GNC Strategic Plan 2016-2020

Abstract

GNC Strategic Plan 2016-2020, which follows, is a result of rigorous analysis of GNC’s current status, vision, mission, and ability. The plan is the culmination of research aimed at identifying various opportunities and strengths, and it provides a systematic means of driving the organization to new heights within the next five years. The document is intended to be used by the organization’s top management and other members of staff to redefine their operations and drive the organization to the next level. The plan is dependent on the input of various stakeholders, including top managers, junior staff, competitors, and customers. The plan is also grounded on past achievements, vision statement, mission statement, and company goals among other important aspects of the organization.

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The opportunity to analyze, scrutinize, question, and evaluate the performance of an organization is important and not available on a daily basis (Goodstein, Nolan, & Pfeiffer, 2010). An organization with a presence in more than 55 countries in the world and millions of customers in diverse parts such as GNC rarely has the luxury of time to reflect on its performance (United States Securities and Exchange Commission, 2015). Consequently, the investment of time and resources to prepare this strategic plan will prove invaluable to the organization.

Keywords: GNC, SWOT, project scope, strategic goals

Executive Summary

This document presents a five-year strategic plan for General Nutrition Corporation, GNC. The five-year period strategic plan is expected to cover the period 2016-2020. The duration represents the time when the project is expected to commence and terminate after strategic objectives have been achieved. The strategic plan will act as a blueprint document for the firm, which will be essential in the attainment of its mission and vision statements. The plan is expected to define the organization’s current state, its future state, and provide specific goals and objectives for the organization within the five-year period.

Moreover, the strategic plan will describe the organization’s inherent weaknesses, its strengths, available opportunities as well as threats. Such an evaluation of an organization’s capabilities is a prerequisite to achieving the nutritional goals of the firm. Furthermore, the strategic plan establishes the core values of the organization by redefining the existing ones. Additionally, it will stipulate specific ways and means of overcoming threats and weaknesses as well as measures that will be taken to harness available opportunities and optimize its strengths.

Finally, the plan will depict a practical method for measuring achievements attained within stipulated periods of time. Apparently, the plan focuses on the following key aspects:

  1. Organization’s history.
  2. Organization’s status.
  3. SWOT analysis of the organization.
  4. Organization’s goal areas.
  5. Organization’s core values.
  6. Five-year strategic goals and their attainment.
  7. Goal limitations and means of overcoming them.
  8. Implementation tools.
  9. Stakeholder engagement.
  10. Achievement measurement.

The strategic plan is aimed at making the organization more productive for the next five years, keeping it faithful to its mission and vision, and giving it the ability to respond to changes in the business environment. The process of preparing a strategic plan poses various advantages to organizations as it identifies pertinent aspects beneficial to the organization such as opportunities, weaknesses, strengths, and threats (Bryson, 2011).

Organization’s Status

History

GNC is a multinational organization with a presence in more than 55 countries in various parts of the world. The corporation handles nutritional products such as supplements, vitamins, energy products, dietary, sports nutrients, herbs, and mineral products. GNC also manufactures private-label products for Sam’s Club, Pet Smart drugstore.com, and Rite Aid. The corporation’s headquarters are located in Pittsburgh, PA. GNC’s most successful businesses are located in South Korea, Chile, and Mexico. Additionally, it has more than 188 stores in Canada alone, and all the subsidiaries of GNC are aimed at promoting nutrition and healthy living.

The history of GNC dates back to 1935 when David Shakarian started operating a general food store in downtown Pittsburg. The store made about $35 a day, enabling him to open the second one in six months. The two stores were later destroyed by the flooding of Ohio River but were later rebuilt by David. By 1941, David had opened a total of seven food stores and was making substantial sales. The corporation was officially registered in 1936 and played a crucial role during the Second World War when customers requested mailed products through letters. The health craze of 1960 brought changes to the organization. During this time, David opened new stores outside Pittsburg and changed the name to General Nutrition Center (GNC).

After the death of David in 1984, the family sold the corporation to the Thomas Lee Company, which fought to retain its headquarters in Pittsburg. It was later sold to Royal Dutch Numico in 1999 and to Apollo Management in 2003. Four years later, the corporation was acquired by Ares Management and Ontario Teachers’ Pension Plan. Finally, it became public in early 2011. Currently, there are more than 6000 stores operated by GNC within the United States and throughout the world. In an effort to increase its presence in the European market, GNC acquired a multi-sports nutrition online seller, A1 Sports Ltd, in 2013.

The same year it moved into China and established a standalone retail store in Shanghai. In 2015, it entered into an agreement with American Media, Inc on the retail of nutrition associated with shape, natural health, pregnancy, muscle and fitness, and flexibility. Going forward, the company expects to continue establishing new partnerships, mergers, and stores in new and existing markets.

Organization’s Mission and Vision Statement

Vision statement. To provide a shopping experience that exceeds the customers' expectations (United States Securities and Exchange Commission, 2014).

Mission statement. Continue to be the leading provider of products, services, and information in the self-care and personal health enhancement market (United States Securities and Exchange Commission, 2014).

Financial State

The corporation has continued to grow considerably over the years. According to financial reports for the year ending 30th September 2015, the total current assets of the corporation stood at $ 907,909, while current liabilities for the same period total $ 266,153. Long-term assets for the same financial year stood at $ 1,755,617, while total long-term liabilities were $ 1,760,235. Gross profit for the nine-month period proceeding 30th September 2015 was $ 756,409. In fact, this was a decline from the same period in 2014, which stood at $ 760,046. Net income for the same period was $ 176,377, which had also decreased from the previous year at $ 204,104 (United States Securities and Exchange Commission, 2015).

