Premium Essay

Avon Products Case Study

In: Business and Management

Submitted By jennathorne
Words 1162
Pages 5
Abstract

This paper was created to provide a brief description of the status of the Avon products Inc. that led to its determination that a change was necessary. After, it identifies the model for change theory typified in the case study. Then illustrates the types of evaluation information that were collected and how they are used to benefit the company. And last, it speculates about success of the changes within the next five (5) years and how adjustments could be made if the results become less than ideal.
In 2006, Avon Products success story turned ugly. After five straights years of ten percent plus growth and twenty-five percent operating profit growth under CEO Andrea Jung, the company suddenly began losing profits. One of the main reasons of this lost was the fast growth of Avon that couldn’t be supported by its employees. As with many growing organizations the structure, people and processes that were right for a $5 billion company were not necessarily a good fit for a ten billion dollar company (Goldsmith & Carter, 2010, p.2). There were weaknesses that hurt the effectiveness of the employees at the talent management practices.

Decisions on talent movement, promotions, and other key talent activities were often influenced as much by individual knowledge and emotion as by objective facts. Neither managers nor Associates have any idea about how the talent practices work. Even the HR department wasn’t sufficient to answer basic questions that might be asked by managers like “What will happen to me if I don’t do this?” (Goldsmith & Carter, 2010). Thus, changing at the talent management practices was a necessity for the company in order to increase the operation profits.

The change theory typified in Avon Products case study is the 360 degree assessment process along with performance management and succession planning this would deliver the…...

Similar Documents

Premium Essay

Avon Case Study

...Avon Calls on Foreign Markets Case Study Introduction Avon is a 125 year old beauty product manufacturer, who has for over a century left a mark on millions of people throughout hundreds of countries. Avon is most popular for their direct selling technique in which the company sells products directly to distributors or final consumers rather than to trading companies or other intermediaries in order to achieve greater control over the marketing function and to earn higher profits. While this method has proven to be successful for Avon and has certainly contributed to their longevity in the market, there are still crucial factors imposing on the company’s global presence throughout the world. The case study “Avon Calls on Foreign Markets” shed light on issues related to branding, pricing, promotion, as well as distribution. Throughout this analysis, I have identified the shortcomings of Avon over the decades and have also provided recommendations for moving forward. Global Branding Avon is known for their standardized branding, which allows the company to create a uniform global quality image while saving costs by using uniform ingredients and packaging. While this method may be helpful in increasing sales in Thailand as consumers prefer to buy beauty products made by foreign companies, this may not necessarily always work out to Avon’s advantage. For instance, Daniels et al (2011) reveals several barriers to uniform branding that Avon should most certainly be......

Words: 1739 - Pages: 7

Premium Essay

Avon Case Study

...Avon Products By Laura Argo The main domain of subject study is Strategic Human Resources Management and is mainly aimed to conceptualize the concept of Talent Management. The Talent Management refers to the process employed in order to anticipate human resources requirements to an organization at particular time and include strategy formulated in order to meet that requirements (Groysberg, 2006). The talent management process includes distributing the responsibilities and accountabilities from human resources department and personnel to all departments throughout an organization. The strategic importance of locating and retaining employees around the business world has recognized this as “War for Talent”. This field of management is also termed as the Human Capital Management. 1. Provide a brief description of the status of the company that led to its determination that a change was necessary. The Avon Products, Inc. is one among the popular American based organizations dealing in personal care manufacturing and seller firm (Groysberg, 2006). The Avon Products, Inc. is a multinational organization operating in almost 140 countries around the globe with sales revenues from its operations more than $ 10.8 billion during last fiscal year. The Avon Products Inc. is the world’s largest firm selling its products directly and is standing at fifth spot among the firms dealing in beauty and care products (Gardner, 2003). In order to achieve subject study the Case Study of Avon...

