...Le’Shundia K.Porter August 1, 2012 HRM 532 Assignment 2 Avon Products Dr. Sue Lowe Abstract Avon is the company that stands for beauty, innovation, and optimism, and above all for women. Avon Products, Inc. Avon is based in New York. The company appoints the manufacture and marketing of beauty and complimentary products primarily in North America, Latin America, Europe, and Asia Pacific. Avon’s products are classified into three product categories: Beauty, Beauty Plus, and Beyond Beauty. The Beauty category consists of cosmetics, fragrances, skin care, and toiletries; Beauty Plus includes fashion jewelry, watches, apparel, and accessories; and Beyond Beauty comprises home products, gift and decorative products, candles, and toys. Andrea Jung became president and CEO of Avon in 1999 and has totally makeover the company. Under her leadership, the company has updated its product line, launched new advertising, and created a new image. Avon’s sales have increased by 30 %, profits 40%, and the stock price has dramatically improved. Jung’s has been able to align the firm’s core capabilities with its strategic targets which has lead to outstanding results. It appears that Jung has been able to establish a clear vision for the firm that has been incorporated in every aspect of the firm’s operating system. This vision is shared by all employees and representatives of Avon motivate the company for continued success. Provide a brief description...
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...[Type the company name] | AVON PRODUCTS CASE STUDY 1 | [Type the document subtitle] | | Pamela | [Pick the date] | Abstract Avon Products, Inc was a leading global cosmetics company, with over $8 billion in annual revenue in 2005. As the world’s largest direct seller, the company marketed to women in 143 countries via five (5) million independent Avon Sales Representatives. Avon product lines included numerous popular brand names, and an extensive line of costume jewelry and clothing. Although revenues increased in 2003, 2004 and 2005, Avon’s net income was $848 million in 2005. The company met with stiff competition in the US market from other cosmetic companies. In order to maintain its market share in the US while targeting other countries, especially China, the company drastically changed its global operating structure. This brought senior management closer to its key business geographies, strengthened global integration, accelerated information flow and positioned the company for sustainable growth. Avon expected to incur costs to implement these initiatives over the next several years, with a significant portion of the total costs to be incurred during 2006. Benefits from restructuring helped to fund a notable increase in consumer investment and improved the competitiveness of its direct selling opportunity. Additionally, the company increased investment in advertising, marketing intelligence, consumer research and product innovation. The cosmetics mogul...
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...WHY AVON COMPANY IS CONSIDERED THE NUMBER 1 DIRECT SELLING COMPANY? Master of Management Peter F. Drucker once said: “What an enterprise is, is decided by the customers”. For a successful Direct Seller, in addition to treating himself/herself as part of the business body to accurately reflect enterprise image and concept, it is more important to clarify and satisfy real customer’s need through sincere and objective mind. This is also the most important spirit of Direct Selling and is the reason why an excellent Direct Selling company stays strongly in the market. Direct Selling can be divided into single level Direct Selling and multi-level Marketing; however, in recent years, to cope with the change of industry environment, some of the Direct Selling companies such as Avon started to shift its strategy toward the development of multiple channels for Direct Selling. We hope, through this study, to understand the business operation system and planning in Direct Selling and compare the advantages, disadvantages, opportunities and threats of different business systems. One of the very significant factors for effective sales performance is the marketing strategy. Marketing is a social and managerial process by which individual obtains what they need and want by creating, exchanging and offering product and services with value to others. This study is all about the strategy that a company, like Avon, will need in order to have an effective sales performance which made them...
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...Topics: Strategy, Changing Markets, Cash Flow _______________________________________________ Avon’s Investments Fall Short by Hannah Karp, Wall Street Journal, December 8, 2011 QUESTIONS: 1: Briefly describe the main points of the article. The article highlights Avon Products Inc.’s financial and regulatory woes. Avon’s wide and persistent gap between net income and free cash flows have been highlighted as the main reason for the company’s problems. The gap indicates that the company's investments aren't paying off very well and that its net income doesn't fully reflect depreciation and other costs of those investments. Other problems like computerized supply-management system in Latin America, Avon's direct-selling model in China and not being able to understand the American consumer have all led to a shortage of free cash flow. The article also talks about Avon being under the scrutiny of Securities and Exchange Commission for allegations of bribing foreign officials and improperly disclosing information to Wall Street analysts. 2: How are Net Income and Free Cash Flows calculated differently? What does it mean when the article states “free cash flow and net incomes tend to balance out over the long run”? * Net income amounts to revenue minus costs and the depreciation of a company's assets * FCF = NOPAT (Net Operating Profit after Taxes ) - Net investment in operating capital When the article states “free cash flow and net incomes tend to balance...
