2. For your industry, estimate how much power each of the 5 forces has (suppliers include their employees and suppliers of technology). How do they reduce the buyer and supplier power? How do they create switching costs and entry barriers?
Although Jenny Craig is a successful weight management company they have to continue to be innovative to prevent other companies from getting a competitive advantage. The 5 Force Model helps businesses to understand the competitive pressures of their industry.
Buyer Power is when when buyers have many choices from whom to and low when their choices are few. Jenny Craig keeps buyer power low by offering her clients a personal one on one program and low calorie food choices that are unique all in one. Consultants personally walk clients through their Jenny Craig experience. Also, by joining the program you become a part of a community of active members through on line access and can receive coupons for future purchases.
Supply power is the opposite of buyer power. This is when buyers have few choices. As a supplier of a business the goal is to have buyer power to be low and supplier power to be high. Jenny Craig's supply chain suppliers include food suppliers, shipment companies, employees, IT, etc. Jenny Craig is also a supplier to their customer once an order is placed. Supply power is low because there are few companies that are supplying and shipping food.
Threat of Substitutes is high when there many alternatives. One Jenny Craig avoid these threats is to through switching cost. One of the ways to avoid switching cost, Jenny Craig has created one stop shop for her clients. By switching to another company customers may have to pay a cancellation fee and miss out on the Jenny Craig experience. There is a one year commitment and prices vary depending on the package selected but there are many perks that come along with membership.
Threat of New Entrants is when it is easy for a new competitor to enter a market. There are many other weight management companies that are similar to Jenny Craig. They threats are by marketing program prices. Also the food menus are Jenny Craig's menus are designed by our Registered Dietitians to meet the USDA Dietary Guidelines.
Rivalry among existing Competitors is high when competition high and low with competition is complacent. Just recently Weight Watchers were at odds with Jenny Craig because of a recent commercial. Jenny Craig's celebrity spokesperson said that they are more effective and this caused a battle. The rivalries between these two companies were eventually resolved.
3. For your company, what major business initiatives are used or being considered? What software is used? Are they top-line or bottom-line initiatives?
The major businesses initiatives used at Jenny Craig are Customer Relation Management and E-Collaboration. CRM system is an information integration system that is able to share all the customers’ information such as history, or payment status through all the departments such as sales, marketing, or customer service. In order words, the company uses multi-channel services with its customers where they are able to interact with sales representatives and customer service personnel through several communication systems such as e-mail, fax, web, etc. The customer relation at Jenny Craig starts with a professional interview where the program director will interview “Your Style Profile” – eating habits. It is followed by occasional one-to-one support assistance where a consultant will make sure the costumer is satisfied with the provided services and also maintain the client motivated to achieve its weight loss goal. Through costumer’s interviews and feedbacks, the company is able to gather import information of customers needs and wants to better assist them and also devise more efficient advertisements to catch new costumer’s attention to their services.
In addition, Jenny Craig uses e-collaboration in order to improve customer relations and teamwork. E-collaboration is a use of technology that support and improve work activities, management systems, or social networking. Jenny Craig has used Wyse software to enhance communication among the company departments, so the information can be accessible to the majority of employees. Since Jenny Craig affiliates are spread over five countries and several US states, it was imperative for them to create integrated collaboration environments (ICEs). Thus, their teams have better access to information through the systems to elaborate projects, make decisions, etc. Jenny Craig is also on social networking sites where users share diet experiences, lifestyle change, food recipes, etc.
Jenny Craig is using SIEBEL software. As it states, “Oracle has announced that Jenny Craig…has expanded its relationship with Oracle to standardize on Oracle's Siebel CRM to help increase business growth, improve overall efficiencies, gain a 360 degree client view across all sales channels and trim the fat from its operating expenses. Using Siebel CRM, Jenny Craig will be able to automate business processes for sales, inventory, reporting, calendar and scheduling, company officials say.”
Jenny Craig focuses on top-line business initiatives. For instance, their customer relations is taken very serious because once their customers are satisfied, they will probably recommend the company for somebody else interested on improving eating habits. Thus, increasing customers, market segments, offering new services/products are goals to increase to-line business initiative.
Jenny Craig uses matrix IT system to better communicate among employees and all the other departments. With matrix approach everything is collaborative across the organization throughout all the departments. Jenny Craig uses centralized, wait-and- see philosophical approach which means that before they adapt to new technology they require demonstration of significant return on investment. They are not looking for significant growth.