Analysis Of Strategic Change In Avon Commerce Essay

The main aim of this statement is to research an organisation that is going through major proper change. First of all the survey will express the change that is adopted. It will then evaluate the efficiency of the change strategy in conditions of the organisation's framework, culture and politics.

Organisation Background

The organisation that is determined is Avon Cosmetics Limited. Avon is a global manufacturer and marketing expert of beauty and related products and one of the world's most significant direct vendors of makeup products and other beauty products. 98% of its earnings comes from the sales of lipsticks, perfumes and powders by the famous "Avon ladies" right to women. The business markets to women in more than 100 countries through more than 5 million unbiased sales representatives. Product categories include: Beauty, which contains beauty products, fragrances, skincare and toiletries; Beauty Plus, which includes fashion jewellery, watches, etc and Beyond Beauty, which includes home products, present and decorative products, candles and playthings. (Avon, 2008 and Keynote, 2007). In fact 98% of the company sales is generated via direct sales. This sales approach had been successful in the Latin America and Asia market. However, the same cannot been said for the American market.

The meanings and ideas of proper change

According to Lynch (2000, p921), "Strategic change is the pro-active management of change in organisations to achieve clearly identified proper objectives. It might be carried out using either prescriptive or emergent proper approaches".

Avon's tactical change

Avon's vision statement is to

"To be the company that best understands and satisfies the merchandise service and self-fulfillment needs of women - globally"

According to Johnson and Scholes (2002) define that it's vital to comprehend the magnitude of the challenge faced in aiming to effect proper change. However In requests to diagnose the strategic change within Avon, it is important to consider the sort of change that is required and also identify the sort of change that has been implemented within Avon.

Being a global manufacturer and marketing consultancy of beauty and related products, Avon has experienced several changes since it was founded in 1886. For over 120 years, Avon has been devoted to empowering women by helping those to look good and feel beautiful. The major proper change is to

- Commit on brand competitiveness by making an investment a huge number in research and development on product technology and increase advertising;

- Re-design the organizational framework to eliminate layers of management to be able to have full benefit of the global size and size; and

- Build a much better tomorrow for women across the world both through representative revenue and helping millions of women to be enterprisers and run their own business. (Avon, 2008) (Multi route Marketing, 2007)

Organisational structure

The efficiency of change efforts is determined how a business is structured. Regarding to Carnall (1999), a great organization structure will provide the right balance of information, electric power and resources to support the various activities within the organization in achieving its goals.

Avon's business is conducted worldwide primarily in one route, direct selling. They derive from geographical businesses in six areas. Avon has sales businesses in 63 countries, including America and Avon products are distributed in 51 more countries through distributorships. Sales of products are created through a mixture of direct advertising and marketing by 5. 3 million Avon staff worldwide. Staff generally purchase products at a discount from a released brochure price directly from Avon and sell them to their customers. In many countries, representatives can use the internet to control their own online business, including order distribution, order tracking, repayment, and a two way communication with Avon. In the US, reps can build their own Avon business through personalised webpages. The research and development service is situated in New York.

ORGANISATIONAL CULTURE

According to Cameron and Green (2004) that organizations should only involve themselves in culture change if the current culture does not properly support the achievements of strategic objectives.

However, Avon is one of the most recognisable organisational ethnicities in the beauty products industry of contemporary times. It was the business that pioneered the door-to-door advertising model in the cosmetic makeup products industry and has been using the same sales model since its humble from 1886. Earnings from its beauty and workers enlargement products reach practically USD6 billion annually and from it 98% is generated via direct offering. Actually, Avon has been so successful that almost all of the other beauty products companies adopted the same direct selling model.

Appendix 3 illustrates Avon's organizational culture by using the social web model from Johnson and Scholes (2002, p232, fig 5. 8).