An analysis of the financial situation indicates a slight decline in profits owing to a number of facts that must be addressed going forward. Total annual sales within the United States had declined considerably in 2015 owing to various legal concerns bedeviling the organization. Litigation expenses had also increased considerably for the same period of time and are likely to be on the increase in the future if inherent weaknesses are not addressed. Despite new investments in various stores outside the United States, the corporation failed to surpass its annual profits in 2015 due to aspects that were previously mentioned.

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SWOT Analysis

This section presents an analysis of GNC grounded on its previous performance, prevailing market factors, and possible future dynamics. The analysis plays an important role in the identification of goal areas in which the organization should engage in order to retain its leading role in the market. Strategic planning involves recognizing the current state of the organization and drawing a road map for the future. For effective planning to be undertaken, planners must recognize strengths, threats, weaknesses, and opportunities associated with the firm in question. Consequently, this analysis identifies strengths, weaknesses, threats, and opportunities with regard to General Nutrition Corporation. The analysis is a key aspect of the strategic plan since it forms a background upon which strategic decisions were made regarding the future of the organization.

Strengths

International operations. A consistent increase in revenue relating to the corporation is a good indicator of continued growth in the international market. The organization currently operates in more than 55 countries with major stores in the United States, Australia, and the United Kingdom. International operations ensure that the organization is not wholly dependent on a single market since its collapse would negatively affect the market. In 2013, for example, the corporation established a store in Shanghai, which has helped it penetrate the European market.

Leading market position. GNC has maintained a leading market role with regard to quality, price, and size. As a result, this has enabled it to control market dynamics for a long period of time despite stiff competition from various organizations. The leading market role has helped to stabilize sales and facilitate market growth. Additionally, it has boosted consumer confidence, which is an aspect that has given the organization the possibility to make sales even during difficult legal, political, and economic times. Competitive prices and quality have helped GNC to attract customers from various classes of people without engaging in market segmentation. GNC’s brand name is respected all over the world, enhancing market growth and reducing the cost of the advertisement.

Broad product offering. Diversity of products has also made it possible for the organization to remain relevant, attain growth in sales, be profitable, and surpass its competitors. GNC offers a wide range of products, including supplements, vitamins, energy products, dietary, sports nutrients, herbs, and mineral products. Each of its products attracts a considerable number of consumers, making it possible for the organization to make adequate sales within a short period of time. Numerous products also ensure that enough sales can be made when consumers shun certain products due to prevailing market factors. Additionally, it also ensures that customers with different tastes and preferences are satisfied within the organization.

Strategic location. GNC’s important stores are strategically located within large cities where there is an adequate market for its goods. These stores target the general population, making it possible for customers to make adequate purchases without having to travel long distances from their places of work. Strategic positioning has also been extended to international stores where the organization targets large cities before focusing on smaller markets.

Technology adoption. Since World War II, GNC’s predecessors have continued to take advantage of the existing technology. Consequently, this has enabled it to keep pace with the current market trends and attract a wide range of customers. Adoption of modern food preparation technology and online marketing has helped the organization to grow considerably over the years. It has done this by aiding advertisement and enhancing the production of high-quality products.

Weaknesses

Business concentration. GNC focuses on the domestic market in the United States since most of its stores are concentrated within the US. In fact, this concentration of businesses in one region makes it hard for the organization to realize substantial sales during hard economic times such as the 2008 economic depression. Overreliance on one market makes it hard for the corporation to grow considerably due to limited market information on external markets. Overconcentration also denies the organization the opportunity to venture elsewhere due to the concentration of resources in one region.

Multiple legal proceedings. The most significant inherent weakness of GNC is a series of legal proceedings regarding diverse issues such as contract bleach, product quality issues, illegal contents, misleading advertisements, and dominance. In 2015 alone, the organization was involved in more than fifty legal suits within the United States. Thirty-three personal legal suits were filed against the corporation accusing it of selling products, which contained 1.3-dimethylpentylamine.

Most of these cases had emerged after selling illegal products manufactured by third parties and had commenced in 2014 (United States Securities and Exchange Commission, 2015). In fact, most of these legal suits are still ongoing and pose a great financial danger to the organization since they are likely to lead to compensations by the defendant (GNC). Moreover, other recent legal battles in which GNC has participated party include:

California wage and break claims. There are several lawsuits filed by individuals against GNC for contract breach and employment act violation. In one proceeding, GNC was sued for breaching employment contracts by Charles Brewer. The matter is still ongoing in the federal court and is scheduled for a hearing in February 2016. It is worth noting that this matter has cost the company liability in form of legal fees and is likely to impact negatively its financial status in the future (United States Securities and Exchange Commission, 2015). An employee claiming overtime compensation in the Superior Court of California filed another suit in 2012 (Barrett, n.d.).

Non-compliance. In October 2015, the corporation was sued by Oregon's attorney general for allegedly selling products containing BMPEA and picamilon, which are unlawful in the United States (“GNC franchisees file a lawsuit,” 2004).