Words: 1714 - Pages: 7

Premium Essay

Graber Products Case Study

...the Entrepreneurship and Society chapter, particularly on the Graber Products case study. Graber Products makes bicycle racks, parking, and training systems. Sara and Chris Fortune bought Graber Products in 1989 when it had 24 employees and $3.3 million in sales. When the video case study was filmed, there were up to 60 employees and with revenues over $10 million. They were sued for patent infringement and lost $1 million in the lawsuit which they were advised to declare bankruptcy but chose to not take that path. Sara and Chris were not quitters and they have 3 main reasons to their success are having a banker who believed with their road to recovery, psychological support from employees and board of directors, and their responsible upbringing. The Graber Products brand represented quality and stability; however their sales were flat as they were known in a market as supplier of nuts and bolts. Chris had to reposition Graber Products as an innovative company as they need fresh energy to grow again. He then built on the good he bought and threw out the bad by working with University of Wisconsin and came up with thrilling new products to the marketplace. For small-business owners like Chris and Sara, they work shoulder to shoulder with their employees and their reputation is the most valuable asset. Question 1: Why was the support of employees so important to the company’s survival? Graber Products is an innovative company and they believe that innovation helps to......

Words: 1115 - Pages: 5

Free Essay

Avon Products Case Study

...[Type the company name] | AVON PRODUCTS CASE STUDY 1 | [Type the document subtitle] | | Pamela | [Pick the date] | Abstract Avon Products, Inc was a leading global cosmetics company, with over $8 billion in annual revenue in 2005. As the world’s largest direct seller, the company marketed to women in 143 countries via five (5) million independent Avon Sales Representatives. Avon product lines included numerous popular brand names, and an extensive line of costume jewelry and clothing. Although revenues increased in 2003, 2004 and 2005, Avon’s net income was $848 million in 2005. The company met with stiff competition in the US market from other cosmetic companies. In order to maintain its market share in the US while targeting other countries, especially China, the company drastically changed its global operating structure. This brought senior management closer to its key business geographies, strengthened global integration, accelerated information flow and positioned the company for sustainable growth. Avon expected to incur costs to implement these initiatives over the next several years, with a significant portion of the total costs to be incurred during 2006. Benefits from restructuring helped to fund a notable increase in consumer investment and improved the competitiveness of its direct selling opportunity. Additionally, the company increased investment in advertising, marketing intelligence, consumer research and product innovation. The cosmetics......

Words: 1478 - Pages: 6

Premium Essay

Avon Case Study

...Avon, A Cut Above the Rest Nathaniel J. Wilson Dr. Robert Waldo HRM 532 – Talent Management May 4, 2014 Introduction A door to door merchandise company that began well over a century ago flourishes and then almost crumbles to its knees. Why you might ask, well it’s very simple; when major companies continue to grow faster than the structure will allow, they simply cannot keep up with the consumer demand. Avon Products Inc., a global cosmetics and fragrance company that have a rich history for well over 120 years tried to do the unthinkable or should I say the fundamental movement. As stated by Goldsmith & Carter, they tried to integrate globally while building a larger foundation (2). The company started with one man going door to door selling books and as a consolation would give women samples of perfumes to keep them buying; fortunately turned into a multi-billion dollar empire of women’s goods. Avon grew into a household name that is still very profitable today. While operating in over 40 countries the company never defaulted and stayed true to the brand. Unfortunately, they began to notice that they were unable to operate at the same structure as previously. Companies must evolve and change with the needs of the consumer and the need of the market. Fear of any company will develop imbalance in structure and leadership of the company. Not to be overshadowed by the changes the executives began to shift and restructure of the company for the......

