Emily Benton
September 9, 2008
Management 4342
Dr. Prati
Bad news for NutriSystem
According to an article in Fortune magazine, NutriSystem may face an economic slowdown. Last year NutriSystem was number 1 on Fortune’s 2007 list of Fastest-Growing Companies. Since last year the NutriSystem stock has decreased a staggering 64% with the economy in such a weak position. NutriSystem is trying to come up with an innovative business strategy so the company will still be able to produce large profits and continue to market their product.
President and chief executive Joe Redling stated that “consumers are clearly feeling the pinch from housing woes and higher food and gasoline costs.” With this in mind, NutriSystem’s executives were well aware of the drastic changes that were quickly approaching them. In February, “they warned that a slowing economy could squeeze the company’s typical customers ? middle-class Americans.” During the second quarter, a time that is particularly immense for diet companies, revenue and profits fell a considerable amount. The company has recently made organizational changes that focus directly on the future. Also, the company is making cautious moves, keeping in mind that the only constant is change.
The rising prices of food placed difficulty on the company simply because NutriSystem diet is based on a frozen-food line. The company estimates a considerable decrease in the 2008 revenue and executives think that it will continue to shrink. The company is also in a state of disposition because of its diminishing stock. NutriSystem is currently in the process of enhancing growth by trying to appeal to new customers and markets. The company has also hired a new executive to oversee staff that ...