Analyzing Change and Risk: Amway's CRM Implementation and Performance

This report provides a comprehensive analysis of Customer Relationship Management (CRM) implementation within Amway, focusing on change and risk management. It begins with an executive summary, followed by an introduction to change management and its importance in business. Task 1 ...Read More

Change and Risk
management

Table of Contents
Executive Summary.........................................................................................................................3
INTRODUCTION...........................................................................................................................4
TASK 1: Customer Relationship Management and its Implementation in Amway .......................4
TASK 2: Michael porter's 5 forces .................................................................................................5
TASK 3: Impact of CRM on the Amway's business performance.................................................7
Challenges: -...........................................................................................................................8
TASK 4: Challenges and Issues faced by Amway in CRM implementation – IT Governance ...10
TASK 5: Solution, long term plans, competitive strategy ............................................................11
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13
BOOKS AND JOURNAL ...................................................................................................13

Executive Summary
This assessment states the impact of a change or risk on an organisation. The Impact of
CRM system is described within this report which includes the implementation of CRM,
requirements to adopt the CRM system and its impact on the various activities of the business.
The report will also describe the various approached or methods used for adopting the CRM
system within the Amway company. Moreover, the study includes various challenges or issues
faced by the company in implementing the CRM system. The report states that Customer
relationship management (CRM) helps an organisation build effective relationship with the
customers.

INTRODUCTION
Change management is a very important aspect of an organisation which helps in
managing the change or risk faced by a business firm. It uses various tools and methods to
reduce the risk or negative impact of the change. This report includes case study of Amway
which will identify the various elements that can affect the business while implementing
Customer Relationship Management (CRM). The study also includes various challenges faced
by the organisation while adopting change and reducing the risk or issues. Furthermore, the
report will analyse and determine the long-term benefit and competencies involved in adopting
or implementing the change.
TASK 1: Customer Relationship Management and its Implementation in
Amway
Customer Relationship Management is known as the strategies, technologies and practices which
is used by an organisation in order to analyse and manage customer communication or
interaction as well as data throughout customer life-cycle for the objective of improving the
relationships with the customers of the company. It also helps in increasing the sales growth and
gaining customer loyalty (Doppelt, 2017). This is created in order to combine the information
related to the customers across various channels or the point of contact among the company and
customers. They may consist of live chat, social media, telephone, direct mail and various
marketing materials. Amway plans to design an online CRM system to offer effective services to
the customers in order to obtain suitable information such as buying preferences, purchase
history etc. Also, it introduced CRM software compile various document and customer related
information into a single CRM database so that the organisational users can easily manage and
access it. The other major functions of the Customer relationship management are to record
customer calls, email, social media networks and other channels. The other common features of
the Amway's Customer relationship management software are as described below -
 Automation of sales force – It is also referred as sales force management, It is developed
in order avoid duplicate efforts between the customer and salesperson. The CRM system
can assist the company to achieve this by tracking the contacts and follow-ups between
the two automatically.

 Marketing automation – Customer marketing tools consisting marketing automation
abilities can automate the repetitive operations in order to enhance marketing or
promotional efforts to customers at various points in the life-cycle(Strategy,2015).
 Contact centre automation – The contact centre automation helps to resolve problems and
issues faced by the customers by pre-recorded audio.
The Amway plans to make effective use of the CRM software to develop and maintain a good
relationship with its customers. The implementation of the CRM software was a great decision
by the company to build a leading position within the market and opportunity to gain competitive
advantages (Gattermeyer and Al-Ani,2013).
TASK 2: Michael porter's 5 forces
The Michael porter's five forces model is a tool to analyse completion among the
businesses or companies. It is a business analysis approach which help in explaining the reason
why various companies are capable to preserve different levels of profitability.
Amway is an international and leading brand which uses multi-level and effective
marketing methods in order to sell beauty, health and home care goods or products. There are
various elements or forces in the business environment that affect the working culture or
business operations of the company. In order to identify these elements, we will apply Michael
porter's 5 forces model in order to find out various forces affecting the Amway company within
the market place. Porters model of competitive forces or elements implies that there mainly five
competitive forces that determines the competencies in an organisation situation. These five
forces are as follows -
1. Threats of substitute products
2. Threats from new entrants
3. Rivalry within the existing competitors
4. Bargaining power of the suppliers
5. Bargaining power of buyers
 Threats of substitute products – The Amway is popular for its products related to
health and beauty care as well as home care products. The company faces a tough
competition by the different rivals present within the marketplace. There are various

