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Avon Strategic Plan

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by

Lauren Taylor

on 10 December 2013

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Transcript of Avon Strategic Plan

Historical Analysis of Avon
David H. McConnell
Direct selling business model
Andrea Jung
Sherilyn S. McCoy

Historical Analysis of Industry
History of the industry
Fragmented, secretive and often family owned companies
Entrepreneurial
Easy to enter but difficult to succeed in
5 forces of competition
Has historically found pressure
Marketing Techniques
Television, Hollywood, ect.
Business Policy and Strategy
Avon Products, Inc.
Raul Ariza
Sandrali Santiago
Lauren Taylor
Evan Watkins

Strategic Plan
The Estee Lauder Companies
L'Oreal
Mary Kay, Inc.
Revlon
Key Competitors
Societal values and lifestyles
Marketing techniques
Competitive pressures/actions of rival firms
Increase in competition
Diversity of products/brand name
Environmental Factors


Agenda
History
Avon, Cosmetic industry & key competitors
Current analysis
Avon and cosmetic industry
Strategic plan
Television Commercials
Television Commercials
Then

Avon's Current Strategy
Broad differentiation Strategy
Provide value through diversification
Incorporate tangible features that improve product performance
Research & Development
Robust intangible features that increase buyer satisfaction
Avon's Competitive Advantage
Direct selling business model
6 million independent sales representatives in over 100 countries
Avon Foundation for Women
Avon Breast Cancer Crusade
Domestic Violence Against Women
3 Tests of a Winning Strategy
How does Avon's strategy fit the enterprise's situation?
Strategic Vision & Mission
SWOT Analysis
Finance & Accounting
Marketing Analysis of Avon
Is this strategy helping Avon achieve a sustainable competitive advantage?
Is Avon's strategy producing strong company performance?
“To be the company that best understands
and satisfies the product, service and
self-fulfillment needs of women—globally,”


Avon's Financial Outlook
Five Forces Model
Dominant Industry Economic Features
Avon's Strategy Moving Forward
Defensive Strategies
Strategic Financial Outlook
Strategic Marketing Outlook
Marketing Analysis of Competitors
Relevant Industry Economic Factors
Current Driving Forces
Avon's Management
Under an ongoing investigation with the Foreign Corrupt Practices Act
4Q'12 showed early signs of stabilization in Avon's Latin American and European core markets
Refinanced maturing debt and used $400 million of cash to reduce leverage
$400 million cost savings program announced at Year-End 2012 coupled with the exiting of South Korea and Vietnam markets
L'Oreal
Revlon
Mary Kay, Inc.
The Estee Lauder Companies
Current Driving Forces
Emerging new internet capabilities & applications
Product innovation/manufacturing process
Increasing globalization
Changes in long term industry growth rate
Offensive Strategies
Avon's Corporate Social Responsibility
Strategic Management Outlook
Now
Buyer Bargaining Power (High)
Substitute Products (High)
Supplier Bargaining Power (high)
Potential New Entrants (High)
Rivalry Among Competing Sellers (High)
Move to a concentrated market niche
Out compete rivals
Customize cosmetic products that exceed consumer expectations
Focus on luxury and prestige
Attacking the competitive weakness of rivals
Pursuing continuous product innovation
Adopting & improving on the good ideas of companies
Deliberately attacking market segments
Focusing on less contested market territory
Actions used to restrict competitive attack
Features, model, product line
Strong retaliation
Dissuade challengers from attacking
Signals to challengers
Macro economic challenges
Inching out of a global recession
Cheap credit for large corporations
Increase demand for cosmetic products in emerging markets
Market size & growth rate
Scope of competitive rivalry
Global
Demand - supply conditions
Tighten margins
Increase margins through value chain efficiency
Market Segmentation
Rapid change in consumer preferences
Technological change
Online shopping, marketing through social media (i.e. Facebook & Twitter)
Board of directors
Senior management
Consists of 12 business professionals
Sherilyn S. McCoy
Current CEO
New & modified products
Pricing strategies
Distribution
Advertising & promotions
Foundations for Women
Provided awareness, fund raising programs and research for breast cancer
Programs against domestic violence
Representative programs to encourage Independent Women
Mark Youth Program
Emergency Relief Programs
Sustainability program
Hello Green Tomorrow
Elements to engage consumers
If none, could result in loss of valuable interaction
Increased sampling
Guerilla warfare tactics
Buzz marketing
Implement new initiatives for the company
Focus and fix near term and long term challenges
Stronger leadership
Geographic portfolio
Consumer suggestions
New management team
FY2012 Revenues by Geography
FY2012 Revenues by Product Category
Avon's Revenue Overview
Focused differentiated strategy
Any Questions?
Full transcript