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...CAN ODABAŞ Avon Company Overview The first Avon lady book salesman was David McConell. He launched Avon Calling in 1886 as offering women cosmetics in the comfort of their own homes, however, perfumes and hand cream were not McConnell’s products. When he was sixteen, he started selling books door to door. In his travels as a book salesman, McConnell made two important discoveries. Firstly, he noticed that his female customers were more interested in the free perfume samples he offered than they were in his books. He made these fragrances himself to serve as door openers when he traveled from home to home. Secondly, McConnell saw women struggling to make ends meet and recognized in many of them natural salespeople who would easily relate to other women and passionately market the products his new company would first sell perfumes. Then, the choices of customers affected McConnell and he established the California Perfume Company in the NY. Today Avon, the company for women, 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 approximately 6.5 million active 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. Each representative distributes a product catalog to their...
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...AVON PRODUCTS, INC.: DEVELOPING A GLOBAL PERSPECTIVE INTRODUCTION “When the history of this organization is written,” noted James E. Preston, chairman and chief executive officer of Avon Products, Inc., in February, 1993, “a meeting last June in Florida of 60 managers from around the world may turn out to have been a watershed event. Our four days of brainstorming, debate and discussion brought to an end two years of research and examination of our basic businesses, and launched us on a new way of thinking about and managing those businesses.” Preston was excited about the new direction taking shape at Avon. The past several years had been difficult for the organization. Hostile takeover attempts plagued the firm during the 1980s. Avon sales volume in the United States and international markets showed little or no growth. Profit margins on many products declined due to price discounting by competitors. Turnover rates of sales representatives had increased. The corporate debt was referred to as “staggering” at $1.13 billion or 82.5% of total capital in 1988 (See Appendices A, B, and C). Preston was confident, however, that 1993 would be a year of improvement for the company, both in financial performance and in the progress made “repositioning ourselves as the woman’s company for the Nineties and beyond.” Avon’s research department informed management that corporate problems centered around image and market access. That shaped the agenda of the June, 1992, meeting in Florida:...
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...TOPIC6: Avon in Global Markets in 2009: Managing and Developing a Global Workforce Discussion Questions 1. Referring to this chapter and Chapter 9, evaluate Avon’s Strategic International Resources practices in global markets regarding development of a global management cadre, HCNs, and building company associates and independent representatives in host countries. 2. Describe how Avon’s business model has changed in light of demographic and social changes in the United States and abroad. What role has IHRM played in the company’s global expansion? 3. Avon’s future global expansion is contingent on hiring and retaining the best workforce and salespeople in global markets. What training and cross-cultural strategies do you recommend to the company to deal with this area? 4. What are the cross-cultural implications for management that you learned in this case? Or what are the major cross-cultural impacts for management present in this case? 5. Executive Summary 6. Avon Products, Inc. (Avon) is based in New York. The firm engages in the manufacture and marketing of beauty and complimentary products primarily in North America, Latin America, Europe, and Asia Pacific (Yahoo Finance, 2005). Avon's products are classified into three product categories: Beauty, Beauty Plus, and Beyond Beauty. The Beauty category consists of cosmetics, fragrances, skin care, and toiletries; Beauty Plus includes fashion jewelry, watches, apparel, and accessories; and Beyond Beauty...
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... Current Strategy 10 Advertising and Representative Value Proposition (“RVP”) 10 Product Line Simplification(PLS) 10 Strategic Sourcing Initiative 10 Enterprise Resource Planning System 11 Zero-Overhead-Growth 11 Restructuring Initiatives 11 SWOT Analysis 13 Strengths 13 Weaknesses 15 Opportunities 17 Threats 22 FINANCIAL INFORMATION 23 SUMMARY OF RECOMMENDATIONS 25 Technology and Social Media 25 Focusing on International Growth- the BRIC Countries 27 Brazil 28 Recommendations for Brazil 33 Russia 34 Recommandations for Russia 40 India 41 Recommendations for India 46 China 47 Recommendations for China 53 Conclusion ………….…………………………………………………………………………………….54 REFERENCES 55 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...