Words: 1825 - Pages: 8

Premium Essay

Avon Case Study

...printed which improved Representatives’ opportunities by allowing them to showcase more products than they could carry in their sample cases. 1945 - The company launched one of the most memorable advertising campaigns of all time with the “Ding Dong Avon Calling” commercials. 1946 - With sales of $17.2 million and profit rising to more than $1 million, Avon became a publicly-traded company. 1959 - Avon launched operations in Western Europe, in the United Kingdom and Western Germany. 1969 - Avon entered Japan, expanding its operations to the Asia Pacific market. 2005 - Avon invested $100 million to build a new cutting-edge Global Research and Development Center in Suffern, NY, furthering the company’s commitment to stay at the forefront of the beauty marketplace, bringing leading-edge, technology-based products to women around the world. 2007 - Avon launched the Hello Tomorrow Campaign, a global marketing campaign that encompasses product and representative recruitment advertising; and the Hello Tomorrow Fund, which empowers women and improves society by providing individuals with cash awards that will allow them to pursue a project or initiative to better the lives of women of all ages. 2009 – Avon grew to 6.2 million Active Representative, as women worldwide recognized Avon could be the answer to a challenging global economic environment. BACKGROUND OF THE COMPANY Avon Cosmetics is one of the largest and well known companies producing cosmetics......

Words: 1413 - Pages: 6

Premium Essay

Elektra Products Case Study

...CASE STUDY 12.1 PROFITEL INC. By Steven L. McShane, University of Western Australia As a formerly government-owned telephone monopoly, Profitel enjoyed many decades of minimal competition. Even today as a publicly traded enterprise, the company’s almost exclusive control over telephone copper wiring across the country keeps its profit margins above 40 percent. Competitors in telephone and DSL broadband continue to rely on Profitel’s wholesale business, which generates substantially more profit than similar wholesale services in many other countries. However, Profitel has stiff competition in the cellular (mobile) telephone business, and other emerging technologies (voice-over-Internet) threaten Profitel’s dominance. Based on these threats, Profitel’s board of directors decided to hire an outsider as the new chief executive. Although several qualified candidates expressed an interest in Profitel’s top job, the board selected Lars Peeters, who had been CEO for six years of a publicly traded European telephone company, followed by a brief stint as CEO of a cellular telephone company in the United States until it was acquired by a larger firm. Profitel’s board couldn’t believe its good fortune; Peeters brought extensive industry knowledge and global experience, a high-octane energy level, self-confidence, decisiveness, and a congenial yet strongly persuasive interpersonal style. He also had a unique “presence” that caused people to pay attention and respect his leadership.......

Words: 1355 - Pages: 6

Free Essay

Avon Case

...Avon Case Study Brief information about the domain of the company Avon is New York based 125 year old beauty product manufacturer that appoints the manufacture and marketing of beauty and fashion products, which has for over a century left a mark on millions of people throughout hundreds of countries The Company covers primarily North America, Latin America, Europe, and Asia Pacific. Avon’s products are classified into three categories: Beauty, Beauty Plus, and Beyond Beauty. The “Beauty” category consists of cosmetics, fragrances, skin care, and toiletries; “Beauty Plus” includes fashion jewelry, watches, apparel, and accessories; and “Beyond Beauty” comprises home products, gift and decorative products, candles, and toys. Avon earned a great reputation with its direct selling technique. This technique consists of selling the products directly to distributors or final consumers rather than trading companies or other intermediaries in order to accomplish greater control over the marketing function and to earn higher profits. The status of the company that led to its Determination that a change was necessary Several decades ago, Avon brought a perfect sagacity on many wives stayed at home, and some overprotective husbands didn't want them out shopping. Avon jumped up to the marketing arena with its growing fleet of representatives......

Words: 3292 - Pages: 14

Premium Essay

Product Case Study

...Products is an old company that was a leader in electrical products. Recently, it experienced a set of problems due to changes in the external environment and the culture of the company. In order to remedy this situation, board members hired a new CEO named Mr. Martin. Mr. Martin has a different approach than his previous CEOs to bypass the current situation. He would like to implement a management concept called empowerment. This concept consists of giving information, resources and opportunity to employees and makes them responsible for the outcome. Mr. Martin starts implementing this concept without taking into consideration the current culture and problems inside the company. The company was managed recently under traditional hierarchal organization style. This style consists of compliance rather than empowerment. In addition to that, there are a miscommunication between heads of departments and a high resistance to new changes. Top management might have done a better job changing Elektra Products into a new kind of organization by trying to address the current issues mentioned below and prepare the environment for employees to accept the new strategy. In fact, Mr. Martin might call all heads of departments individually and listen to them and understand their concerts and issues that are facing. Then communicate to them the plan that will be used to address this issues, the benefit that will gain by adhering to this strategy and the role that they will play in the......