Ultimately, multiple legal suits pose inherent weaknesses in the financial management of the organization. Additionally, they reduce consumer confidence and cause customers to shun certain goods. Legal suits between GNC and its employees also make it hard for the organization to achieve its goals due to tensions between various levels of management.

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Opportunities

Organic growth drivers: strategic alliances. The organization has great potential emerging from strategic alliances and partnerships with other international corporations. Its brand name and leading role in the nutrition sector make it easy for the organization to win strategic partners and penetrate unknown markets within a very short period of time. The availability of partners in strategic places makes organic growth for the organization attainable within a very short period. Thus, this opportunity can be harnessed and applied by the organization to penetrate markets in Africa and other Third World countries where the organization has not appropriately ventured.

Growing US nutritional supplements retail industry. Growth in the United States nutrition supplement industry also poses a great opportunity for the organization in the coming years. Today, almost every home in the United States makes use of nutrient supplements for various reasons. In fact, this growth provides an opportunity for product diversification and organic growth. If harnessed, this opportunity is likely to increase sales and cause revenues for the firm to considerably grow. The growth of sports within the US also provides an opportunity for the firm to sell part of its products to sportsmen and women. Investing in the growing market is likely to yield positive results for the firm as opposed to the retention of traditional markets.

Aging global population. Growth in the aging population globally poses another major opportunity for the firm. Aged persons in many parts of the world require nutritional supplements and other health-boosting products. Consequently, the firm can harness this opportunity to its own advantage. The availability of strategic stores and online sales can enable GNC to reach the growing market without having to invest massively in new areas.

Unexplored markets. Many unexplored markets present good investment opportunities for the organization. Currently, the firm has concentrated mainly in the US market and partially in Europe and Australia. Asia and Africa are yet to benefit from the presence of the firm despite the fact that they also have a substantial market for the products.

Threats

Failure of new products in clinical trials. In the wake of scientific research and rigorous investigations on products, the development of new nutritional products that meet set standards is becoming extremely hard. Over the last few years, GNC has attempted to launch the sale of various products unsuccessfully following failed clinical tests. The reason is that some of the products are either contaminated, do not contain purported ingredients, or are wrongly labeled.

A good example of products that had been launched but were never sold includes Redline White Heat and OxyTHERM, which were said to contain chemical contaminants that have serious health implications, including heart attacks. The failure of these and other products to be sold despite cash investment leads to various losses for the organization. Ultimately, the future development of products that meet set health standards is a daunting task for the firm. However, this is likely to inhibit growth for the organization.

Increasing competitive pressures. GNC continuous to face stiff competition from various national nutritional retailers that appear to adopt similar strategies with GNC. These major competitors are Walgreens, Walmart, and Target. The three giants have established stores in various parts of the United States and beyond. Price competition, product quality, and rigorous advertisement are key areas of competition. Currently, this stiff competition continues to deny GNC access to an important market while increasing the cost of research, advertisement, and product development.

Stringent government regulations. The government, both federal and state, has adopted stringent measures to control nutrition products in the market. These measures are expected to ensure that the population is safe from unscrupulous business operators purporting to sell quality products but offering products other than those they advertise. Health operations in various GNC stores, especially in New York, have led to the withdrawal of various products from the stores. In February 2015, New York’s attorney general discovered that GNC was offering non-herbal products despite advertising them as herbal products. Consequently, the AG directed that such products be withdrawn from the stores with immediate effect (Martin, 2015).

These measures pose a great challenge to the operations of the organization. Without adhering to these measures, GNC is likely to continue incurring various losses. According to New York’s attorney general, the government is determined to ensure that all illegal business practices such as false advertisement, mislabeling and contamination are eliminated from the market.

Goal Areas

Having identified strengths, weaknesses, opportunities, and threats of the organization, the next step of the strategic plan involves determining areas that must be enhanced by the organization. Goal areas represent particular spheres that require attention from the organization. Goal areas can be identified from any of the four aspects described in the analysis section.

Legal Issues

The organization has had serious legal battles emanating from aspects such as non-compliance with standards, contaminated products, staff dissatisfaction, and breach of contract among others. Currently, there are more than thirty unresolved cases involving GNC in various courts within the United States. These legal battles have had negative impacts on various facets of the organization.

  1. First, legal battles in courts of law require huge amounts of finances in terms of litigation fees and compensations.
  2. Secondly, they consume considerable time, which would be used in addressing other important issues in the organization.
  3. Thirdly, they provoke hostility between administrators and certain members of staff, thereby affecting staff morale and productivity in the organization.
  4. Finally, they affect the image of the organization, thereby leading to low sales.

Consequently, the organization must design a means of minimizing these legal battles and reducing their implications for the organization.

Various suggestions that can be used to address these issues may include strict adherence to standards, quality control strategies within the organization, the formation of a legal committee to rigorously handle pending matters in courts, and engagement of affected persons through out-of-court agreement. In fact, this goal area requires urgent attention of the organization and must be incorporated in the immediate five-year plan. Failure to address this goal in the coming years is likely to drive the organization to unprofitability.

Product Development

Investing in the development of new products for the organization is another goal area that should be considered by the organization. The development of new quality and standard products is likely to boost the competitiveness of the organization by inhibiting competitor activities and increasing sales by attracting new customers. Although this is an important area of consideration, the organization must investigate it carefully due to past experiences in which new products have failed to meet standards set by the government and other professional bodies.

