Cosmetics and Products

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  • Topic: Cosmetics, Marketing, Sales
  • Pages : 20 (5529 words )
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  • Published : April 18, 2013
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AVON
-STUDY CASE-

Analiza contextului global al afacerilor prin prisma factorilor de impact asupra industriei cosmeticelor

The cosmetic industry is one of which products tend to be countercyclical. Demand for such products normally remains constant and unaffected by economic distress. The color cosmetics are predicted to see a slowdown in volume demand. A growing trend in the cosmetic industry is the introduction of ‘green’ products. More than one in seven (16%) of global beauty products launched in 2008 were certified organic, ethical or natural. There are concerns that the global economic climate will stifle new product development, innovation and sustainability programs in 2009. An economic slowdown usually curbs companies from investing in research and development and it is that research that has brought forth a wealth of green cosmetics. For example, retailers such as Wal-Mart are increasingly requiring more ecofriendly supply chain. There are forecasts that consumers are unlikely to give up their commitments to organic products just to save a few pennies. 68% of consumers will remain loyal to a company that has a social and environmental commitment. Many consumers are now ‘voting with dollars’ for organic products and supporting brands that support values similar to their own. Economic factors mainly affect the purchasing power of customers. The more customer demand for the product the more profit to the organization, at the same time if there is no customers demand it’s going to affect the organization in a negative manner. So economic factors are very important external factors and affect the cosmetic industry. Economic factors include: Unemployment rate,

Economic growth rate,
Interest rate.
Other factors that influence the cosmetic industry are the government and legal basis. Also for AVON some of the risk factors are:
Success depends on our ability to execute fully our global business strategy, May experience financial and strategic difficulties and delays or unexpected costs in completing our multi-year restructuring programs or long-range business review, including achieving any anticipated savings and benefits of the initiatives thereunder, The key personnel,

The business is conducted worldwide primarily in one channel, direct selling, The taxes, political issues, legal and regulatory risks are also to be taken intoconsideration on international markets, May be subjects to financial risks related to their international operators, including exposure to foreign currency fluctuations, Competition,

A general economic downturn, a recession globally or sudden disruption in business conditions, A disruption of a key information technology system, process or site could adversely affect their operations, The ability to anticipate and respond to market trends and changes in consumer preferences, Government reviews, inquiries, investigations, and actions could harm our business or reputation, Protection the intellectual property rights, specifically patents and trademarks, Involvement in future, in the legal proceedings.

Analiza mediului ramurii

Avon Production considers its two closest competitors to be Mary Kay and Revlon. Avon is nearly 8 times larger than Revlon. In terms of channel of distribution, Mary Kay most closely resembles Avon because both use a direct marketing approach. Revlon in contrast sells its products through cosmetic counters in department stores and pharmacies. Avon has 42000 employees worldwide and Mary Kay has 5000 and Revlon has 5600. The large difference in company representatives is attributable to the necessity of employing more people to sell directly to customers than selling products through a storefront. The revenues of Avon also far exceed those of its closest competitors, with Mary Kay selling $2.40 billion and Revlon selling $1.35 billion in 2008 as compared to Avon’s $10.37 billion. [pic]

We face competition from competing products in...
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