AVON Company Overview
The success of an organisation depends on achieving the objectives that has been set as a result of strategic management. This success depends on a lot of factors and leadership in the organisation is one of the most important factors as it not only drives other people to strive towards achieving the goals and objectives of the company but also ensures that the policies and decisions that are made in the process are ethical and are based on the principles and values of the company (Babnik et al. 2014). In this assignment the case of AVON is going to be studied in order to understand the concepts of management and leadership. There is a section dedicated to the strategic audit which will help in identifying the micro and macro business environment as it impacts the operations of the business hugely. In order to understand the prospect of the business a SWOT analysis is going to be undertaken as it is an extension of the strategic audit section. Strategic options, strategic selections and Project implementation needs are also going to be studied in the paper.
Established in 1886, Avon Company was founded by David McConnell. The company is based out of New York, USA and is regarded as a benchmark organisation in terms of accomplishing success with direct selling strategies. The company began as a fragrance manufacturer and now it has a plethora of products which ranges fromcosmetics to home and health care items. There are several award winning and industry recognized products which has becomeiconic for the company. Over the years the organisation has gathered reputation in the industry for being women centric and recruiting more women in management and higher position than men. According to founder David H. McConnell he had created this company to “to meet fully the obligations of corporate citizenship by contributing to the well-being of society and the environment in which it functions.”Andrea Jung was appointed as the CEO of Avon in 1999 and the company went through a lot of turmoil during her tenure. Sherilyn McCoy was then made the CEO but inMarch 2017 she also stepped down (About.avon.com 2018).
Mission statement
Tohelp in improving the lives of women on a global platform
In order to reach or achieve this mission the company focuses on issues of the society that are surrounding women like Breast Cancer and domestic violence. The company aims to contribute towardsdevelopment, credibility and innovation (Avonfoundation.org 2018).
Mission and Vision Statement
Vision statement
The vision of the company is to provide for the products, services and self-fulfillment needs of the women on an international scale.
There are five values which are used forfulfilling the aforementioned mission: Trust, Respect, Belief, Humility and Integrity(Avonfoundation.org 2018).
Organisation culture web
The objective the company is to offer the women around the globeassistance to make them feel good about themselves. The organisation is focused on achieving valuable customer service as well as building employee relationship (McDonaldand Foster2013).
Stories: The company wants to establish bonds with women around the globe since 1886 so that the company can help them achieve economic independence and also support them to transform their lives.
Symbols: The Company has a very distinctive logo which is simple but effective, andeveryone has sometime or the other come across their logo, which is in simple font. Another symbolic aspect of the company is the fact that it is known for setting benchmarksin achievements in the domain of direct selling. This is one of the major aspects of the company and its achievements in the long-run (McDonaldand Foster2013).
Power structure: The greatest amount of influence on the company is from the position of the CEO, whichis the highest rank of management that is present in the power structure of the company.Any strategic management decisions of the company follows through this position. Apart from this there are the Vice Chairman, Executive Vice Presidents, and Senior Vice Presidents for each of the six regionsas well (Babnik et al. 2014).
Organizational structure:The company follows a flat organisation structure as most of the operation is done with the help of direct selling. The company has operations in 63 countries and the sales are accelerated with the help of direct selling and marketing. There is a hierarchy in the management where the power structure is followed but the operations and the sales of the products are initiated with the help of sales representatives (Cacciattolo 2014).
Control system:The company follows rigorous quality checking process ineach of the countries of operation, ensuring that they can adhere to the rules and regulations of the country. The company has several award winning products in their product mix (Al Saifi 2015).
Rituals &Routines: The products are distributed and delivered with the help of the representatives of the company and they ensure that the products are delivered to the customers on time (McDonaldand Foster2013).
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Resource Capabilities |
Operation Capabilities |
ManagementCapabilities |
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· Skilled sales people |
· Continuous innovations with products |
· Nil |
Inbound logistics – The company has a cordial relation with the suppliers and the distributors as it has one of the largest direct selling network.The company falls back on this aspect in order to ensure that the process is holistic and fulfilling.