In the development of new products, the organization must plan carefully and prepare standards to be complied with by product developers. The development of new products must also be informed by market dynamics. Adequate research must be conducted to identify areas of interest. New products should address emerging markets such as the aging population, sportspersons, and weight loss requirements among others.

New products must also be of very high quality in order to cope with the activities of worth competitors such as Target. It is worth mentioning that quality products require investments in research, time, and technology. Product development goals would, therefore, consume substantial amounts of resources. A major risk involved in investing in this goal area is a substantial loss of revenue owing to the clinical failure of products or market rejection. To address this goal area, the organization can consider redefining the product development department by engaging a research and development committee and invest in quality standards and tools of measurement.

Staff Affairs

Staff members are an important organ of any given organization. A motivated staff is an asset to an organization and depicts higher levels of productivity than de-motivated staff. Although GNC has continued to dedicate adequate resources towards staff development, there remains a big room for improvement that can be explored in the coming years. Currently, numerous efforts have been put in place as an attempt to motivate the organization’s staff members.

In fact, such efforts include better remuneration, promotion schemes, team building outings, family tours, entertainment, and allowances. However, there have been areas of dissatisfaction among different staff members, including remuneration, contract breaches, overtime compensation, and staff development. These areas can be investigated in the next five years to ensure that GNC retains motivated staff that is beneficial to the organization.

Efforts that can be taken to motivate staff members may include scholarships for staff development, appraisals and promotions, recognition of extemporary performance, adherence to contract terms, transparent disciplinary measures, and proper overtime remuneration. In order to mitigate complaints regarding staff, improve working relations, and boost staff morale, the organization may consider establishing a committee that would be dedicated to studying staff affairs.

Store Expansion and Investment

Traditionally, GNC has always dedicated massive resources to new investments and expansions. Therefore, this has helped it expand into new regions that were previously unreached. Areas such as China are recent beneficiaries of measures to open stores in new regions. As a result, these new stores have brought more customers on board and helped increase sales for the organization. With the emergence of new markets in the United States and beyond, the organization must continue to invest in new stores in order to have access to the emerging markets. Thus, focusing on the outside market rather than the already concentrated market within the United States would be more beneficial to the organization. Store establishments require massive resources and have serious cost implications. Consequently, informed choices must be made before deciding to invest in a given area.

Unexplored Markets

There also remain many new areas where the organization is yet to establish its presence. Currently, the organization has managed to reach about 55 countries in various parts of the world. Venturing in unexplored areas can go a long way in increasing sales for the organization. A good strategy that can be applied in venturing in unexplored areas would be to establish strategic stores and use online marketing to stimulate customers to buy the organization’s goods. In the current world, there exists technology, which can help the organization reach people in various parts without having to invest in physical presence. However, a major challenge to this effort would be the perishability of most nutrient products. Consequently, it would be important for the organization to make a physical presence by establishing stores or partnerships with existing organizations.

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Alliances and Partnerships

Mergers, partnerships, and acquisitions are important areas that the organization must explore in the coming years for it to penetrate new areas and establish firm grounds in already established markets. Over the previous years, the organization has managed to form partnerships with various organizations in different parts of the world. In 2013, for example, GNC acquired A1 Sports Limited. In 2015, it established a partnership with American Media, Inc.

As a result, these two organizations have been influential in retailing and advertising GNC’s products, especially in the European market. Future partnerships and mergers can help increase the organization’s ability to win different markets in various parts of the world. Additionally, partnerships would act as important sources of information regarding various markets, thereby reducing the cost of research. Partnerships would also help in advertising and retailing various goods.

Research

Research is an important facet of development for any given organization. Research helps avail information regarding technology, market dynamics, market availability, consumer likes and dislikes, related products, competitor activities, staff dynamics, and organization’s performance. Consequently, investment in adequate research would provide an important source of information on product development, competition strategies, unexplored markets, and available technology. As a result, this information would help the organization in planning and decision-making. Ultimately, adequate research can avail vital information that can help the organization retain its leading role in the nutrition sector. Thus, this goal area is a vital aspect that must be addressed within the shortest time possible and should be considered as a priority goal area.

Strategic Communication and Advertisement

Recent market dynamics such as stringent government efforts, negative publicity created by recent media stories, numerous lawsuits, and rigorous competition necessitate rededication in the advertisement. The outlined market dynamics have had negative implications for the organization and have continually reduced the ability of the firm to make adequate sales. Through advertisement, the firm can manage to regain its image and reassure its traditional customers.

The firm must eradicate various aspects such as wrong labeling, breach of contracts, false advertisement, and contamination of products as well as staff oppression. In fact, this can be done by investing in strategic communication and advertisement. By failing to address the outlined issues, the firm continues to suffer negative publications, which is likely to pose serious negative implications for the performance of the firm.

Quality Issues and Standards

One of the areas that have had serious negative ramifications for the organization is the issue of quality and adherence to standards. In several instances, the organization has had serious confrontations with government agencies and customers for selling contaminated products, wrongly labeled products, and engaging in misleading advertisements. In most of these products, third party manufacturers were involved. In other instances, the organization has had to issue directives withdrawing certain products from their shelves. Additionally, the firm has also advertised goods and offered them for sale but withdrawn them hurriedly after realizing that they did not meet quality standards. It is now time for the organization to comply with standards and adopt stringent internal quality measures. Hereby, this will go a long way in improving the image of the company and avoiding unnecessary losses through litigation and numerous legal battles.