Stakeholder analysis

According to Joyce (1999), a stakeholder research requires you to recognize the stakeholders, the way they influence the organization, what the business needs from each stakeholder and the stakeholder's needs and anticipations. Through the concept of organisational stakeholders

Stakeholder research for Avon

Stakeholder

Power

Interest

Attitude

Needs/expectations

Government

Worldwide

H

H

Mixed

Avon to meet or exceed all environmental laws and regulations of the countries and communities they operate

Executive team

H

H

Positive

To give full reputation to employees and reps worldwide, on whose efforts Avon depends and share with others the rewards of expansion and success

All other employees

L

H

Positive

To achieve monetary freedom and an opportunity to earn to get their well-being and happiness

Customers

L

L

Positive

Active fascination with cosmetic makeup products and fragrances and willing to look after their appearance

Suppliers

L

L

Neutral

Secure agreements and fast payment of bills. Suppliers subsequently to include value to the procurement of the materials to create Avon products

Communities

L

L

Mixed

Show value to the environment through the successful use of natural resources, misuse minimization, reuse and recycling practices

Media

M

M

Negative

Always looking out for negative promotion on harmful materials in everyday beauty products and linking it to various health problems

Shareholders

H

H

Positive

Dividends, share price growth

The key environmental influences

The PEST framework categories environmental influences into four main types: political, economic, social, scientific.

Political factors

In all the countries where Avon performs, it offers women a way to achieve financial freedom and career self-determination. Although in a few countries, it is considered as an economic progress and wealth of its people, Also countries worldwide have different legislation on taxation and job legislations. Some countries have different views on the issue of level of privacy such as Data cover Act within europe is designed to protect the personal privacy of its citizens. Because of this this will have an impact on Avon representatives phoning door to door. .

Economic factors

Consumer spending on Avon products is normally affected by lots of factors, including economical conditions, inflation and interest rates. Avon is also subject to currency fluctuations and currency rates. Avon has recruited almost 5. 3 million associates all over the world. This implies they have a disposable income and money to invest on beauty products and beauty related products.

Social factors

In the cosmetics industry, consumer choices, consumer spending capabilities and preferences cannot be predicted can transform swiftly. Different countries have different cultures, and these ethnicities result in various work-related issues. For example hot and chilly regions will demand differently produced products to suit the local climate change. Avon is also influenced by distinctions in culture and just how of life in other countries. Women around the globe have similar aspirations when it comes to cosmetics and share the same desire to look their finest. However the very best obstacle in creating beauty products for different ethnic groups is discovering the right balance between embracing their similarities while respecting and celebrating their differences

Technological factors

The aspect of technology can effect the behavior of folks in work organization. In conditions of research and product development activities, services are crucial to development in the highly competitive cosmetic industry. Avon is committing on brand competitiveness by spending thousands in research and development on product innovation and increase advertising.

3. 2 Managing strategy change

It is mentioned by Mullins (2002) that an organization can only perform effectively through interactions with the broader external environment. To be able to decide how Avon's strategic change can be implemented The SWOT research will increase the forces pushing the change and reduce the strengths the makes opposing the change.

SWOT analysis

Strength - Avon is well known worldwide as a primary selling organization because of its makeup and beauty related products. The business's geographical coverage is divided into six regions and its own presence is in more than 100 countries.

Weaknesses - The aesthetic industry is very lucrative, innovative and fast paced industry and product life cycles have a tendency to be short for Avon make-up. The basic safety of cosmetic products is constantly under scrutiny and Avon must adhere to higher and higher benchmarks.

Opportunities - Presently Avon Have a existence in over 100 countries an internet internet site to give a direct sales channel for Avon's full products. The use of online interactions as a fresh marketing channel and it'll help to reduce other conventional marketing channels. The markets of Eastern Europe, Asia and Latin America offer great potential to increase sales. To be able to increase their image, brand reputation and sales, Avon should think about broadening advertising from brochure to Television, radio, favorable periodicals and newspapers across the world.

Threats -

Fierce competition from other immediate selling organizations and products sold through the mass market and retail channels also Counterfeit products are predicted to go over 6% of global trade.

Conclusion

This report offers an try to understand the major strategic change undergone by Avon Cosmetics Limited. Furthermore, statement evaluated the potency of the change with regards to Avon's framework, culture. Being truly a global maker and marketing expert of beauty and related products and a primary selling organisation, Avon was confronted with several obstacles in the external environment. The factors were: fierce tournaments from multinational companies, consumer behavior worldwide, government regulations, technological and communal background. It was found that the major strategic change does relate with the objectives of the business and fits the organisation's capability, including its framework, culture and politics.

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