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Case Analysis - Avon

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Ellesmere Port

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  1. Introduction
  2. Overview of the Company's Structure Today
  3. Company Mission Statements
  4. Vision
  5. Values Adapted by Avon
  6. Strategies
  7. Competitive Profile Matrix
  8. Conclusion

Avon is one of the most popular household brands in America, and with the business structure given, it has many opportunities to expand its operations even further. Avon products are well known all over the world, and the reputation of the company does allow the firm to recruit more direct selling agents and train them at a low cost. There is an increasing number of new similar firms in the cosmetics market, who are looking to increase their international market share, as well. Most of them are looking to differentiate their services and products by making them greener, more affordable or exclusive than AVON. Still, there are many opportunities lying in the company's reputation and if they use their competitive advantages the right way, they would be able to improve their operations, so customer satisfaction will be increased and the cost of operations can be reduced at the same time.

Avon has always tried to create affordable but high quality products, which were good alternatives to the makes and versions customers could buy at department stores. The leadership has always listened to their agents, who let the company know about the demand for new innovative products. Although the company is working hard to keep up with the developments of the competitive market, they have recently moved their operations to the Internet as well. The study will examine how the mission statement and business priorities of the company have changed after the changes made within the company structure and whether the changes are pointing to the right direction. The training and recognition system of AVON has a high importance in the company's success, as the main sales funnel is still using independent agents all over the world to promote products and service customers. The infrastructure behind the operations and agents' support is equally important, therefore, it needs to be analyzed. International and cultural issues would have an influence on the market share of the company.

[...] Overview of the Company's Structure Today Today, Avon's operations are still based on direct sales. However, they have somewhat changed the structure of the sales funnel, and due to the competition's movements on the home employment field they managed to improve their service provided for independent agents. In the market analysis below, it will be evident that there is an increase of home-based cosmetic agent job offers, due to the economic climate. Avon can create a competitive advantage on the market, if they are able to stay up to date with the new market initiatives for both products and services and training provided. [...]

[...] There are three different product areas of the company today: home, beauty and fashion. The strongest being the beauty product area, they would need to look for ways of improving the two other product ranges, to be able to create a company that can match the needs of different markets. The advertising costs are not equally distributed throughout the three different areas of manufacturing, and the company needs to ensure that they change the public image of the firm from being solely a cosmetics manufacturer and distributor to a strong multinational firm that has the competitive advantage of creating value in every aspect of women's lives. [...]

[...] The price competitiveness can only be increased if the company moves its operations and creates operations management strategies for more cost-effective distribution, packaging and promotion, based on the successful examples shown within the Herbalife organization. Making use of the sustainable methods of production, lowering carbon footprint of the production should be one of the main priorities of the company to be able to continue growth through the 21st Century. Ratings: 1 Poor Average - Above Average Superior Strengths-Weaknesses-Opportunities-Threats Strengths: The company has many strengths on the market. First, we need to analyze the reputation of the company on the global scale. [...]

[...] The core value is emphasized, and this is extremely important for a global direct sales company. However, the four other core values are mentioned as well, the document reviewed creates clear global policies regarding customer service, development, corporate responsibility and compliance. The level of competence needs to be level across the whole organization, and this requires advanced communication from the leadership, continuous training and development. However, the proposed vision statement of the company is based on different values and shifts the importance on sustainable operations: become the leading provider of home, fashion and beauty products and continuously satisfy customers' needs, moving to more sustainable ways of producing cosmetics, developing products and delivering goods.? Strategies Before examining the strategies of Avon, it is crucial to create an organizational chart and review the procedures within the company. [...]

[...] The main competitors of Avon on the cosmetics market are Revlon and Mary Kay, however, the analysis needs to consider other direct sales companies, such as Herbalife. (Cosmetics market research. 2007.) In newly emerging economies, like Russia, there is an increase in direct sales, and this means a higher competition on the market. Market Analysis Although the emerging into new markets of the company has not been simple, and in 1999 they had some difficulties with their operations in China (Albaumm and Duerr, 2008), they managed to bounce back and increase their sales. [...]

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