12/30/2011

case study on Avon

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ANDREA JUNG’S MAKEOVER OF AVON PRODUCTS INC.


1.0 Case Synopsis


On Andrea Jung’s commencement as CEO in 1 she faced a number of strategic problems at Avon - there was no superior strategy for the company to initiate and thus no competent implementation and execution of this strategy. This lead to a number of symptoms such as poor image, slow growth and a decline in sales, which was a direct link to a vague strategic vision, lack of innovative technology and lack of leadership. With a new strategic vision implemented by Jung, Avon was able to move into the 1st Century with a clear view to compete with other Cosmetics Fragrances and Toiletries (CFT) companies in the same industry.


.0 Primary and Secondary Problems


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.1 Lack of a well defined strategic vision


Avon did not have a well-defined strategic vision � which stated who are we, where are we going and how we are going to get there. Without this vision for the company, employees had no sense of organizational purpose and no motivation and as a result Avon’s image declined. Many customers commented that Avon’s products were ‘dull’ and ‘not for me’. Alongside this, were comments regarding poor product packaging, distribution and advertising campaigns. All of these were symptoms of a lack of strategic vision and clear-cut objectives.


. Lack of innovative technology � Managerial problem


A problem that was evident for Avon was the inability of the company to change with the new technological world, which was fast emerging. As times were changing Avon did not implement vital technological processes that could manage the firms inventory and sales more efficiently rather Avon continued with onerous paperwork which consequently lead to mishandling customer orders. This contributed to losing sales as Avon were unable to sell products to busy and workingwomen which as a consequence lead to the slow growth which occurred in 18 - . The inability to move with changing times illustrates a lack of strategy on the management’s behalf to meet their objective outcomes.


. Lack of leadership


A third problem evident at Avon was the lack of leadership displayed by all management. Avon had no clear cut direction that could be facilitated to staff at all levels, the objectives seemed unattainable and there was incompetent implementation of strategies. This lack of leadership on the management’s behalf left Avon without being able to release a new product into the market in over a decade. Without correct leadership, advertising campaigns and product innovation could not be successful nor could Avon remain competitive with other companies within the same industry.


.0 Recommendations


.1 Clear Cut Strategic Vision (Image Enhancement)


The strategic vision developed by Andrea Jung incorporates many useful functions for example the vision specifies where the company is headed (into fitness and health), it provides long-term direction and illustrates to customers and staff the type of company Avon wants to become. However as Avon is still in the implementation phase this vision may open the door to many products that are unrelated to beauty products and may place a burden on the company in the future unless Avon can remain competitive in this area by vigorously keeping up to date with new innovative products. It is in my view that for Avon to expand the company horizontally they should enter into a market for men as it is evident in today’s society that many men are interested in hair and beauty products based on competitors enter into this market. With a correct image and advertising campaign Avon should be able to enter into the market for men’s products thus stimulating the growth of the company as a result.


. Clear Objectivity


Andrea Jung’s Financial and Strategic Objectives are in line with her strategic vision for Avon. All objectives are future orientated, are measurable and attainable and are specific in meeting her vision. This motivates staff as they are aware of the new products available and they know what is expected of them, which can encourage growth for the company. Through my analysis of Avon’s objectives it is evident that Avon will experience an increase in sales and growth due to the introduction of the erepresentation scheme, which targets one of their main problems selling products to the busy and workingwomen of society. Avon needs to ensure that they keep up to date with the latest technology and use the Internet to their advantage in promoting and gaining sales in the future as failure to do so could be detrimental to their strategic vision and implementation of their strategic plans.


. Leadership (Implementation of Strategic Vision)


It is evident that a lack of management leadership in Avon lead to disappointing results in 1. Andrea Jung’s new vision for Avon, created strategy elements that were well matched to the changes that have occurred in the cosmetics industry. The strategies are sensible and are related to what Avon’s competitors are doing in the marketplace, which in turn will lead to Avon creating a competitive advantage and thus an improved financial performance. My analysis of Avon indicates that Andrea Jung and Charles Perrin leadership in developing a good sustainable strategy for Avon and Jung’s implementation of this has resulted in increased revenue and growth for the company. The use of the Internet and newly introduced products seem to be doing well as do the sales leadership program with an increased number of employees in 000. However I recommend that Avon should prioritize its strategic objectives in an effort to keep up with its strategic vision as Avon could find itself in the same position they were in before Jung’s appointment as CEO.





Overall my research has shown that Andrea Jung’s efforts in rejuvenating Avon should be commended as all her strategic and financial objectives are outlined within her vision for Avon. Avon needs to continue to expand globally, especially those, which are not being accentuated by competitors. Avon also needs to be wary of having a broad product line as by introducing too many new innovative products could be costly to the firm and Avon also may lose sight of their vision of a company that ‘best understands the products of women’.





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