Core Values

To steer the organization to higher levels, various stakeholders must comply with certain values. Values help the organization to avoid unethical practices and focus mainly on the delivery of services to customers. Consequently, this strategic plan provides the following core values for the organization.

  1. Leadership: GNC will strive to maintain its leading role in the retailing of high-quality nutritional products globally.
  2. Corporation and Collaboration: GNC will strive to bring various stakeholders from abroad in recognition of the significant role played by individual segments of the organization.
  3. Adaptability: GNC will strive to be highly flexible with regard to changing consumer needs, technological advancements, and other market dynamics.
  4. Diversity: GNC will strive to meet the diverse needs of all stakeholders by being attentive to their needs and offering varied products and services at any given time.
  5. Development: GNC is founded on a culture of development, which stimulates growth at personal and organizational levels.
  6. Honesty: GNC will strive to comply with the demands of ethics by remaining honest with its customers and authorities.
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Five-Year Strategic Goals and Attainment

This section identifies specific goals that must be attained by the organization within the next five years. These goals are identified from priority goals discussed in the Goal Areas sections. Priority goals define the most important goals without which the organization is likely to fail in its operations. They also represent those goals that are likely to have positive implications for the organization if addressed.

Marketing Goals

Goal 1

To increase the number of annual sales in all existing stores.

Objectives

  • to enable GNC to remain profitable over the next five years;
  • to compensate for lost customers due to legal challenges faced previously;
  • to ensure that the organization retains its leading role in the retailing of nutrition-related products.

Discussion

In order for the organization to remain relevant in the market, it must devise a strategy to increase total annual sales. A constant increase in total annual sales is essential in offsetting the rising cost of doing business, meeting other expenses, compensating for lost customers, and retaining the leadership role of the organization in the nutrition industry. The target is attainable going by previous company trends. In 2015, for example, total annual sales sold through GNC. Com increased considerably by 5.6% (United States Securities and Exchange Commission, 2015, p. 23).

Maintaining this ratio of growth for the next five years would help increase revenue for the organization and boost development in various areas. By ensuring that sales increase considerably, the organization is capable of increasing total revenue. The 5.6 % increase in sales for 2015 translated to a 2.4% increase in revenue which is good for the organization. Various stages can be adopted to increase total annual sales for the organization.

Strategies

The following steps should be taken by the firm in order to increase its total annual sales over the next five years.

  1. Advertisement: In 2015, the organization managed to reduce expenses in the retail segment by 38.4%, especially over the last quarter (United States Securities and Exchange Commission, 2015, p. 24). The reduction was attained following a cut in individual expenses, including the cost of the advertisement. However, with negative publicity beginning to impact negatively on the organization, the decision to reduce advertisement must be reinvestigated. Substantial funding in advertisement and corporate communication will most likely counter negative publicity, stimulate the market, and help increase the number of sales.
  2. Market expansion: To increase sales, GNC must invest in expanding its market share. The strategy will be discussed further as a goal on its own latter in this section.
  3. Product development: Another strategy that is likely to increase sales is the development of new products, repackaging of existing ones, and the improvement of product quality. Every year, the organization should be dedicated to launching a new product, rebranding an existing one, and improving the quality of at least two existing products. Product development will be discussed in greater detail later in this section.

Goal 2

To establish new markets in unexplored markets of Africa and Asia.

Objectives

  • to stimulate sales from diverse regions;
  • to compensate for lost customers due to legal challenges faced previously;
  • to reduce overreliance on the traditional American market.

Discussion

The organization is in dire need of new markets for its commodities. The existing market is already crowded with competitors, and it is becoming extremely hard for the firm to attract new customers. Negative publicity resulting from different legal suits has also led to the loss of customers, especially in the United States. Newly established markets in China, Australia, and the United Kingdom are becoming significantly important for the organization (United States Securities and Exchange Commission, 2011).

However, sales made by these subsidiaries are low compared to those made by traditional American societies. Notwithstanding that, they have helped to compensate for lost customers. Consequently, investment in new markets is a worthwhile endeavor that is capable of cautioning the organization during hard economic times.

Strategies

The following are strategies that the organization should put in place in order to expand its market.

  1. Investments: Over the years, GNC has established a history of investing in new regions. Recently, it established a standalone store in Shanghai which has managed to attract thousands of customers in China (United States Securities and Exchange Commission, 2014). The organization’s development is a clear indicator that investment in foreign markets will help to attract new consumers and thereby increase sales. Strategically, the organization should target to establish a single standalone store in strategic areas in Africa, Asia, and Europe. Consequently, it will have established fifteen new standalone stores in three major continents. These stores will play an important role in stimulating new sales for the organization and are likely to steer the organization to unprecedented levels.
  2. Partnership: Previous partnerships with other organizations such as A1 Sports Limited and American Media, Inc have proved essential to the organizations. Partners have acted as links to markets and sources of information and have also helped reduce expenses such as the cost of the advertisement. The future of GNC is also dependent on the establishment of strategic partners in different parts of the world. The organization should envision the formation of at least one strategic partnership with major organizations in each of the eight continents within the next five years.
  3. Acquisition: Acquisition of other organizations is another strategy that should be applied by GNC to establish new markets. The organization should consider acquiring associated organizations, especially in Africa and Asia, where it has not been able to venture successfully over the previous years.

Goal 3

To increase the number of high-quality products currently offered in different markets.

