Topic > Avon Case Study - 1705

Executive SummaryAvon Products, Inc. (Avon) is headquartered in New York. The company is engaged in the manufacturing and marketing of beauty and complementary products primarily in North America, Latin America, Europe and Asia Pacific (Yahoo Finance, 2005). Avon products are classified into three product categories: Beauty, Beauty Plus and Beyond Beauty. The Beauty category consists of cosmetics, fragrances, skin care and toiletries; Beauty Plus includes costume jewellery, watches, clothing and accessories; and Beyond Beauty includes household products, gift and decorative items, candles and toys (Ibid). The company sells and markets its products through a combination of direct sales, marketing by Avon's independent representatives, and through its consumer website, avon.com. This paper will explore how the company is performing under the leadership of its current CEO, Andrea Jung. There are two opposing views regarding the company's current and future success. One group believes the company has a promising future with Jung at the helm, while the other group does not. This article will analyze the pros and cons discovered by each team member and discuss which view prevailed in the debate and why. Pros and Cons Pros of Jung and Avon Andrea Jung became president and CEO of Avon in 1999 and completely revamped the company. Under his leadership, the company updated its product line, launched new advertising, and created a new image (Fact Monster, 2005). Avon's sales increased by 30%, profits by 40%, and the stock price improved significantly (Ibid). Jung was able to align the company's core capabilities with its strategic goals, achieving phenomenal results. It appears that Jung was able to establish a clear vision for the company that was incorporated into every aspect of the company's operating system. This vision is shared by all Avon employees and representatives, setting the company up for continued success. Under the direction of Andrea Jung, Avon is focusing on developing countries, especially China. Many developing countries are more receptive to direct selling by women as jobs at Avon represent opportunities for women who want to be independent in male-dominated cultures. Avon also recognized that demographics have changed and recruited younger women to sell to the younger customer base. Jung's other strategies include reducing costs by reducing the number of raw material suppliers, moving production from smaller to larger plants, moving production from high-cost plants in nations such as Britain to low-cost countries such as Poland (Tarquinius, 2004).