Case_Study

AVON- A GLOBAL COMPANY FOR WOMEN EXECUTIVE SUMMARY/ABSTRACT Avon is a powerhouse in the beauty industry with over $10 Billion in sales and claims its stake as being the largest direct seller in the world. After performing extensive research on the company using multiple online tools, journals, articles and texts, we have collected enough evidence to make recommendations as to how Avon can continue its global expansion while still maintaining long and short term company objectives and staying within core competencies. We believe Avon can and should expand strategically into each of the BRIC countries while also leverage the power of the technology and the Internet to increase business through social networks. OVERVIEW History and Background In 1886, thirty four years before women in the U.S. had even had the right to vote, a visionary entrepreneur named David H. McConnell had the extraordinary idea to found a business based on the premise of giving women an opportunity to earn money outside of the home and build financial independence. From that one idea to a company of over six million representatives in over 100 countries across the globe, the company has grown and prospered (Avon, 2010). Currently, Avon is a leading global beauty company, with over $10 billion in annual revenue. As the world's largest direct seller, Avon markets to women in more than 100 countries through 6.2 million independent Avon Sales Representatives. Avon's product line includes beauty products, as well as fashion and home products, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals, and Mark. Ticker AVP (Avon, 2010). Mission Statement “The Global Beauty Leader We will build a unique portfolio of Beauty and related brands, striving to surpass our competitors in quality, innovation and value, and elevating our image to become the Beauty Company most women turn to worldwide. The Women's Choice for Buying We will become the destination store for women, offering the convenience of multiple brands and channels, and providing a personal high touch shopping experience that helps create lifelong customer relationships. The Premier Direct Seller We will expand our presence in direct selling and lead the reinvention of the channel, offering an entrepreneurial opportunity that delivers superior earnings, recognition, service and support, making it easy and rewarding to be affiliated with Avon and elevating the image of our industry. The Best Place to Work We will be known for our leadership edge, through our passion for high standards, our respect for diversity and our commitment to create exceptional opportunities for professional growth so that associates can fulfill their highest potential. The Largest Women's Foundation We will be a committed global champion for the health and well-being of women through philanthropic efforts that eliminate breast cancer from the face of the earth, and that empower women to achieve economic independence. The Most Admired Company We will deliver superior returns to our shareholders by tirelessly pursuing new growth opportunities while continually improving our profitability, a socially responsible, ethical company that is watched and emulated as a model of success” (“Corporate Responsibility Report”, 2009). Social/Corporate Responsibility Avon’s core values—trust, respect, belief, humility and integrity. Avon has been committed to advancing women since the company was founded in 1886, and philanthropy has always been a strong part of their heritage. In 1955 the company formalized philanthropic efforts with the creation of the Avon Foundation, which advances the mission to improve the lives of women and their families (“Corporate Responsibility Report”, 2009). The Avon Foundation’s first grant, more than half a century ago, was a single scholarship of $400. The Foundation’s main efforts are today focused on the critical issues of breast cancer and domestic violence, and Avon global philanthropy is advancing these causes in more than 50 countries. As committed global citizens, Avon and the Avon Foundation also support emergency and disaster relief, while a scholarship program for Avon associates and Sales Representatives maintains the tradition of supporting education. Avon’s commitment to the environment has been deeply rooted in Avon’s principles for more than a century. At locations worldwide, they remain committed to reducing our global environmental footprint, including the issue of climate change, by recycling, reducing waste, conserving energy and water, and monitoring and reducing greenhouse gas emissions. New Avon facilities are developed using green building standards. To help drive institutional and individual “green” behavior, Avon launched Hello Green Tomorrow in 2009 to empower a global environmental movement to nurture nature. In 2004, they established environmental goals and targets for 2008 and have made progress in pursuit of these goals. A Director of Corporate Responsibility is based in the Avon global headquarters in New York City, and collaborates with management in a wide array of relevant departments that support the many pillars of corporate responsibility, including human resources, environment, supply chain, research & development, the Avon Foundation and much more, both in the United States and around the world (‘Corporate Responsibility Report”, 2009). BUSINESS ANALYSIS Core Competencies Stronger brand. Avon’s iconic brand has 90% awareness across the globe and sells four lipsticks every single second of the day. To maintain that advantage, Avon has elevated their focus on innovation and sustained advertising investment at almost triple the rate of 2005, even in the face of macroeconomic challenges. Stronger channel Avon’s Sales Leadership — through which Representatives earn by both selling and recruiting — has been rolled out to approximately 50 countries worldwide. They have also launched the global Internet platform to help Representatives manage their business online. Stronger Cost Management Due to the restructuring plans of 2005 and 2009, and cost transformation programs delivering well ahead of initial expectations, constant turnaround mentality is now fully embedded in the organization. Avon is expecting an operating margin improvement in 2010. Stronger organization The company has made significant progress in its evolution from a confederation of local businesses to a fully integrated matrix of global and commercial business units. Avon has effectively leveraged its global strength in marketing, sales and supply chain, while also remaining flexible and responsive to local consumers and Representatives (Avon, 2010).