Avon Case Analysis Essay -- Avon Cosmetics Make Up Essays

AvonAs of November 1999, Avon was experiencing economic troubles. Avons growth rate of annual sales was less than 1.5 percent during the greatest economic gold rush in history. This prompted a transfer in leadership which appointed Andrea Jung as CEO. Since that time, Avon has experienced remarkable growth.Under the direction of the new CEO, a new outline was developed to reinvent Avons image, improve customer satisfaction, and to increase profit margins and market share. Avon has gained an outstanding reputation as the best direct seller of knockout products. Through the restd efforts and achievements of its sales representatives, Avon is now known worldwide. Avons core competence has mainly been its direct selling busniess model. This led Jung and the management team to give a Sales Leadership program that provided incentives to acquire, train, motivate, and retain the number of active sales representatives it needs to sustain significant growth. Avon also has a representative exploitation program that localizees on the professional training of representatives. This enables the representatives to provide valuable information on Avon grade products. Avon also keeps its superior customer service in different ways of distribution such as the Internet and in the department store sales by having a timely and correct order delivery, peerless on one information exchange and personalized professional advice.Forces of CompetitionRivalry among competing sellers in the CFT assiduity is strong. The creation of innovative products is crucial to success. This industry focuses on continually developing cutting edge products using the latest science and technology. Rivalry is stronger when customers be to switch brands are low. Switching costs in the CFT industry are very low, due to the large amount of different brands of similar products. This cost is due to the higher number of competitors in the CFT industry and their tendency to copy new products in order to stay competitive.Another Avon objective that aims to alleviate pressures coming from competing sellers includes consists of reinventing their antiquated image. The organization had been a major actor in the CFT industry for decades. However, Avons management took a reactive approach and failed to evolve with the changing times. Because the CFT industry centers on mage conscious consumers, Jung d... ...na. Also, because the only sales in China are generated through retail outlets, Avon should further develop their Beauty Advisors training. Europe should also be a continued focus for Avon. Industry leader, LOreals attributes 50% of their aggregate sales to the European market. Avon has had a successful growth rate in Europe but only 23% of the total 2003 sales came from Europe. There is still room to expand in this market. Based on one of the industrys key success factors, product innovation, Avon should focus even more resources on R&D especially in the areas of anti-aging produc ts and teen products. Because 23 million teenagers have an average weekly disposable income of $85, Avon should continue with innovative teen marketing such as the current mark brand but also work on products for problem teen skin. being ahead of the industry in introducing new products combined with the companys already strong market position could further improve Avons brand equity and therefore revenues. In particular, Avon should continue to integrate sales representative into all aspects of sales. This is Avons own key success factor and what sets them apart from their competitors.