Essay Example: Medifast Strategic Management Plan

For an organization to be successful, there are factors to be adopted to avoid failure in future operations. The external environment is a factor that influences the industries and firms within the society. The external environment has segments, such as the political environment, social and legal environment, among others. Political factors play an important role in determining the choice of location to operate. The firm considers a number of factors before setting up a branch in a certain country or region. Some of the factors they consider are the political stability of that country, the level of corruption, risk of military invasion among others. This enhances the growth and development of the organization as it is established in areas where the business is likely to thrive (Leigh-Hunt 2016). The policies set by the government are genuine as they encourage more people to engage in business. Policies such as the HITECH (Health Information Technology for Economic and Clinical Health) Act, which advocates for the adoption and meaningful use of health information technology have enabled the firm to use modern technology.

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Another segment is the economic environment, which includes factors such as lending rates. Currently, the interest rates at the country are lower compared to many nations. The rates have been steady for an extended period and are forecasted to remain the same (Wang, 2019). The level of inflation at the moment is low and is projected to increase in the next financial year slightly but will still be moderate (Wilson et al. 2015). The firm will not be adversely affected by the current or the expected level of inflation as it is relatively low.

There is an increasing desire by people to live a healthy life, therefore, positioning Medifast Inc. in a suitable position to operate. Income distribution of the target market is even and considered steady because of the increase in the number of clients over the years. Medifast Inc. produces effective goods and services, which has made the clients develop a positive attitude towards the organization (Coleman et al, 2015). The firm has adopted and incorporated modern technology in its operation to ensure that the quality level of its products satisfies customers’ demands. The adoption of technology has also given the firm a competitive advantage as the production rate is consistent with the quality of the goods produced.

Medifast Inc. is a global company that offers its services in the United States and the Asia-pacific region. The delivery of its products has been unhindered until recently owing to the global pandemic. It has resulted in the restriction of movement, which mainly affects the two main markets of their products. Before the epidemic, the international relations between the national government and the trade laws among the target countries enabled the organization to perform its operations smoothly. The social environment surrounding the firm allows for it to conduct its services because they do not interfere with the beliefs, the norms or the practices of the people around it. It has enabled the firm to operate in the areas they target and, gives them the possibility to expand to most parts of the world, which is advantageous as it will provide the firm with the ability to set up their services in many countries.

Medifast Inc. does its operation under the laws and regulation by abiding with the code of conduct and ensuring that all the goods and the services offered by the company are ethical. The firm ensures that they do not brush hand with the law and reduce dispute from other firm’s with regards to intellectual property rights.

Industry Environment

Industry environment means the factors that affect the industry that results from its competitors. An enterprise should aim to be ahead of its competitors in its operation. One of the factors to consider is the distribution channels. Medifast Inc. adopts various distribution channels that include the web and national call centers, personal health coach division, the weight control centers and national network of physicians (Lin et al,. 2015). By utilizing these methods, the company ensures that it serves a significant portion of its target market. Medifast Inc. operates in two different market segments which include Medifast segment which include parts of sales from the firm’s direct marketing and the wholesale section that consists of the company’s wholesale physicians and international sales. The firm strives to deliver quality goods and services to its customers. It takes high-end measures to ensure that the quality of its products is consistent all the time. The company acknowledges the satisfaction of its customers to the quality of goods and services and strives to be a technological leader at all times. The organization adopts new technology and manages the current trends to ensure they are ahead of their competitors while also forecasting the newly emerging technological advances. Use of technology has made the company have a steady supply of goods to fit their demand and produce high-quality goods.

Target Market

The organization’s main targets are women aged 30-50, who are having problems with losing weight (Pinxter Analytics, 2019). Medifast Inc. products are suitable for all age groups and aim at controlling the weight of the customers. The products suit those who wish to lose weight but are having troubles preparing their meals or following the diet they should be taking. The company mainly sells its products in North America. In recent times, the company has penetrated the Asia-pacific region, which has the fastest-growing demand for health and wellness products. The firm attracts interest from its customers by having products that are differentiated. Medifast Inc. products have unique characteristics and features that make their product appealing.Another factor the company uses to reach its target market is cost leadership. It is made possible by reducing the operating cost to a level below the competitors which will result in reduced prices of their goods, therefore, attracting more people to purchase their products. The company also focuses on healthy products which aid in weight loss, thus giving them the advantage of producing a specific type of product rather than produce various kinds of goods and services. The focus on one product ensures that they deliver products that satisfy the needs of the customers. The company also targets a small portion of the market which is beneficial considering that customer’s preference is taken into deliberation when developing their products, therefore, ensuring they look at all the opinions and feedback.

