Avon Strategic Management Case Study Example | Topics and Well Written Essays - 2000 words

Avon Strategic Management - Case Study Example The company has built its business based on its direct approach. The products of the company also addressed the needs of the women. The company always introduced a new fragrance every month. There was always something different launched by the company on the fragrance sector and they were already known for it. The company had their presence strongly felt in cosmetics and beauty products for women. They also had fashion jewelry in their line of products. The company had its operations spreading from the United States and North America to other parts of the world. The overseas operation of the company has started making more sales than the North American operations. The contribution realized by the company from its overseas operation has grown substantially in the last three years. However, the entry of competitors like Revlon, L'Oreal etc., has been shrinking the market share the company enjoyed in the United States. We need to analyze the situation under this condition and evaluate the options in front of the management. The company has a clear standing in the market. They are known for their women oriented products and it is a company for the women of the world. This the company has further reinforced by launching social foundation that would espouse the cause of the women. It has a magazine that circulates the ideas and social commitments of the women and to fight for their justice. In addition to this, the company also provided tips on beauty and other women centric information. Secondly, the company is also known and it has sustained the image that it is a door - to - door selling company. The business of the company was built by the local Avon ladies who were more of consultants to their customers and could also achieve the kind of sale that was happening then. The company and its brand of products, has its own standing in the market. However, the market has a very short memory when it comes to remembering brands! The company has a web site that promotes the thoughts and ideas of the company on the beauty products and other fashion accessories that they are selling. Company has tried positioning their products on the retail market using the JC Penny & Co store chain but was not very successful. However, the company still runs the mail order business from where the customers could get their supplies should they have any difficulty in meeting their individual Avon ladies. They do have an online presence in the growing internet selling market; though not forceful. New products in the fragrance division are done every month. However, it is in line with the idea of the company to have new fragrances on the fly. To ensure that there are new products in every segment of work that is being done, the company has escalated its R&D budget by nearly 46%. Competition In the market place, the share of the market is being taken away by competitors by taking different approaches. Companies like L'Oreal or Revlon, sell through retail outlets and they realize their targets by positioning it appropriately through advertisement campaigns. The presence of these companies in the retail outlets is overwhelming and this has been one of the major causes of market share dwindling. The companies that are present in the direct selling market such as Mary Kay, Amway and Fuller do not compete with the exact products that are sold by Avon. However, Mary Kay is the closest competitor in this sector. It is therefore, important for the company to ensure