Words: 324 - Pages: 2

Premium Essay

Austin Wood Products - Case Study

...Week 1 Case Study Austin Wood Products Week 1 Case Study – Austin Wood Products Introduction Austin Wood Products is a company based out of Austin, Texas, specializing in custom doors, frames, molding, and entry systems. The company currently employs 130 people, 120 of which are production employees. Their facility houses production, raw/component/finished inventory, administrative and corporate services, and their own local distribution operation. Being so highly immersed in the custom housing market of Austin and its many surrounding cities, much of the current production and material needs are based upon current trends in the housing and construction industry. This makes it more challenging to house an adequate stock of raw material, as production needs could potentially change faster than the company can anticipate. (Benton, Jr., 2014) Being able to meet customer desires with a fully customized product has always been the pride of Austin Wood Products. However, this presents many challenges for the company at an operational level, particularly in inventory and purchasing management. An estimated 87 percent of all purchases are raw lumber for production, yet there is no formal cycle count, material handling, or material resource planning procedure established within the company. Austin Wood Products conducts a physical inventory once a year, but it does not actively maintain accurate inventory records the rest of the year. According to Dave......

Words: 958 - Pages: 4

Premium Essay

Avon Case Study

...Avon Products, Inc. – 2013 A. Case Abstract Headquartered in New York City, New York, Avon Products, Inc. competes as one of the world’s largest direct-seller firm, and is the largest direct-seller of cosmetics and beauty-related items. Most of Avon’s sales come from its 6.4 million independent sales representatives (considered independent contractors) that serve in 110 countries. Avon employs 39,100 people and only 4,800 of them are employed in the USA. Avon generates 85% of their revenue from outside of the USA. Avon earned a net income of $517.8 million in 2011, but reported a loss of $38.2 million in 2012. The company has recently slipped in revenue due to currency rates and North American sales with a 13% drop in active sales representative. B. Vision Statement Actual: To be the company that best understands and satisfies the product, service and self-fulfillment needs of women – globally. Proposed: To be the company that provides the best foundation for women by offering a wide variety of products that appeal to any women’s needs and tastes. C. Mission Statement Actual (in summary due to length): 1) Leader in global beauty 2) women’s choice for buying 3) premier direct-selling company 4) most-admired company 5) best place to work and 6) to have the largest foundation dedicated to women’s causes. Proposed: Our mission as a company is to provide a unique portfolio of beauty, fashion and home brands to satisfy women globally. We encourage......

Words: 2067 - Pages: 9

Premium Essay

Avon Case Study

...Avon Case Study • For 113 years, Avon has used only direct selling. • In the late 1990s Avon was operating in over 135 countries with a sales force of more than 2.3 million independent representatives. • Avon Ladies – their representatives – handled 650 million customer orders and generate more than 2 billion US dollars in commissions per year. • The personalized, friendly customer service offered by Avon Ladies is considered a key competitive strength. • Company moved into China in 1990 and with the common cultural background and relatively new concept of direct selling in China, it appeared to be a promising opportunity. • Key issue/problem, which Avon encountered, was on April 21, 1998; the Chinese government announced an immediate ban on all direct selling. • In response to the ban in China, a course of action Avon could have taken would be to adjust their market strategy in order to continue their operations in China. • Once the ban was set into place by the Chinese government, Avon could have taken the time given by the government to obtain a retailers license. Opening a retail store, the Avon ladies could continue to apply the companies selling approach policy. • Although there could have been am alternative course of action for Avon, choosing to cease sales operations in China was the best course of action. • By ceasing sales operations, Avon was able to maintain their company policy, image, and their competitive strength. Questions: 1. Avon is seen as a...