Organizational Culture Web
Operations – This is the value creation function of the company.he operations of the business is based on the manufacturing, and the product directly reaches to the end customers (Alcacerand Delgado2016).
Outbound logistics – These are the functions of the company that help in deliveringthe product to the customer. The sales representatives are the ones who are the most important elementin this function.They are responsible for the sales and the profitability of the company.
Marketing and sales – With the help of offline and online brochures that are published every month, the company ensures that the marketing of the products are on point.
Service – The after-sales services are also provided by the representatives.In case there is a product which is faulty or is damaged,the representative can be contacted and the product can be easily replaced (Alcacerand Delgado2016).
- Procurement (purchasing)– The company endorses third party companies and also manufactures their own products. They have contracts with the suppliers of raw material and third party companies whose products are listed in the company brochure (Nag et al. 2014).
- Human resource management– The HR of the company is mostly the representative who pushesthe sales, the management and the administration staff, as well as the people who are responsible for developing and production of the commodities. The company ensures that the employees are committed and motivated to join in fulfilling the objectives of the company.
- Technological development–Communication and development technologies are included in order to help in co-ordination and research and development.
- Infrastructure –Headquarter of the business is situated in New York and there are six other main offices around the world. The products and services of Avon is available in 63 countries (Nag et al. 2014).
The position of the company in the Industry Life Cycle is in the starting phase of the decline section as the company has been through several ups and downs due to some of the negative management decisions taken by the leaders of the company (Karniouchina et al. 2013).
PEST Analysis
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Political · The government rules and regulation of the country of operation impacts the company. · The labour laws, trade laws have to be adhered with while in operations (Gupta 2013) |
Economic · The exchange rate, inflation rate, tax laws and the overall economic condition of the country in which Avon operates impacts the operation. |
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Societal · The company combats the stereotype of women and strives to overcome some of the societal issues that women face globally, it is important for the company to operate in countries which allows this vision |
Technological · The organisation uses manufacturing and production technologies which help in reduction of the cost (Gupta 2013) |
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Strength · Skilled resources · Diversification through partnership · Wide brand appeal · Strong brand image · Goodwill in the industry · Marketing and sales process · Award winning beauty products · Product mix catering to a wide range of consumers from all over the world(Bull et al. 2016) |
Weakness · Weak management · Lack of financial stability · Gap in communication within the organisation · Gap in communication with the customers and other stakeholders · Excessdependence on Sales Representatives(Hilton and Platt 2013)
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Opportunities · The company can expand in countries where the opportunity for women are less · The company has opportunity to restructure the strategic management decisions · To employ strong leaders(Hilton and Platt 2013)
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Threat · Stiff competition from Procter & Gamble · The company is facing competition from many emerging companies in different countries as well · Flexibility to enter the market for new companies (Bull et al. 2016) |
Due to the brand image and the values that the company has built over the years,theyhavethe strength to get back up on the feet.The organization, with the help of the opportunities of marketing and re-structuring of the management, can along with the strengths that are mentioned,easily combat the threat in the external environment(Hilton and Platt 2013).
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Strength |
Weakness |
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Opportunities |
SO · Killed resource in terms of employees and sales representatives can be implemented to create effective management policies and decisions. · With this planning process the company can invest and explore more geographical regions. |
WO · With the opportunity of employing new people in the managerial position the company can overcome some of the issue of gap in communication in every aspect(Wetherly 2014) |
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Threat |
ST · The company can build on the brand image that they already have.The goodwill and the reputation of the company will help it togain advantage over the existing and upcoming threat(Wetherly 2014). |
WT · Due to the financial instabilitythat the company is facing, it is a scope for the existing competition to grab the market share of the Avon · The excess dependence on one operational function can impact the other departments which can act as a scope forthe new organisations in the market (Wetherly2014) |
Corporate level strategy: The company can merge with another cosmetic company and work with the support of a bigger brand like L’Oreal or Mac cosmetics. In this way the management of the company will be restructured.