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...INTRODUCTION: Avon is a world largest leading manufacturer of beauty and home products organization. The company was as established in 1886 under the name of California Perfume Company (CPC) and then was changed to Avon Product, Inc in 1939 by the same founder David H. McConnell and remained the same to current period. Avon is a globally famous and successful in its direct selling strategy if selling door to door, the company creates more than $10 billion in annual revenue. Avon Company has acquired a strong and attractive brand portfolio that attracts multiple of customers around the world. The company is selling in more than hundred countries operated with forty six thousand employees and has over six million representatives. Avon is a multi marketing company. The company chairman and CEO is Andrea Jung who was promoted to the position in the year 1999. She is so far in the position of CEO for twelve years as is considered to be the longest termed female CEO among five hundred companies. Avon was primarily directed for female customers; however the company expanded its products line and now offers varieties of products including male, toys and home products. The company is largely under control of women and serving under the goal of women empowerment and continues to help women by providing fund for education purposes and researches such as for breast cancer. 1) Evaluate Avon’s Strategic International Human Resources practices in global market regarding development...
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...A REPORT ON AVON PRODUCTS Submitted to: Submitted by: Mr. Vikas Anand Neha Sharma Faculty, LPU RR1002B37 11009270 COMPANY PROFILE Avon Products, Inc. (NYSE: AVP) is a US cosmetics, perfume and toy seller with markets in over 140 countries across the world and sales of $9.9 billion worldwide as of 2007. AVON PRODUCTS was founded in 1886, Inc. (Avon) is the largest direct seller of beauty and beauty- related products. With $10.7 billion in annual revenues in 2008(up 8% from 2007), Avon and its approximately 42,000 associates now serve valued customers in more than 100 countries worldwide. Our primary distribution channel is direct selling by our more than 5.8 million Avon sales representatives. Together, these ”Avon ladies” as they are affectionately known, help us to reach millions of customers around the world and handle upwards of one billion transactions annually. Company style Avon Products is a multi-level marketing company. The company's chairman and CEO is Andrea Jung, who was promoted to the position in 1999. She has completed a decade as CEO and is the longest tenured female CEO among Fortune 500 companies. Avon uses both door-to-door sales people ("Avon ladies," primarily and a growing number of men) and brochures to advertise its products. In the United States, products may be found through Representatives...
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...GLOBAL ANALYSIS- AVON MGT 795: Section G11 Professor: Patrick Saparito Jennifer Callaghan J.R. Longino Rasa Navickaite Meghan Quinn Lia Torre Table of Contents EXECUTIVE SUMMARY/ABSTRACT 4 OVERVIEW 5 History and Background 5 Mission Statement 5 Social/Corporate Responsibility 6 BUSINESS ANALYSIS 8 Core Competencies 8 Management Structure 9 Current Objectives 9 Current Short Term Objectives 9 Current Long Term Objectives 10 Current Strategy 10 Advertising and Representative Value Proposition (“RVP”) 10 Product Line Simplification(PLS) 10 Strategic Sourcing Initiative 10 Enterprise Resource Planning System 11 Zero-Overhead-Growth 11 Restructuring Initiatives 11 SWOT Analysis 13 Strengths 13 Weaknesses 15 Opportunities 17 Threats 22 FINANCIAL INFORMATION 23 SUMMARY OF RECOMMENDATIONS 25 Technology and Social Media 25 Focusing on International Growth- the BRIC Countries 27 Brazil 28 Recommendations for Brazil 33 Russia 34 Recommandations for Russia 40 India 41 Recommendations for India 46 China 47 Recommendations for China 53 Conclusion ………….…………………………………………………………………………………….54 REFERENCES 55 AVON- A GLOBAL COMPANY FOR WOMEN EXECUTIVE SUMMARY/ABSTRACT Avon is a powerhouse in the beauty industry with over $10 Billion...
