Leadership and Change Management: Avon Case Study Report

This report examines leadership and change management through a case study of Avon. It begins with an introduction highlighting the importance of leadership in achieving organizational objectives and then delves into a strategic audit of Avon, including an overview of the company's history, mission, vision, values, organizational culture, structure, and resources. A stakeholder analysis and Greenley's classification are also provided. The report continues with an external audit using strategic group mapping and industry life cycle analysis, followed by a PEST analysis. A SWOT analysis is then presented to identify the company's strengths, weaknesses, opportunities, and threats. A TWOS matrix is used to develop strategic options. The report concludes with a discussion of strategic options using the SAF framework, covering corporate and business-level strategies, analyzing their suitability, acceptability, and feasibility. The report provides a comprehensive analysis of Avon's strategic position and potential strategic directions.

Running head: LEADERSHIP AND CHANGE MANAGEMENT
Leadership and Change Management
Name of the Student
Name of the University
Author’s note

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Section 1. Introduction
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.
Section 2. Strategic Audit
Internal Audit
Overview of the company
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

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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).
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).

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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).

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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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Customers
Shareholders
Employees
Sales representatives
Management
Owners Government
Figure 2: Shareholder mapping
Source: (Ayuso et al. 2014)
Organization’s resources and capabilities
Greenley’s Classification of resources
Resource Capabilities Operation Capabilities ManagementCapabilities
 Skilled sales people
 Continuous
innovations with
products
 Nil
Level of interest
Le
vel
of
Infl
uen
ce
(po
we

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Porter’s Value Chain (Refer to appendix)
Primary Activities
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.
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).
Support Activities
 Procurement (purchasing) – The company endorses third party companies and also
manufactures their own products. They have contracts with the suppliers of raw material

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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).

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Laura Mercier
Clinique& MAC
Maybelline and L’Oreal
Avon
Lancôme
sisley
Geographical coverage
Price and quality
External Audit
Strategic Group Mapping
Figure: Strategic mapping
Source: Author’s creation

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Industry Life Cycle
Figure: Industry Life Cycle
Source: Author’s Creation
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).

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PEST Analysis
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.
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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Section 3. SWOT Analysis
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)
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)
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)