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Avon Products

Content
INTRODUCTION
Brief history of the brand

STRATEGY UNTIL THE MID 2000s


Advantages
Disadvantages

CHANGES : ANDRA JUNG AFTER 2005


Benefits
Drawbacks

STRATEGY PURSUED BY AVON BY 2000s

PROBLEMS BETWEEN 2010-2011


Result of a strategic change
Or other reasons ?

CONCLUSION
Brief history of the brand
Founded in 1886 , 131 years ago
by David H.McConell

Products : Cosmetics, Perfume, Clothing, Toys

36,700 employees

Annual sales of $ 10.0 billion worldwide in 2013

The fifth-largest beauty company


Timeline

Falling of the The company


Creation
success story stumbled again
1886
2005 2010

2008 - 2009 2011


1999 Crisis Andrea Jung is
Andrea Jung
not CEO
CEO
anymore
BEFORE
2005
PEST ANALYSIS SWOT ANALYSIS
Strategy until 2005

LOCALIZATION AND USED DIRECT SALES MODEL

Advantages
Managers free to base marketing on tastes and
preferences of domestic markets
Power to Avons representatives all over the globe

Concerning localization, given autonomy to the managers


Right and basic decisions for distribution and supply chain.
Organization marketing and sales strategy depending on the need of
the local market
Disadvantages
Different strategy made a big lack of consistency between each
nations strategy
Each manager of each country began to set up manufacturing
operations and supply chain
Started to develop their own product resulting in the increase of
product and manufacturing duplication
In the mid-2000s : Avons strategy has shown to have advantages
as well as disadvantages
Changes : Andr Jung after 2005
Declining Period &Turnaround Strategy

In 2005, the tide turned and the company began to struggle.


Foreign sales, which represents a significant portion of the companys overall
earnings, tumbled dramatically as the company started losing sales across the
globe.
Economic weakness in Eastern Europe, Russia and Mexico.
A ban on direct sales in China.
The companys stock price fell
extremely quickly.
Benefits
Jungs belt-tightening strategy started to yield significant results:
Taking out layers brought senior management closer to operations.
Communication across the company was greatly improved, accountability
was easier held and visibility of performance allowed quick adjustments.
Eliminating duplication and cutting down costs by more than $1 billion a year.

Avons leverage with suppliers was boosted.


Centralized decisions facilitated coordination and ensured consistent with the
companys objectives.
New representatives were recruited in China.
Managers no longer use their intuition when making decisions.
Drawbacks

Implementing a cost saving strategy usually requires downsizing.


Restructuring and reducing the management layers to just eight
instead of fifteen, thereby many managers were laid off which was
very stressful.
Strategy Used 2005- 2010
PEST ANALYSIS
SWOT ANALYSIS 2005-2010
STRATEGY USED

TRANSNATIONAL
STRATEGY

FINANCIAL CRISIS =
OPPURTUNITY
2010 and
later
PEST ANALYSIS SWOT ANALYSIS
Problems between 2010 - 2011
Conclusion
REFERENCES
http://www.avoncompany.com
http://www.avoncompany.com/aboutavon/history/mcconnell.html
https://www.leaf.tv/articles/the-history-of-avon-products/
Hill, Charles W.L. International Business: Compeating In The Global Marketplace. 10th
ed. N.p.: n.p., n.d. Print
AVON. (n.d.). Retrieved November 16, 2015, from
https://www.avon.com/?s=AV_GGL_Brand&c=iCrossing&otc=AV_Shop_Brand_EXAC
T9Brand9avon&CID=470_109901
Galle NACHAWATI - 5931095
Ins - Marie QUEIJO - 5934217

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