Objectives

  • to increase the total annual sales
  • to compensate for lost customers due to legal challenges faced previously
  • to ensure that the organization retains its leading role in the retailing of nutrition-related products.

Discussion

The issue of quality is becoming one of the major challenges confronting the company. For example, in 2008, the corporation recalled sales totaling $57.8 million which was approximately 4.7% of annual sales that year (United States Securities and Exchange Commission, 2014, p. 15). These recalls triggered serious losses which reduced the total gross profit attained that year. With the establishment of strict guidelines by different state government agents, it is extremely hard for the organization to launch new products that are not subject to rigorous testing. Consequently, launching a new product is a daunting task that requires continued research by the organization.

However, the successful launch of any product by the organization can help stimulate sales by attracting new customers and retaining traditional ones. To establish new products, two forms of research will be required. First, the company must conduct marketing research to know what kind of product would be ideal for the market, and secondly, product research is necessary to know the kind of ingredients that can be applied by the organization to make a product that meets identified market needs.

Strategies

  1. Research: The organization must invest in marketing and product research. The reason is that this will avail information regarding market needs and aid in the preparation of a product that meets those needs. Additionally, the organization should invest in technological research, which will be important in identifying the kind of technology that can aid in the improvement of product quality at minimum cost.
  2. Cooperation with product developers: GNC also retails products manufactured by different developers such as Procter & Gamble Company (United States Securities and Exchange Commission, 2015). Some of these developers launch substandard products which are often causes of legal suits and confrontation with state administrators. These third-party products lead to wrong advertisements, are wrongly labeled and at times are contaminated. To avoid such scenarios, the corporation should engage the various product developers on matters of quality. Thus, this will be done by entering into sale agreements which requires that all product developers pledge to carry liability associated with the quality of their products.

Management Goals and Operational Goals

Goal 1

To minimize legal issues that have had serious negative implications for the organization.

Objectives

  • to ensure that litigation fees are brought to a minimum level within the next five years
  • to ensure that the organization will not be involved in legal battles in the future for issues that would have been avoided
  • to ensure that the organization does not lose more revenue on compensation, especially on avoidable circumstances

Discussion

Legal battles have been an inherent weakness of the organization since its inception. It is now time to handle this weakness and ensure that the organization’s future is free from unnecessary legal battles. Legal battles consume considerable amounts of time and resources. The organization’s corporate costs increased considerably in 2015 from $2.4 million to $70.0 as compared to those incurred in 2014. There were various reasons for this increase. However, the most significant one according to financial records was legal costs associated with litigation and compensations (United States Securities and Exchange Commission, 2015, p. 32).

Consequently, the organization must realign itself in a manner that will enable it to handle the rising costs of litigation and compensation.

Strategies

The following are strategies that should be applied to ensure that legal battles are brought to a minimum level and that few confrontations are experienced in the future.

  1. Establishment of a legal committee: The establishment of a legal committee will enable the organization to meet various requirements of the legal profession. Currently, there are more than thirty lawsuits filed against the corporation in various law courts within the United States (“Class action: GNC conceals dangerous ingredients in supplements,” 2015, p. 12). These suits can only be handled successfully through teamwork and corporation among legal practitioners and other members of the organization. The committee should also be charged with the responsibility of ensuring that legal battles are minimized by advising the organization on various matters and encouraging alternative means of solving confrontations.
  2. Strict adherence to quality standards through the empowerment of quality control department: Failure to comply with stipulated standards by different state governments and the federal government is the major cause of legal confrontations, as evidenced by Barrett (n.d.). Consequently, the organization must address its internal weaknesses by empowering the quality control department. Empowerment should include an increase in members of staff, additional test equipment, and training on existing quality standards. Additionally, this department should work hand in hand with state governments to ensure that substandard goods are not allowed in the market.
  3. Engagement of aggrieved parties: Owing to the time and cost associated with litigation, the organization should aim to establish alternative ways of resolving conflicts through the engagement of aggrieved parties. In fact, this can be attained by establishing the office of the ombudsman. As a result, this office can gather various parties and help minimize legal battles.
 

Goal 2

To establish, formalize, and clarify the best business practices for the organization.

Objectives

  • to eliminate illegal practices within the organization
  • to enhance service delivery at every level of the organization with the aim of attaining customer satisfaction.

Discussion

Best business practices within the organization are often ignored or assumed at different stages. Consequently, the organization has often been involved in numerous shoddy practices which have led to multiple legal suits. In order for the organization to depart from such practices, best business practices must be defined, formalized, and clarified to every member of the corporation. Outlining best practices will ensure that illegal practices are eliminated and service delivery is improved in the organization.

Strategies

  1. Charge the executive management with the duty of establishing, formalizing, and clarifying best practices: The organization must define in its structure offices which are charged with the duty of establishing best practices. Since this is a sensitive aspect of the organization, this role should be performed by the top executive management.
  2. Define roles associated with the implementation of best practices: The same as other organizational roles, people responsible for overseeing the implementation of best practices should be well defined. They should include corporation vice presidents, human resource managers, and departmental heads.
  3. Clarify consequences for failure to comply with best practices: The organization must also stipulate the consequences of failing to meet stipulated business practices such as disciplinary actions. As a result, this strategy will help deter people from engaging in illegal practices in the organization.

