Avon Case

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I. Problem Statement

When Jung took over, there was no definite strategic vision for Avon. Avon reps had no common goal to work towards, and this was translated in their work, which led to the brand having no evident personality even for the consumers. Along with the lack of strategy came the inability to cope with the changing times. A company that was set on their old business model, Avon found it hard to integrate technology into their daily operations. And lastly, proper leadership was lacking even in their management. This made it even harder to remain competitive in the industry. With all the internal and external factors coming into play, will Jung’s strategic management be able to save Avon and ensure the company’s sustainability in the long run?

II. Assumptions

* It is currently the year 2003 – just after the conclusion of Andrea Jung’s initial strategic plan. (Any other specific activities after said year are still just plans and haven’t been implemented yet) * The CFT industry continues to thrive as a strong and profitable industry and the skin care product category is the fastest growing segment within the said industry and globally.

III. Point of View

The group wishes to take the point of view of a third party consultant.

IV. SWOT & PESTLE

SWOT Analysis

STRENGTHS| WEAKNESSES|
- Avon was one of the key players in the industry
- Vast arsenal of sales people| - Lacks definite strategic vision & strategy - Brand has weak equity- Sales force are not driven to sell, but to recruit| OPPORTUNITIES| THREATS|
- Innovative industry
- New distribution channels that the company can tap
- Underserved market segments (teens, mens etc,)- Growth opportunity in other countries| - Tough Competition - Changing consumer preferences
- Continuous innovation of competitors- Increased preference in retail|

PESTLE Analysis

Andrea Jung’s vision for Avon was a bold one. She wanted it to be the “ultimate relationship marketer of products and services for women.” With this statement, it is clear that she envisions Avon to be the provider of all the needs of every woman.

However, the needs of a woman vary under different conditions; the market for the global CFT industry is segmented by consumer demographics and by geography. Those belonging to the baby boomer age group are primarily looking for anti-aging properties in the beauty products that they purchase. On the other hand, teenagers are more concerned with distinguishing themselves and setting themselves apart from others which is why they tend to buy beauty products that match their personality as they know it. And in between these two age groups are those women in ages 20-30 who are concerned with the oncoming effects of aging; they are those that are still not ready to use anti-aging products like anti-wrinkle creams but wish to take a proactive approach to delaying the first signs of aging.

Women’s preferences of beauty products also vary across different regions. The typical European women are the ones who are mostly attracted to purchasing products that have anti-aging properties. While those of African American descent have concerns that are focused mainly on the availability of cosmetics pigments suitable for darker skin, skin oiliness, and hyperpigmentation. Asian women also have different concerns from those of European women; they, in turn, are more concerned with maintaining their natural or pale skin tones.

Aside from the different needs of women from different countries, political constraints should also be considered. Take for instance China, wherein the government has implemented a ban on direct selling which was primarily the source of income of Avon.

Besides the different market segments, there are still a lot of things that Avon needs to consider in order to fulfill its vision. With the influx in internet usage all over the world, almost all things are being done in the web now. Online order...
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