Taking Sides Avon

Taking Sides Case Analysis- Avon Products, Inc.

Learning Team B

Strategy Formulation and Implementation

MGT 578

Taking Sides Case Analysis- Avon Products, Inc.

Introduction

Avon is a company for women and is the world's leader in direct selling of beauty and cosmetic related products. For over 115 years Avon has experienced tremendous success through its direct selling technique and the worldwide recognition of its brand name (Pearce & Robinson, 2006). Faced with the strategic decision of developing more growth for Avon, Andrea Jung, president and CEO of Avon since 1999, wants to partner with JC Penny and Sears to provide a greater distribution channel for Avon. It is a difficult decision, because Avon is known for its direct selling method that provides convenience and allows the representatives to build a relationship with its customers. On the other hand, providing Avon products in department stores could possibly open up a whole new customer base that was not present before.

This paper will discuss whether the grand strategy under the leadership of Andrea Jung has its merits. Cherise Preston, and Bobby Wright will defend the side that Andrea Jung's grand strategy is properly focused and directed, while Edna Ajayi, Kelvin Lampkin, and Tammy Zybell defend the argument that Andrea Jung's grand strategy is not optimal and needs to be refocused.

Avon Grand Strategy Has Merits

Avon Products Inc. has faced some turmoil in regards to its sales, for instance, their "earnings risen in the low-single digits in the past few years" (Pearce and Robinson, 2004); however, the organization has been around for over a century and is well known for being "the world's largest direct seller of beauty and related personal care products. These products are sold to women in 137 countries via 3 million independent sales representatives who generated approximately $5.1 billion in annual revenues" (Pearce and Robinson, 2004). Although Avon is faced with these single digit increases in earnings, they have the potential of growing the business by implementing a strategic plan that would help sustain their reputation as being the world's largest and successful seller of beauty products. Andrea Jung has decided to implement a strategy that will once again make Avon a competitor in the industry. The strategy was more sound and lucrative for the organization than others; the decision to increase and segment her products according to the consumer was a positive move. Her line was directed according to the needs based on the different sex, race and culture of the consumer. By venturing out with creative marketing and strategies such as internet sales and free-standing selling in shopping mall corridors Jung begin to cater to and meet the needs of Avon's target population. This meets the demand of the consumer, thereby increasing sales for Avon. Being able to identify her market, consumer demands and competition was important to the continued success of the business.

Avon Grand Strategy Does Not Have Merits

Jung was attempting to address many issues in regards to a new strategic plan. Jung's main concerns with Avon were the single digit growth, volatile stock, archaic and limited distribution channels. The questions that she addressed were where Avon should sell its products, which would be its target market and which product lines best fit its brand image. When addressing the question of where should Avon sell its products, both Jung and the consultants agreed that Avon should extend its