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...Abstract This paper was created to provide a brief description of the status of the Avon products Inc. that led to its determination that a change was necessary. After, it identifies the model for change theory typified in the case study. Then illustrates the types of evaluation information that were collected and how they are used to benefit the company. And last, it speculates about success of the changes within the next five (5) years and how adjustments could be made if the results become less than ideal. In 2006, Avon Products success story turned ugly. After five straights years of ten percent plus growth and twenty-five percent operating profit growth under CEO Andrea Jung, the company suddenly began losing profits. One of the main reasons of this lost was the fast growth of Avon that couldn’t be supported by its employees. As with many growing organizations the structure, people and processes that were right for a $5 billion company were not necessarily a good fit for a ten billion dollar company (Goldsmith & Carter, 2010, p.2). There were weaknesses that hurt the effectiveness of the employees at the talent management practices. Decisions on talent movement, promotions, and other key talent activities were often influenced as much by individual knowledge and emotion as by objective facts. Neither managers nor Associates have any idea about how the talent practices work. Even the HR department wasn’t sufficient to answer basic questions that might be asked...
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...The Corporation STRATEGIES AVON CALLING -LOTS OF NEW REPS I t has been a cold spiing on the East Coasit, and une afternoon in late Aj)nl. the température drops and the wind picks up. But that doesn't koe|i Luz Stella Bongiovi from buttoning up her black wool coat and walking three blocks from her office to Knickerbocker Avenue in Bushwick, a workingciass section of Brooklyn. Standing in front of a jeans store on this bustling commercial strip, Bongiovi smiles warmly, offering passersby Avon catalogs in Spanish and English. The glossy pamphlets are crammed with cosmetics, but this ritual has become less about racking up sales of lipstick and face cream and more about a hunt for people, Hijeciiically futui*e Avon sales representatives. Bongiovi has a system that starts with the catalogs, someone takes one, she offers a free makeover, jots down her name and number, and soon schedules the beauty session. It's there that she has the time to pitch the benefits of selling Avon. Bongiovi has also run an ad in el diario/La Prensa, a New York Spanish-language newspapei'. It generated 7:i solid leads in six weeks. But no matter how she goes about (hiimming A sales-force makeover helps the company's U. S. turnaround up interest, she saves the best for last. Bongiovi shows fiotential recruits photocopies of her own biweekly checks for recruiting and managing other rejîs. Each one is for about S2,0(K). A]id that's before the $5,000 she averages for her own yales. That usually clinches...
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...Company Background Avon Products, Inc. is a US cosmetics, perfume and toy seller with markets in over 140 countries across the world and sales of $9.9 billion worldwide as of 2007. Avon Product is a multi-level marketing company. The company's chairman and CEO is Andrea Jung, who was promoted to the position in 1999. She has completed a decade as CEO and is the longest tenured female CEO among Fortune 500 companies Avon uses both door-to-door sales people ("Avon ladies," primarily and a growing number of men) and brochures to advertise its products. B. Research Design and Methodology This paper is primarily to formulate and recommend general strategies for the Avon Company in terms of competition in cosmetic and beauty industry. This will determine the company’s situation in the market. II. External Analysis A. Economic Forces Avon is the world's largest direct seller. Being an Avon Representative means you’re selling an iconic global brand while running your own local business. With Avon, you are in business for yourself but not by yourself. Avon's field management, as well as your fellow Representatives, provide mentoring, training and support every step of the way. Powerful Brand Avon Representatives around the world sell four lipsticks every second. Avon has 90% brand recognition in most major markets. In fact, two out of five women worldwide purchased an Avon product in the last year. And more beauty products carry the Avon name than any...
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...relationships with approximately 6.4 million active independent Representatives worldwide, and working with the new CEO in supporting the company’s strategic direction and brand positioning. On a personal note, it has been a true privilege leading Avon as CEO since 1999, as we have grown the company from a decentralized group of local operating entities to a globally managed business with global brands and a global operating model. During this time, revenues more than doubled to $11.3 billion, the number of Representatives also doubled and we expanded our reach to women in more than 100 markets around the world. Looking to the future, a new CEO will provide a fresh lens and additional operational capabilities to manage a company of Avon’s increasing size and scale. With the Beauty and Direct Selling industries growing, coupled with our broad geographic footprint, Avon continues to have significant growth opportunities. To capitalize on these opportunities, however, we will need to address the near-term challenges which have slowed the company’s recent revenue growth. In 2011, revenues were up 4% or 1% in constant dollars,* compared with the mid-single digit constant-dollar growth we have seen on average over the past five years. At the same time, Avon posted approximately $1.2 billion adjusted operating profit* and generated over $650 million in cash from operating activities. In line with this, we declared a $0.92 dividend in 2011 and stated our commitment to maintain this dividend in 2012...
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