programs, cut back therapy, work out training, maintenance programs as well as to conduct adjustment.

Focus strategy

Having resources such as technology, human resource, and capital besides past clients demand and regulatory bodies’ information at its disposal, the NTRI has been able to focus on the assimilation of diminutive glycemic index carbohydrate with low-fat meal plans.

To satisfactorily serve its clients, the company focuses its provision of demanded products on a particular client segment. Thus, the focus strategy which has gained the support of factor inputs namely the organization history, environment, and resources have facilitated NTRI provisions of discounted weight loss programs to mark the basis under which the company competes (Nutrisystem, 2011).

Despite the difficulties that Nutrisystem Inc. might be facing, the company’s strategy is overwhelmingly supported by the key factor inputs. NTRI’s business and competitive strategies are in line with the demand and supply of both the internal and external environment. The company’s demand is mainly driven by trends in age, population, household size, ethnicity, and race as well as disposable income levels. The NTRI’s profitability depends on efficient operations, economies of scale, good product mix, as well as the capital intensive strategy (Thomson Reuters, 2011).

Outputs of NutriSystem Inc

In an organization such the NutriSystem Inc., outputs refer to what the corporation produces, its efficiency, and the way it presents its business operations. Despite the fact, there are various components of an effective organization, the key levels in the system’s output, and other products which contribute to resourceful performance needs to be identified.

According to Nadler-Tushman Congruence Model, outputs can be identified at organizational, individual, and group levels. However, when evaluating an organization, there is the urge to distinguish factors such how an organization attains its goals and meets its objectives, the level of resource utilization, as well as the level of an organization’s adaptability with respect to favorable positioning within the business environment (Nadler & Tushman, 1980).

NutriSystem Inc. productivity is prejudiced by certain personal conducts and extent of production. Such conducts encompass sentimental feedback such as trauma, contentment, and knowledgeable work life worth. The pressure constitutes the desired levels of outputs in the organization and the employees themselves (Anderson, 2009). Therefore, the organization aims to accomplish the clients’ requirements at the three basic levels. The following outputs are seen to be apparent at NTRI to satisfy the demands.

Organization level

At this level, NutriSystem Inc. combines both the individual and groups outputs to fulfill its objectives. Besides, various structures, methods, and processes that enhance tasks performances are created. The organizational outputs mostly include designing jobs, work environment, management of human resource systems, structuring units, control mechanism, and coordination.

Individual level

The individual outputs at NTRI include all the skills and knowledge, perceptions, expectancies, individual preferences, needs as well as background factors that either derail or fosters the success of the organization.

Group level

At a group level, the output entails efforts geared towards cordial process arrangements, structure, and relationships that appertain to leadership behaviors, influence and communication patterns, intergroup relations, and informal task performance arrangements.

How NutriSystem Inc. identifies groups

Based on the company’s networked business operations across different regions namely the United States, Japan, and Canada where it proffers numerous weight management products and services, the NTRI identifies these groups in terms of functionality and geography. With regards to functional identification, the organization recognizes groups that make NTRI a global market leader in the production and sales of weight loss programs and various other services to the clients.

In essence, each group’s contribution is depicted in the levels of sales that accrue from the designated duties (Nadler & Tushman, 1980). For instance, efficiency in group functionality is seen at the level of returns on capital, revenue generated, accumulation of wide clients based, and competitive advantage over other rival companies operating in the same region. The efficiency is merely deemed to emanate from good job design and operational efficacy at all levels. Within a functional group, the outputs are measured in terms of coordination, job design, leadership behaviors, and patterns of influence as well as communication and intergroup relations.

On the other hand, the divisions are identified at NTRI through job segregations, type resource demands, and absorptions, associated networks, performance constraints in line with business operations. Thus, the key to the divisional groups is resource utilization, goal attainment, and adaptability. Nevertheless, performance in both groups can be measured through individuals’ productivity, cost minimization strategies, product quality, clients’ satisfaction, and the realization of the company’s goals and objectives.

Key individual functions and their outputs

The key individual functions at NutriSystem Inc entail performing organizational tasks appertaining to products designing, customers’ enticements and retention, maximizing the utilization of the available resources, organization adaptability, and cost minimization. The key individuals have the responsibility of ensuring that the company realizes both its long term and short term goals and objectives. To accomplish these tasks, the workforce needs to include an assortment of skills and understanding, diverse priorities and requirements as well as projections and standpoints.

At the same time, individuals must develop essential demographic factors in influencing individual behaviors. Principally, the transformation of individuals’ outputs helps in the functioning of the groups in the sense that the skills, knowledge, and perceptions contributed by an individual significantly assist in the group coordination, relations, and performance.

Hence, without individual outputs, there are chances that disruptions in groups will probably occur leading to misappropriation of resources, high cost of operation, and lack of customers satisfaction. Based on these factors, individual performance at NutriSystem Inc. is measured through the levels of productivity. Such levels could be in terms of reduced labor working hours, augmented workers output, organization competency, cost minimization, maximum resource utilization, and increased profitability. In general, performance is gauged via the level of adaptability, resources utilization, and organizational goal attainment (Bischoff & Trimborn, 2010).

How outputs at different levels interact with each other

The organizational level seems to be supreme in a company’s daily undertakings. The entire functional operations are initiated and implemented at this level. However, the skill, knowledge, optimistic relations, and perception that group and individuals contribute are paramount in the strategic coordination, design, business adaptability, and making resource utilization.

Essentially, through the viable skills and knowledge contributed by NTRI individuals, the divisions can adequately allocate the available resources effectively and appropriately to achieve optimum output (Anderson, 2009). Thus, the levels interact through duty segregation, resource allocation, job design, and strategic management to attain the company’s set goals. From all business undertakings, NutriSystem Inc. performance is moderate when compared to the previous financial years.

Conclusion

The strength of this model is that it takes into consideration all the factor inputs and outputs while trying to create harmony between the available resources to bring balance in the demand and supply. The evidence indicated in the above analysis shows that the congruence model is predominantly strong in fits, informal, and formal systems operations alongside the factor inputs, throughputs, and outputs.

Thus, the congruence model would certainly do well in determining how the emanating issues fit and are consistent with one another at NutriSystem Inc., and possible solutions to the emanating problems would be found. Possibly the best organizational analysis would be given by the congruence model based on the apparent issues facing NutriSystem Inc.

References

Anderson, D. (2009). Organization Development: The Process of Leading Organizational Change. Thousand Oaks, California: SAGE Publications Inc.

Bischoff, A., & Trimborn, P. (2010). Change and Renewal – Organizational Development: The Successful Implementation of Organizational Change at Sony Ericsson from a Management Perspective. Munich, Germany: GRIN Verlag.

Cummings, T., & Worley, C. (2008). Organization development & change. Auckland New Zealand: Cengage Learning.

Harrison, M. (2005). Diagnosing organizations: methods, models, and processes. Thousand Oaks, California: SAGE.

Nadler, D., & Tushman, M. (1980). A model for diagnosing organizational behavior. Organizational Dynamics, 9(2), 35-51.

Nadler, D., & Tushman, M. (1980). A model for diagnosing organizational behavior: Applying a congruence perspective. Boston, Toronto: Little, Brown and Company.

NutriSystem, Inc. (2011). NutriSystem, Inc. Annual Report.

Thomson Reuters (2011). NUTRI SYSTEM INC /DE/(NTRI). Annual report pursuant to section 13 and 15(d).

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