Needs of the Market

When setting up a company, one has to spot the gap in the market and attempt to fill it by starting the business. Medifast Inc. spotted a gap in the fitness industry and did find the solution to the problem. In the current society, the desire to be healthy and fit is high, thus, raising the need to maintain a healthy diet. The needs of the market, in this case, is to be fit and live a healthy life. The goods and services provided at Medifast Inc. play an essential role in helping a person live a healthy life. Defining your target market is vital for every business survival because the target market will provide valuable information about the products of the organization. They use the feedback obtained to continuously improve the goods and services of the organization, therefore, ensuring that they stay ahead of the other business in the same industry. The firm identified what the specific group of people wanted and came up with goods and services that satisfy the desires of the target market.

To understand your target market well, a company has to have a way of engaging with the customers. Medifast Inc. keeps the contact information of its customer, enabling them to identify the customers using their preference. This information is useful as it allows the organization to identify loyal customers who get rewarded according to the number of purchases they make. To define the needs of the market, Medifast Inc. engages its customers to provide information on the price they are willing to pay and the new products that it introduces to the market (Lin et al,. 2015). This information helps the company in planning and developing their strategies because, with the details they have, the company can analyze it to determine the overall needs of the market. Medifast invests time and capital in defining the needs of the market. They segment the market into a smaller group that will be easy to study, thus, enabling them to collect information about the segmented group, they then target the specific group which is more attractive to the investor in terms of profit and, position themselves to produce products they feel the target market will purchase

Importance of Diversification

Diversification is the action that an organization takes to produce a variety of goods and services to its customers (Dhir, 2015). The role of diversification is to serve the market with different products that satisfy the various market demands. Diversification helps to reduce the impact of market instability by producing a wide range of goods which increases the customer base, therefore, reduce the effect that results from a specific product failing to perform well in the market.

Diversification helps the investors achieve their long-term investment plans because if the market stability has a positive impact on the sales of the goods, the investors will be able to generate higher income. It happens when the various goods and services produced by the firm attracts excellent attention from the target market, leading to an increase in demand for the products. Medifast Inc. deals in a variety of products which generates income that is beneficial to the investors. Diversification also helps to secure investors capital because when one invests in a firm with a single line of product, failure of the product to perform well means that there is a risk of losing the capital invested. Medifast Inc. produces a variety of goods and offers different services, therefore, ensuring the investors’ money is secure as there is a cushion in terms of sales of their products. Investing in a company that deals in a variety of products gives investors’ peace of mind as the capital invested is divided into several products and will therefore not worry about the performance of a particular product. Diversification also exposes an investor to more opportunities for generating income by subjecting to the various benefits ways in which they can generate income.

References

Coleman, C. D., Kiel, J. R., Mitola, A. H., Langford, J. S., Davis, K. N., & Arterburn, L. M. (2015). Effectiveness of a Medifast Meal Replacement Program on Weight, Body Composition and Cardiometabolic Risk Factors in Overweight and Obese Adults: a Multicenter Systematic Retrospective Chart Review Study. Nutrition Journal, 14(1), 1-15.

Dhir, S. (2015, November 17). Diversification: Literature Review and Issues. Strategic Change, 24(6), 569-588.

Leigh-Hunt, N. (2016). Understanding Organisations: The Impact of Political, Economic, Socio-cultural, Environmental and Other External Influences.

Lin, G., Wei, W., & Zhu, W. (2015). The Principle of Profit Models. Springer.

Pinxter Analytics. (2019, July 30). Medifast Weight Loss Heavyweight. Seeking Alpha.

Wang, Y., & Ni, X. S. (2019). Modeling Default Rate in P2P Lending via LSTM. Preprint

Wilson, M. J., Cervantez, J. W., & Padula, S. (2015). Patent and Trademark Office. U.S. Patent No. 8,973,633. Washington, DC: U.S.