GNC Holdings, Inc.
Operations/Supply Chain Management Overview and Analysis
GNC was founded by David Shakarian in 1960s, and specialized in yogurt and other healthy food such as honey, grains, and “healthy sandwiches”. Due to increasing demand, GNC expanded stores throughout the United States during the 1970s. However, the emergence of other competitors in the external environment and poor management internally lead to a difficult period of time for GNC during the 80s. After Jerry Horn took over as President and implemented major changes in 1985, GNC had a fresh start and continued to grow. GNC is now the largest global specialty retailer of nutritional products: vitamin, mineral, herbal, and other specialty supplements as well as sports nutrition, diet, and energy products. Order winner:
GNC not only provides top quality products but also provides the top quality in customer service. GNC’s order winner is top quality. GNC provides superior levels of performance in their products by having a “truth in labeling policy.” High attention to research and new scientific discovery aids in GNC’s principle of quality first. They are “constantly updating formulations to optimize quality, efficacy, and deliver of active ingredients” (GNC Livewell). The GNC brand goes through several checks to ensure quality including: raw materials testing, purity testing, potency testing, product freshness and package integrity, product traceability, and microbiology testing (Quality you can trust).
1. Better real-time information about material requirement and production schedules 2. Find ways to keep drawing in potential new franchisees to sell the finished goods 3. Continued observation of franchise compliance with GNC’s policies
The Increase in internet businesses within the supplement industry has brought on distinctive competitive priorities, low prices, and many brands with similar products. SWOT analysis
1.Real-time 2.Piece-picking Method3. Order customization
| higher price than some competitors
| a wider global reach than US-based online companies because of nice brand reputation
| other competitors’ lower price
GNC began in 1935 as a small health food store called Lackzoom, which was located in Pittsburgh, Pennsylvania. It was founded by David Shakarian, and specialized in yogurt and other healthy food such as honey, grains, and “healthy sandwiches”. Within six months, Shakarian had made enough money to open a second location, but both stores were destroyed by a flood in 1936.
Shakarian eventually was able to reopen both locations, and within five years, had even expanded to six stores in the Pittsburgh region. During the 1960s, the demand for natural foods and improved nutrition grew, and Shakarian met that demand by opening stores in other states. With these changes came the new name of the chain: General Nutrition Center (GNC).
The 1970s brought along further demand for new “miracle products” which claimed to improve mind and body, which fueled the company’s expansion throughout the United States. Sales of the stores’ original offerings of health foods continued to grow, while vitamins and other supplements expanded to represent about fifty percent of the company’s sales. General Nutrition Centers also moved into shopping malls, giving the company a progressive image. GNC’s expansion was unhindered, thanks to the lack of direct competitors. The company also sold via mail-order. The company was publicly-owned by this time, but Shakarian controlled eighty percent of the stock.
The 1980s were unkind for GNC: supermarkets and drug stores began to hone in on GNCs market by carrying an increasing amount of health foods, in response to growing consumer demand, as well as larger selections of vitamins, which...
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