A V O N the company for women
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Transcript of A V O N the company for women
A V O Nthe company for women
Final PresentationDecember 6, 2010
Jen Callaghan J.R. Longino Rasa Navickaite Meghan Quinn Lia Torre
Avon is a leading global beauty company, with over $10 billion in annual revenue. As the world's largest direct seller, Avon markets to women in more than 100 countries through 6.2 million independent Avon Sales Representatives. Avon's product line includes beauty products, as well as fashion and home products, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals, and Mark.
Corporate Overview• Current Long Term Objectives
- Retain their representatives and increase their productivity
- Leverage technology and the viral power of the Internet
- Broaden shopping opportunities with new product categories
- Restore Sustainable Growth- Committing to brand competitiveness
Corporate Overview• Current Short Term Objectives- Committing to brand competitiveness - Winning with commercial edge - Improving the attractiveness of Representative
earnings opportunity as needed;- Elevating organizational effectiveness - Transforming the cost structure
Corporate Overview• Core Competencies- Branding
– 90% awareness globally– Advertising invetsment with Celebs
- Channel- #1 Direct Selling Company
- Cost management– $1B in savings by 2013
- Organization – Matrix of global and commercial business units.– 71% employee engagement
SWOT• Strengths- Diverse Market
Presence - Direct-Selling Model- Brand Equity
• Weaknesses- Chinese Operations- Strategy in non-beauty- Declining Margins
• Opportunities- Restructuring Initiatives- Social Media & Technology- Rebranding Strategy- Emerging Markets• Threats- Competition in Industry- Revenue tied to Reps- Currency Fluctuation
Recommendations• Opportunities- Restructuring Initiatives- Social Media & Technology- Rebranding Strategy- Emerging Markets
Technology and Social Media• Advertising on Social Media- 25% of advertising budget to Social Networks- Create social selling applications - all Avon brands• Upgrade Online Marketplace- Through sales reps promote online sales- Take advantage of early mover advantage• Empower Sales Reps with Technology- Sales Applications for Mobile Devices- Video chats for representative meetings
Evaluation of BRIC opportunity for AVON
BRAZIL RUSSIA INDIA CHINA
‘10-’14 Beauty $ Growth*
$651MM $717MM $50MM $428MM
5 Forces* Moderate Moderate Moderate Moderate
Demographic Fit
Exponential growth of
Middle Class
Aging Pop Emergence of Young Urban
elite
Aging Pop
Segment growth
Lipstick Eye Lipstick Lipstick
Formal Considerations
• Unstable economy & high
import tax
• Corruption •Easing of trade barriers
• Direct selling heavily
regulatedInformal Considerations
• Role of women increasing
• High value placed on
luxury
• Growth of urbanization
• Close family connections
*Projected: Datamonitor, 2009
RUSSIA• Economic situation:
– #1 predicted dollar growth of BRIC ‘10-14
• Demographics: – Growing affluent
population• Importance of beauty
as a status symbol within the culture
Russia Recommendation• Leverage brands to capture
consumer segments
Ages 16-29
Ages 30-39
Ages 40+
India
India Recommendation
CHINA• Economic situation:
– Avg. GDP growth 10.3%
• Demographics: – Growing population– Urbanization– Aging population & longer life expectancy
• Importance of beauty within the culture
China Recommendation
• Focus and target the “fashion-conscious” urban beauty consumers
• Focus on anti-aging product line
• Emphasize the competitive price
• Emphasize opportunities of entrepreneurship
BRAZIL• Economic situation:
– World’s third largest beauty market
• Demographics: – Growing middle class
• Importance of Hygiene within the culture
Brazil
• Politics – growing middle class
• World’s third largest beauty market
• Hygiene as part of culture
Brazil Recommendation• Focus on Product line simplification-Lip-Hair care• Continue to spend advertising money
in Brazil to gain new representatives• Take advantage of Brazils natural
resources
Conclusions• Avon can leverage its core competencies to drive growth globally.• Stay true to its efforts to streamline costs
• Harness the power of technology as a selling tool
• Strategically enter each of the BRIC countries
Questions
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