Amway India Case analysis

Satisfactory Essays
Topics: Marketing, Amway
CASE B-6: AMWAY INDIA

Assignment Presented to
Dr. G. N. Braithwaite-Sturgeon as per the requirements of
International Marketing ADM4328 M

University of Ottawa
January 22nd 2013

BUSINESS CONTEXT & INITIAL SITUATION

Amway, a North American Multinational, subsidiary of Alticor Inc. has over the years become one of the leaders in the 90 billion dollar direct selling industry through its use of multi-level marketing and creation of networks of independent business owners and sales. Founded in 1959 by Jay Van Andel and Richard DeVos, the company grew and captivated interest on an international level, especially in developing countries due to its ability to provide entrepreneurship opportunities. Amway’s range of 450 products and services are distributed worldwide in over 90 countries in a variety of sectors such as: wellness, beauty, home care, commercial, insurance, education and nutritional care. India’s growing economy made it one of Amway’s many targeted countries, and, in May 1998, Amway India commenced its business operations. After 36 million dollars of investment in the Indian market, in 2002, Amway India came under some legal issues when Indian officials and the State Government of Andhra Pradesh registered a criminal complaint against Amway India Corporation and concluded their creation of a chain of distributors was operating against the Act Prize Chits and Money Circulation of 1978. Today, in 2013, Amway has continued its operations within the country and has even expanded into a 100 million dollar colour cosmetic segment. Business is booming but Amway Corporation’s future endeavours within India hang in the balance of its legal conclusions.

PROBLEM

Despite the fact that Amway Corporation has experienced tremendous international success, they are now facing legal concerns in India with respect to their direct sales practices. These legal issues tied to the

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