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Suitability |
Suitability of the Strategies are medium as the strategy contains risk and also there is a common ground that the companies involved has to agree upon. |
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Acceptability |
If a big brand supports AVON then the brand image that is already there will be enhanced. |
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Feasibility |
The case of Wesfarmers undertaking Coles is one of the examples of such situations. With the help of the parent company Coles have got back that position it had during its glory days |
Business level strategy: The company can diversify by introducing a product line which provides natural cosmetics and is organic in nature. The company can invest in getting new formulas in this line and get it certified by authoritative bodies who provide authentication of products being organic.
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Suitability |
It suits the image and the value of the company. |
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Acceptability |
It will be accepted by the customers as there are many cosmetic companies who have come up with successful herbal lines |
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Feasibility |
There is a research and development unit in the organisation which can support this strategy to develop organic formulas. |
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Strategy |
Resources |
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Corporate level strategy |
· Management skill · Legal resource · Communication and technological resource in order to initiate the process of merger and acquisition · Expertise toexpedite theprocess |
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Business level strategy |
· Research and development unit · Skills to ensure correct formulation of the products · Designers to check the process of external appearance of the new product line · Manufacturing unit · Certification · Human resource |
Conclusion
It can be concluded from the above discussion that Avon still has opportunity to fight back into the competitive market and get back their days of glory.One of the major strength of the company is that they focus on their employees and work towards anulterior motive than just achieving business objectives. The company has to ensure that the management is replaced or re-structured in order to re-strategise the policies and develop decisions based on the dynamics of the industry.
Reference list:
About.avon.com., 2018. About Avon. [online] about.avon.com. Available at: https://about.avon.com/us-about/company/about [Accessed 21 Mar. 2018].
Al Saifi, S.A., 2015. Positioning organisational culture in knowledge management research. Journal of Knowledge Management, 19(2), pp.164-189.
Alcacer, J. and Delgado, M., 2016. Spatial organization of firms and location choices through the value chain. Management Science, 62(11), pp.3213-3234.
Avonfoundation.org., 2018. Vision and mission of the company. [online] avonfoundation.org. Available at: https://www.avonfoundation.org/about/mission/ [Accessed 21 Mar. 2018].
Ayuso, S., Rodríguez, M.A., García-Castro, R. and Ariño, M.A., 2014. Maximizing stakeholders’ interests: An empirical analysis of the stakeholder approach to corporate governance. Business & society, 53(3), pp.414-439.
Babnik, K., Breznik, K., Dermol, V. and Trunk Širca, N., 2014. The mission statement: organisational culture perspective. Industrial Management & Data Systems, 114(4), pp.612-627.
Bull JW, Jobstvogt N, Böhnke-Henrichs A, Mascarenhas A, Sitas N, Baulcomb C, Lambini CK, Rawlins M, Baral H, Zähringer J, Carter-Silk E. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem services. 2016 Feb 1;17:99-111.
Cacciattolo, K., 2014. Understanding organisational cultures. European Scientific Journal, ESJ, 10(10).
Cacciattolo, K., 2014. Understanding organisational cultures. European Scientific Journal, ESJ, 10(10).
Gupta, A., 2013. Environmental and pest analysis: An approach to external business environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), pp.13-17.
Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic business environment. McGraw-Hill Education.
Karniouchina, E.V., Carson, S.J., Short, J.C. and Ketchen,David J.,,Jr 2013, “Extending the firm vs. industry debate: Does industry life cycle stage matter?”, Strategic Management Journal, vol. 34, no. 8, pp. 1010.
McDonald, S. and Foster, R.A., 2013. The use of Johnson’s Cultural Web to improve understanding of organisational culture: a critical review. International Journal of Management, 30(4), p.340.
Nag, B., Han, C. and Dong-qing, Y. 2014, “Mapping supply chain strategy: an industry analysis”, Journal of Manufacturing Technology Management, vol. 25, no. 3, pp. 351-370.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford University Press.
Wronka-Po?piech, M. and Fr?czkiewicz-Wronka, A., 2016. Strategic Orientation and Organisational Culture in Polish Public Organisations: Insights from the Miles and Snow Typology. Management, 20(1), pp.126-141.
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