companies introducing substitute products like Amway. The customers can find the
services or products that Amway offering at the same or less price easily. Threat of
subsistent is high when the competitors offer better quality, substitute product offered by
a high profit earning company so it can decrease the price to the lowest level. The
customers can easily transfer to the substitute products; therefore, these products can be a
threat to the Amway company.
 Threat of new entrants – New entry of rivals within the marketplace can weakens the
power of the Amway. Threat of new entrants depends upon exit and entry barriers, threat
of new entry is high when few economies of scale are within place, customers can switch
to low cost, if the technology of Amway is not difficult to adopt or is not well protected,
if the product is not specialized. There are certain situations when the weak or low
performing organisations leave the market very easily when new companies enter.
 Industry competition – It refers to intensity or level of competition among the exiting
rivals or competitors in the market. The number of competitors and their ability
determines the intensity of the competition in the industry. Amway already have a lot of
competitors in the market such as ITC, Oriflame etc. These competitors can be threat for
the Amway as they offer similar products at the same or low price which can attract the
customers and decrease sales of the company. This competition give rise to price wars,
marketing or advertising wars, fluctuating cost etc which is difficult to compete.
 Bargaining power of the suppliers – It states the strength of the Amway's market
position, the control of the supplier over the increasing supply price. The power of
suppliers is more when they are well organised and concentrated, the company is not
much important for the supplier, the products are unique and more effective or the cost of
switching from one customer to another is high. When the suppliers have more power or
control over the supplies and the prices are less attracting. It is the most effective method
to develop a good relation among the suppliers.
 Bargaining power of buyers – This refers to the power and control of the customers or
buyers have in order to decrease the price of the products. The buyer can decrease the
price of the products at situation when they buy the products in large volumes. The power
of bargaining within the buyers is high when they purchase products in large quantity, the

cost of shopping is low, few buyers demanding a lot of products, customers are price
sensitive etc.
TASK 3: Impact of CRM on the Amway's business performance
Customer relationship management (CRM) refers to strategies, practices, technologies
which are used by the organisations in order to analyse and manage customer data and
interaction with the objective to improve relationship with customers and help in customer
retention and drive the sales growth(Khoda,karami and Chan,2014).
The Customer Relationship management system may not be as exciting as the various
social networking websites such as Twitter or Facebook, but it offers similar functions. This
system focusses on people and relationship, this is the reason it is valuable for the company. The
CRM system is an important area for day to day business operations. The Amway company can
effectively gain significant information about their customers such as preferences, choices,
purchasing power. The Customer relationship management system is very valuable for the
Amway as it’s an effective proven and tested method to achieve long lasting growth and
Illustration 1: Porter's Five Forces

development. Each and every CRM solution requires planning effectively, within the long run it
is paying to gain the support of specialised or experienced professionals. An effective and good
Customer relationship management system helps the Amway to achieve profitable customers and
serve the existing customers in a better way. Customer relationship management is very
necessary process in the organisation. Through it, company can able to increase satisfaction of
the entire customers. There are different types of impacts, which can be good and bad for the
company. Along with this, through CRM, they can increase their profitability and revenues of
the business. Through it, customers can easily get the solution and then they will satisfy from the
services if the Amway organisation. When they will be able to provide effective services to the
customers, then they will be satisfied from the services if the company. Customers can easily get
the products and services from customer relationship management. When they maintain the
relationship between customers and company, then they will attract to the company and their
products and services. CRM is very effective process in the organisation., through its customers
can call the call centre of the company and tell their all problem to the customer care executive.
Further, they will see the reason of problem then customer care executive will provide them
better solution to the customers (Tseng and Wu, 2014).
Challenges: -
Each and every company need some effective process in the company, but when they
maintaining the CRM inn their organisation, they face number of problem and challenges in the
business. According to managers, they are facing the problem about the customer's satisfaction.
Sometime, customers care executive are not able to provide appropriate solution to the
customers, then they can be demotivated from the services of the organisation. It is the biggest
challenges of the company which can be not beneficial for the company. Other than that, there
are number of people who are using the services and products of the company. Then organisation
can not able to provide quality product some time to the customers and it is very biggest
weakness and challenge of then customers (Khattak, Latif and Lee, 2013).
Through it, they cannot get faith and loyalty of the customers and they can lose the
customers. Other than that, one of the important challenge is the finance problems in the
company. Amway maintain the CRM department in their organisation, but also, they are facing
the financial problem in their business. When they provide the solution of the customers, then
they require fund tom manage the all customer's relationship management in the organisation. It

is very biggest challenge of the company. Company can solve this types of problem and
challenge through some effective source of the fund. They can arrange the fund from different
types of sources like bank, finance company and market share. It is the very effective source of
the arranging the fund in the business. Through it company can provide effective services by
customer relationship management in the business. Along with this, customers also will be
satisfied from the services and product of the Amway company. Other than that, company can
face some challenges from the market which can be external challenges for the company in their
business. That challenge can be solved easily but company cannot solve finance problem in their
business
Amway apply porter's generic strategy to focus on differentiation or cost leadership. The
Porter's is targeting on three elements which are differentiation, cost leadership and focus which
can be applied on any type or size of organisations. It states that a company should choose only
one of the three elements to reduce the wastage of the important resources.
Illustration 2: Porter's generic strategies

