Monday, June 4, 2012

avon

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1. Organizational Mission

Avon’s mission is to be the company that best understands and satisfies the product, service, and self-fulfillment needs of women globally. Its dedication to supporting women touches not only beauty � but health, fitness, self-empowerment and financial independence (7).

Avon is the worlds largest direct seller and sixth largest global beauty company focusing on selling products directly to customers; maintain a good image of company and developing a domestic and international network of sales agents (1).

. Corporate Objectives

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The company was founded in 1886 by a New York book salesperson named David H. McConnell and continued to influence and setting the direction and the long-term goals for the company throughout its history. The Objectives and principles of corporation is still influenced on decision making on the corporation.

(1) To provide individuals an opportunity to earn in support of their well being and happiness.

() To serve families throughout the world with products of the highest quality backed by a guarantee of satisfaction.

() To render a service to customers that is outstanding in its helpfulness and courtesy.

(4) To give full recognition to employees and representatives, on whose contribution Avon depends.

(5) To share with others the rewarding of growth and success. ()



. Corporate-level Strategies

Product Diversification

Avon developed brand new line of product to appeal to customers who are craved the elegance of those brands. The beComing line of products could not purchased from independent representatives and priced higher than Avon’s other stores to compete with prestige of products like Lanc�me or Estee Lauder. However, it was less expensive than departmental brands (1).

Market penetration

Avon’s the first strategy to penetrate market rate is to improve the company’s image by improving of packaging. According to company’s research, Avon’s largely working middle class women customers could not afford prestige band like Lanc�me or Estee Lauder but craved the elegance of those products ().

Also Andrea added nearly 50 percents to Avon’s R&D budget during her fist fiscal year as CEO and demanded that company’s researchers develop innovative new items within two years instead of the company’s usual product develop time of three plus years to faster delivery of new items (1).

Unrelated diversification

Avon’s R&D personnel collaborated with pharmaceutical manufactures Roche Holding, Ltd., in developing of vitamins and supplements designed to promote general health or address health problems like lack of energy, poor memory, stress, cardiovascular disease, arthritis, loss of bone density, and hormone imbalance (1).

Other wellness products included aromatherapy products, books, videos, music, and teas (1).



Joint Venture

Avon’s initial agreement with Sears and JCPenny called for 15 Avon centers in 001. Avon centers in 75 JCPenny stores and launch of its beComing CFT line with 400 different upscale prestige packaging and value pricing helped market for a new retail line of cosmetics (1).

Business-level Strategy

Best-Cost strategy

Avon is the best-cost provider aiming at more value for the money. The company continuously achieve trust the working, middle class women who are too busy and could not afford prestige brands. In order to become a best cost provider, Jung wanted to added 50 percent to support development of excellent quality of products at a lower cost than rivals. The best cost strategy is very appealing CFT industries since most of buyers are middle class that prefer excellent products with midrange priced products.



4. External Analysis

Opportunities

Develop more products contain natural ingredients

A growing number of companies are developing vitamin-packed cosmetics that at once are designed to nourish the skin and avoid the synthetic ingredients that may provoke skin irritations and other adverse reactions.

Cosmetic products for men

The skincare industry regards the male skincare and cosmetics market as the next major area for growth. Although men are spending more time on personal care, they often are afraid to ask questions. Products that are simple and portable are more likely to be successful.

Of primary concern for the male market is simplicity and masculinity of packaging. Designs imitating other personal care products they use daily will help men feel more comfortable. The category remains relatively underdeveloped compared with the myriad of products in female beauty (5).

Cosmetics for babies

Recent years have seen major moves in products (products that do not contain heavy chemicals, but are often stickier and whiter) for babies, a market that has continued to expand as parents realize the importance of beginning sun protection early.

Threats

Political environment

Avon was the first and largest international direct seller in China from 10 until April 18. when direct sale was banned by the Chinese government, Avon quickly found a retail stores to process sale of Avon products while (1)

A direct selling is considered old fashion and outdated for developed country

Direct selling representatives does not allow for a highly trained sales force. The Sales force is trained with video tape and education material that is provided from the company- (approximately 0 percent of Avon’s reps accounted for 80 percent of the company’s revenue (1)

Increasing number of women have full time job.

Inefficiencies selling products to modern busy women (most Avon reps are getting their orders every two week from the main distribution center.)

Fewer middle class women are satisfied with part time sales job and, fewer women purchased products sold door-to-door.

Number of competition in the direct selling industry is increasing and competition is intense.

There are a few direct selling firms with diverse products such as Amway, Quixtar, Mary Kay and numerous small companies that sell variety of products.



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