Goal Limitations and Means of Overcoming Them

Various challenges are expected in the implementation of goals stipulated in this strategic plan. This section discusses some of the challenges and suggests possible solutions to the said challenges.

Financial constraints. Some of the goals stipulated in this plan require massive resources. Such goals include product development, partnership establishments, acquisition, store expansion, and establishment of new stores in the foreign market. The organization’s budget is often constrained by recurrent expenditure, including annual expenses such as wages and salaries (United States Securities and Exchange Commission, 2014, p. 23).

Consequently, it is likely to face financial challenges in the course of implementing some of the strategic goals stipulated. Financial constraints can be overcome by incorporating alternative sources of funding. The organization can consider listing some of its shares for sale to other entities, getting loans from banks, incorporation of mortgages, and partnering with other organizations among others. Alternative funding will be essential for the organization in that it will help increase the rate of investment which is also likely to boost sales and profitability.

Legal handles. The operations of GNC are strictly being monitored by various federal agencies to ensure compliance with various legal requirements. In the past, these agencies have engaged the corporation in legal battles due to non-compliance with stipulated standards. Important federal bodies monitoring GNC activities include FTC, FDA, USDA, EPA, and CPSC. These bodies enforce compliance with federal laws associated with manufacturing, packaging, safe distribution, retailing, storage, and consumption of nutrition products (United States Securities and Exchange Commission, 2014, p. 22). In the past, some of these agencies have filed legal suits against GNC and forced it to withdraw some of its products from the counter.

Other legal handles are legal suits currently lodged in various courts within the United States. If successful, some of the suits are likely to lead top financial losses which may also have negative consequences on GNC. The firm can overcome these hurdles by ensuring strict adherence to stipulated standards, engaging various stakeholders, including manufacturers and federal agencies as well as seeking alternative resolution measures with aggrieved parties.

Resistance to change. Resistance to changes is another important challenge that may deter the successful implementation of this strategic plan. Most employees may be afraid of changes, especially because change poses uncertainties. The organization’s top management may also resist some of the proposed changes such as strict adherence to standards since this aspect has been largely ignored in the past as reported in 2012 (United States Securities and Exchange Commission, 2012). To overcome these challenges, the organization should engage in consultative forums, conduct adequate research, and engage various professionals in different stages of implementing the strategic plan.

Goal Implementation Tools

For the organization to successfully implement the proposed strategic plan and enjoy its benefits, various implementation tools must be applied. These tools will help institutionalize the strategic plan and align all members of staff to the strategy. In addition, the tools will help generate the support needed to achieve goals and objectives stipulated in the plan. Tools of successful implementation are discussed in this section. Zook and Allen (2010) outline four important tools of strategic goal implementation that are aligning support structures, planning, aligning the management structures, as well as measurement, accountability, and follow-up. The use of these four important tools is discussed in the following paragraphs.

Relevant Support Structures

The firm should be reorganized in a manner that supports the implementation of the strategic plan. In fact, this may include ensuring that the organization has the right leadership, prerequisite staff, and that all departments comply with the requirements of the strategic plan. Among some of the changes that may be essential in the early days of the implementation are strengthening of the quality control department and the establishment of important committees such as the legal committee. Without the necessary structure, implementation of the strategic plan will be hard and may even fail. It will be the responsibility of the top management to ensure that the organization is aligned with the strategic plan before its implementation commences.

Planning

For GNC to achieve stipulated goals and objectives, staff members and the top management must devise timely plans. These plans should stipulate specific courses of action and deadlines for each action. Additionally, the firm should prepare budgets for attaining specific objectives and goals. Plans should be designed in forms which stipulate specific strategies, actions, staff involvement and objectives, indicators of achievement, and evaluation measures. Plans should cover the five-year period stipulated in the strategic plan.

Management Process Alignment

The organization’s management process should also be aligned with the strategic plan. Previously, the firm has encountered conflicts resulting from a lack of streamlined management (United States Securities and Exchange Commission, 2015). New changes are eminent because the process will involve the input of various strategic partners. Management process alignment may include changing the management structure, stipulating staff compensation, outlining the roles of partners, and their compensation among others.

Measurement, accountability, and follow-up. The firm should stipulate steps that will be taken to measure the achievement of specific goals in the strategic plan. Measurement tools that may be applied at this level will be discussed in another chapter. Measuring success is important in that it helps the organization realign itself to remaining goals. In addition, the firm should stipulate follow-up activities to be conducted at every stage of the implementation. Finally, transparency and accountability strategies to be employed should be clearly stipulated.

Stakeholders’ Engagement

Various stakeholders have an important role to play in the implementation of the strategic plan. These stakeholders include strategic partners, organization managers, customers, and staff members. For the strategic plan to be implemented successfully, some of the stakeholders must be organized into different committees that will foresee the successful implementation of the strategic plan. This section outlines some of the important committees that will be established by the organization. The section also outlines the membership requirements of each committee.

Planning Committee

The planning committee will be charged with the responsibility of outlining specific courses of action to be taken, their deadlines, budgetary requirements as well as measurement strategies. Planning should commence prior to the implementation of the strategic plan. The planning committee should be composed of various staff members, top management of the organization, financial experts, and project managers. The importance of planning cannot be underestimated. It requires the input of different stakeholders and cannot be done in a haphazard manner. Project plans should include tabulated reports indicating various aspects earlier outlined. The tenure of the planning committee should run throughout the implementation of the strategic but should change the name to the project implementation committee.