TASK 4: Challenges and Issues faced by Amway in CRM implementation –
IT Governance
The Amway face a lot of issues and challenges in comparing the annual finance statement
sue to lack in technology or analysis tools. The company needs to have an effective system to
identify, collect and analyse important data for measuring the income or loss of the business. The
Amway has a weak online or IT system due to which it fails to compare the financial statements
or the competitors within the market.
The CRM implementation is a critical process which requires effective efforts as it
includes many elements such as Marketing automation, Sales force automation etc. Amway
company faces different issues and challenges in implementing the CRM, these challenges are
described below -
 Setting clear goals – Amway must have specific goals which they would like to achieve
with the help of CRM. These goals require to be measurable and specific, if the
organisation can not define their goals it is not possible for them to assess impact of CRM
system on the business.
 Developing an effective CRM team – The CRM initiative cannot be considered as IT
project, Amway needs to create an effective team involving employees from various
levels within the company such as senior executive, Top level management, IT and
customer service. Only when necessitate are fulfilled they should be handed over to IT
department for implementing.
 To define the business operations – It is very essential for the business activities to be
defined clearly and performed effectively for setting the CRM project with a motive of
achieving success. For this purpose, Amway can create a central facility which can be
accessible by everyone and contains all the definitions related to the process. The main
processes that need to be clear are Feature Re-evaluation process, Change management
process etc (Bateh, Castaneda and Farah, 2013).
 Managing the application – Every organisation needs to ensure that the organisational
activities are mapping with the CRM application. This implies that the end users must
perform the daily business activities through the CRM application.
 Finding appropriate partner – The rate of success for CRM increases with the most
appropriate CRM development solution partner. Amway needs to choose a right solution

partner who can perform both planning and implementation. It is significant that
Amway's partner shares the challenges and risk of their CRM implementation (Haslam
2014.).
TASK 5: Recommendations
Investing in the CRM (Customer relationship management) is very important for Amway
or any other company. CRM system assist a business to create and manage effective relationship
with its customers as well as improve the long-term profitability of the organisation.
Additionally, it also provides secure access to customer information and data, facilitate
collaboration and helps a business to perform the business operations effectively with the proper
information. The challenges or issue in implementation of CRM can be resolved and reduced by
using various strategies and plans which are as described below -
 Evaluating Business needs and expectation – Before implementing or using the CRM
system an organisation needs to ensure that its IT infrastructure is strong and capable of
performing the various business operation with the goal of achieving the organisational
and CRM objectives. The various question arises while adopting the CRM system are -
1. The budget plan by the organisation of CRM ?
2. Do the employees have technical skills to use CRM system?
3. What all features should the CRM offer?
 Integrating Existing Applications – While implementing the CRM system an organisation
should identify and determine that the new system can integrate with the existing
business operations and application in the business. Mainly the small size companies face
struggles and issues with integrating the accounting operations with the Customer
relationship management system, but in order to build an effective relationship with the
customers the businesses manage to integrate the various business operations with the
CRM system(Hayes,2014).
 Maintaining Data quality – In order to achieve goals out of the CRM system an
organisation needs to ensure that the CDQ (Comprehensive data quality) program is
effectively performing its tasks such as cleansing, sharing updates and data conversion.
This helps in maintaining good quality of data which can be used by the CRM system in

order to build an effective and successful CRM system and create a long run comparative
benefit for the organisation.
CONCLUSION
The report concluded that Customer Relationship Management (CRM) is very essential
for an organisation in order to build good relations with the customers and gain long term
benefit. The organisation such as Amway faces lots of challenges which have been identified by
applying Michael Porter's 5 forces model plus risk or threats of implementing the CRM system
are described briefly in the report. Furthermore, the report also includes the impact of CRM on
the business and strategies to overcome the challenges of implementing CRM.

REFERENCES
BOOKS AND JOURNAL
Hayes, J., 2014. The theory and practice of change management. Palgrave Macmillan.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Strategy, C.B., 2015. Customer Relationship Management as a Customer-Centric Business
Strategy.
Haslam, S.A., van Knippenberg, D., Platow, M.J. and Ellemers, N. eds., 2014. Social identity at
work: Developing theory for organizational practice. Psychology Press.
Khattak, A.M., Latif, K. and Lee, S., 2013. Change management in evolving web
ontologies. Knowledge-Based Systems, 37, pp.1-18.
Gattermeyer, W. and Al-Ani, A. eds., 2013. Change Management und Unternehmenserfolg:
Grundlagen—Methoden—Praxisbeispiele. Springer-Verlag.
Bateh, J., Castaneda, M.E. and Farah, J.E., 2013. Employee resistance to organizational
change. International Journal of Management & Information Systems (Online), 17(2),
p.113.
Tseng, S.M. and Wu, P.H., 2014. The impact of customer knowledge and customer relationship
management on service quality. International journal of quality and service
sciences, 6(1), pp.77-96.
Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management
(CRM) systems in customer knowledge creation. Information & Management,51(1),
pp.27-42.