Assignment on Management - Avon

Running Head: Management
Management

Management
Table of Contents
Introduction................................................................................................................ 2
Strategic opportunities and threats........................................................................................ 2
PEST......................................................................................................................... 2
Political Factors........................................................................................................ 2
Economic Factors...................................................................................................... 3
Social factors............................................................................................................ 3
Technological factors................................................................................................. 4
Strength and weaknesses of Avon........................................................................................ 4
Strength..................................................................................................................... 4
Weaknesses................................................................................................................. 5
Internal analysis.............................................................................................................. 5
Competencies and Resources of Avon................................................................................5
Porter's Five Forces Model................................................................................................. 6
Threat of new entry....................................................................................................... 7
Bargaining Power of Customers........................................................................................ 7
Bargaining Power of Supplier.......................................................................................... 8
Threat of substitutes...................................................................................................... 8
Rivalry among the existing firms...................................................................................... 8
Porter Generic Strategies........................................................................................... 9
Cost leadership....................................................................................................... 9
Differentiation......................................................................................................... 9
Focus....................................................................................................................... 9
Ansoff's Strategies........................................................................................................... 9
Market penetration........................................................................................................ 9
Product development................................................................................................... 10
Market development.................................................................................................... 10
Diversification........................................................................................................... 10
Conclusion................................................................................................................... 10
References................................................................................................................... 11

Management
Introduction
Avon is an American company that manufactures and sells beauty products globally. The
company started the operations in 1886. The products of the company are categorized into
beauty, fashion, and in the household sector. The beauty division has categories related to skin
care, color cosmetics and also fragrances. Fashion consists of footwear, accessories, Jewelry and
children products. In the category of the household products, the company offers decorative
products, gifts and also nutritional products. The company conducts the operations in 65
countries and also offers products in 42 countries. In the first phase of the report, the main
focus is given on the PEST analysis and also on the competencies of the Avon Company.
Pest analysis elaborates about the political, economic, social and technological factors.
In this report, the discussion will be made on the strength and weakness of Avon
Company and also Porter's five forces Model will be explained. In the last phase of the report,
the focus will be given on the strategies of growth that should be taken into consideration by
Avon to survive in the competitive market. Ansoff’s strategies like market penetration,
product development and market development are also taken into consideration.
Strategic opportunities and threats
In the beauty industry there are various opportunities that are available for the company.
Avon has an opportunity to restructure the initiatives for attaining the effectiveness. Innovation is
considered as an important aspect that helps the company to enhance the products and
profitability of the organization. The new and effective products should be invented by the
company. Avon has the opportunity to develop more natural products and also to acquire large
market that enhances the profitability of the organization (Burkhart, 2014). The pest analysis is
conducted to analyze the threats and opportunities that the industry is facing:
PEST
Political Factors
Political factors play an important role in conducting the day to day operations of the company.
Avon conducts the activities that are related to the personal and beauty products. To attain
success in the industry of personal products it is essential to consider the political factors that can
enhance the smooth working pattern of the organization. The company has used the website for

Management
marketing its products globally and also it has followed the copyright policy of the United
Kingdom. There are many regulations that are applied on online purchasing and also that have no
control with the seller. There are various regulations that are applied when the purchase is made
by the consumers from the business (Wolf, 2013).The company also has a trademark that needs
legal documents which gives permission to conduct the activities of the organization. Avon has
also protected the trademark so that the consumers can buy without any difficulty and with
proper safety. The product of the company covers many countries and also gives many
approaches to women, to achieve financial independence and good performance. The products
are provided at low cost and also various discounts are offered by the company. If political
differences are taken into consideration among the countries, then it can give direct influence on
the corporate strategy of the company (Rothaermel, 2015).
Economic Factors
It is one of the dominant factors that give direct impact on the buying behavior of the
customers for Avon products. The economic condition, inflation and also interest rate are taken
into consideration at this point. The company is also affected by the fluctuation in the currency
rate. This is considered as one of the important factors that give direct impact on the operations
of the company (Fayol, 2016).There are 5.3 million representatives employed by the company
and it offers products to sell in the market. The demands of the products are also affected by the
economic ups and down. For example: In U.K the demand for the cosmetic products has
increased. It clearly shows that at the time of recession the demand for the products increases. In
this, the labor cost and productivity are also taken into consideration by the company (Vega and
Fuks, 2013). In this factor, the impact is also given on the economic growth rate and on the
unemployment rate. Economic factors take into consideration inflation rate, interest rate
and the cost of labor and productivity in the economy.
Social factors
The taste and preferences of the consumers keep on changing from time to time and also
they are concerned with the local culture and personal working conditions. In different countries,
just because of climate and environmental circumstances the need of the product also goes on
changing. The company offers different cosmetic products for the consumers and this is one of