Words: 614 - Pages: 3

Premium Essay

Avon Case Study

...example, those sectors such as automobiles, IT services and pharmaceuticals, with a high degree of international integration, are easy to transfer HR practices across borders. Furthermore, Edwards (2004, p.401-402) distinguishes between two forms of international integration: standardization and segmentation. He argues that “In those sectors in which MNCs have developed standardized operations, the transfer of employment practices is likely to be more attractive to management”; whereas “in MNCs which have segmented their international operations”, even where the degree of integration is high, “there will be little incentive to transfer practices across borders”. This is evident in many relevant studies. Examples include Japanese MNCs in Asian subsidiaries making low value-added products, which exhibit no transfer of Japanese employment relations (Dedoussis, 1995). One can expect a close linkage between MNCs’ degree of international integration and their international strategies. Porter (1990) identifies two generic MNC strategies: multidomestic and global. MNCs in sectors like foods and clothing tend to choose multidomestic strategies; whereas MNCs in sectors such as automobiles and pharmaceuticals are likely to choose global strategies. Linked with Porter’s theory of MNC strategies, Taylor and her colleagues (1996, p.966-968) define three strategic international HRM (SIHRM) orientations: adaptive, exportive and integrative. They propose that MNCs following a multidomestic......

Words: 4489 - Pages: 18

Premium Essay

Case Study: Electra Products, Inc.

...The following is an example of the process involved in writing a Case Study paper. The Case Study is found at the end of Chapter 1 of your textbook; Elektra Products, Inc. Items in red font are explanatory notes and would not be included in the finished product. Charles A. Student         20 Nov 2011 Elektra Products, Inc. The following summary identifies the basic substance of the situation, the key individuals involved, and the dilemma faced by the responsible manager. Summary: Barbara Russell, Elektra's Vice President of Manufacturing, has been tasked by Martin Griffin, Elektra's new President, to head one of the teams that will devise a plan to change Elektra's management style from a traditional top-down firm to a de-centralized organization that emphasizes employee empowerment in the management process. Ms. Russell forms an enthusiastic team that works extra hours to compile management changes that would allow employees at all levels to make decisions appropriate to their positions. However, When the recommendations are presented to department heads, they receive a cold reception when Mr. Griffin is called away from the meeting. Ms. Russell is now faced with the problem of implementing change against the resistance of the mid-level management. Question 1: How might top management have done a better job changing Elektra Products into a new kind of organization? What might they do now to get the empowerment process back on track? Note: Question 1 asks two...

Words: 604 - Pages: 3

Free Essay

Butler Products Case Study

...Butler Products Case Study for DBA 8230 May 8, 2012 Background The Butler family of products produces a wide variety of items. One of the manufacturing companies makes products in three finishing departments (A, B, and C), which have identical assembly operations but package the products differently for different lines of business. Each finishing line packages units as either single or multiple units per package. For allocating overhead, volume is defined in terms machine hours. Each department can package 1,140 single units per hour. Department A has the oldest equipment, which is in the last year of its depreciable life. Department N’s equipment is about half depreciated. Department C’s equipment is in the second year of its life. The budget prepared for each department in 2010 included the following costs, volumes, and overhead rates (given in millions of dollars): | A | B | C | Expected number of units | 73M | 73M | 55M | Fixed overhead | | | | General expense | $1.5M | $2.0M | $1.25M | Rent | $1.5M | $2.0M | $1.75M | Depreciation | $0.5M | $2.0M | $5.0M | Total fixed overhead | $3.5M | $6.0M | $8.0M | Variable overhead | $150/machine hour | $131/machine hour | $150/machine hour | Machine rate | 1,140 units/hour | 1,140 units/hour | 1,140 units/hour | Direct materials | $0.50/unit | $.052/unit | $.55/unit | Direct labor | $.015/unit | $.015/unit | $0.135/unit | The general expense portion of the overhead......

Words: 1136 - Pages: 5