Legal Committee

The legal committee is another important aspect of the strategic plan implementation process. As discussed earlier, the organization has previously been engaged in serious legal battles some of which have seen the organization’s defeat. Therefore, this committee will be charged with the responsibility of handling legal hurdles likely to be encountered during the process of implementation. In addition, it will be charged with the duty of handling specific legal objectives outlined in this strategic plan.

Specifically, the committee will be charged with the responsibility of ensuring that legal proceedings against the firm are minimized, future legal battles are avoided and strict adherence to stipulated legal requirements is taken into consideration. The committee will comprise the organization’s chief legal officer, financial officers, other members of staff working on existing legal cases, and professional lawyers hired by the organization.

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Research Committee

Another important committee will be the research committee. The committee will be charged with the responsibility of conducting preliminary research on proposed actions and presenting its findings to the project planning committee. It will conduct research on aspects such as products, market dynamics, and technology. The committee is expected to commence its work prior to the commencement of the implementation process. The research committee will comprise the organization’s technical team as well as selected members from the marketing department. Moreover, this team will have representatives in all existing subsidiaries of the organization.

Finance Committee

The finance committee will be charged with the responsibility of drawing budgets for the project implementation. In addition, it will ensure strict adherence to budgeted provisions and make necessary changes during the process of implementation. It will comprise the organization’s chief financial officer, members of the finance departments, internal and external auditors, and other members co-opted by the organization’s top management. The team will also make suggestions on alternative sources of finance needed to implement the organization’s strategic plan. It will work in collaboration with other teams to ensure that the strategic plan is successfully implemented.

Evaluation Committee

The committee will be charged with the duty of evaluating success attained in the implementation process. It will search for indicators of success and advise the organization accordingly. The committee will apply various tools of evaluation which are discussed in the next chapter. It will comprise the organization’s top management, project managers, external and internal auditors among other members of the organization who may be co-opted from various departments. The committee will work in collaboration with the project implementation committee to adjust implementation plans whenever a need arises.

Development and Compensation Committee

The committee will advise the organization on human resource requirements for the achievement of strategic goals. In addition, it will help realign the organization to the strategic goal. It will recommend salaries for key stakeholders in the implementation process as well as qualifications for various posts that may be required for the implementation process. The committee will also stipulate compensation for various strategic partners. It will also evaluate aspects such as acquisitions and mergers which are key components of the strategic plan implementation process. It will be composed of the organization’s top management, chief financial officer, a member of the implementation process, and other members who may be co-opted by the management.

Success Measurement

Project implementation is often characterized by many uncertainties and challenges. Consequently, it is important for project implementers to realize after the project is successfully completed. In fact, this stage of success measurement involves evaluating whether the individual goals of the project are attained and the extent to which they are satisfied. The phase involves applying different tools of evaluation which are discussed in greater detail within this section. The project planning stage involves defining various considerations that are used as tools for measuring success. This chapter defines various parameters that can be used as tools for evaluating success in an organization, as proposed by Eckes (2003, p. 65). Eckes’ tools of evaluation include project schedule, project budget, project scope, quality of work, and customer satisfaction.

Project Schedule

A schedule is a tabulated document that defines specific actions and their time of completion. Project schedules are important tools used as indicators and measures of success. During the evaluation process, schedules are used to assess whether a given action was completed or not. In addition, it is used to indicate the time the action was completed. Thus, a successfully completed project is characterized by the completion of all defined actions.

Project Scope

Completion of a project can also be indicated by the attainment of a predefined scope. A scope defines the extent to which a project is expected to attain. Evaluators measure success by assessing whether the project’s scope was attained or not.

Project Budget

The budget is another tool that can be used by project evaluators to determine whether a project was successfully completed. A project that is completed within the budgetary provisions is a good indicator of successful completion. However, a project that is completed far below the budgetary provisions is likely to be incomplete.

Project Team Satisfaction

Various teams charged with the responsibility of implementing diverse aspects of the project can also be used to evaluate success in project implementation. Such teams often set timelines and expectations which are not necessarily documented. The evaluation of whether such teams are satisfied with their own achievement is therefore an important indicator of success. Unsatisfied teams can be indicators of problems in the implementation process and would mean that certain failures were encountered in the process.

Quality of Work

The evaluation of the quality of work is an important indicator of success. Project evaluators often determine work quality using various standards such as ISO standards. Excellent work quality indicates the proper utilization of resources and is an indicator of success.

Customer Satisfaction

The ultimate aim of every project is to meet certain customer needs. If a customer is satisfied with the work achieved, then the project can be said to be successfully completed. GNC’s satisfaction would be the greatest indicator of successful implementation.

Conclusion

General Nutrition Corporation Strategic Plan 2016-2020 is documentation that focuses on the firm’s strategy of development within the next five years. The document analyzes GNC’s position in the market and identifies various goals and objectives that can be attained within five years to ensure that the organization remains profitable, relevant, and competitive in the nutrition industry. The document also recognizes inherent weaknesses in the organization and proposes strategies to mitigate them for the benefit of the firm.

Additionally, the strategic plan outlines various roles to be played by different teams in the organization to ensure that its strategic goals are successfully implemented. The document comes to a close by presenting various tools that the organization can use to evaluate whether the plan is successfully implemented. The document was prepared following rigorous research which included analysis of secondary data and collection of primary information from various stakeholders.

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