Avon Strategy Analysis
Strategy Analysis Avon Products
Introduction
All businesses must create strategies that will see them into the next phase of their growth. It is through assessment, generic and grand strategy development, and implementation that a corporation can move beyond just existing in the market, to becoming a powerhouse in their arena, as well as increase shareholder wealth. Andrea Jung, in 2000, faced having to create growth strategies for the 115-year-old company of Avon Products, Inc. This company had shown recent single digit growth in many areas, and this paper will offer analysis as to why we believe Andrea Jung developed a grand strategy for this organization that is properly focused or directed.
Strategy Analysis
Grand Strategy is properly focused and directed
Several things happened once Andrea Jung was named CEO of Avon. First, she decided to reverse the current trend of losing sales. She did this by creating a strategy that would turn the company around. This strategy included the following plans: Reinvigorating the brand (new products, new packaging, and a new ad campaign) Instituting beauty-advisory training Expanding the multilevel sales program Suggested a strategy to partner with Sears and JC Penney department stores
Jung 's suggested strategy to partner with Sears and JC Penney department stores was an idea that would help to promote the strategy she had come up with. It would introduce a new, upscale product line, thus increasing profits, sales and nationwide exposure to the baby boomer segment. Retail selling increased with in-store customer traffic and expected growth of spending power to 16 percent within five years. Face-to-face selling comprised 79.7 percent of direct selling, preferred among senior citizens. The marketing budget would be increased to target customer traffic at Sears and JC Penney. Investment costs were limited to $15 20 million to launch retail products, with a bulk of expenses being absorbed by the department
Introduction
All businesses must create strategies that will see them into the next phase of their growth. It is through assessment, generic and grand strategy development, and implementation that a corporation can move beyond just existing in the market, to becoming a powerhouse in their arena, as well as increase shareholder wealth. Andrea Jung, in 2000, faced having to create growth strategies for the 115-year-old company of Avon Products, Inc. This company had shown recent single digit growth in many areas, and this paper will offer analysis as to why we believe Andrea Jung developed a grand strategy for this organization that is properly focused or directed.
Strategy Analysis
Grand Strategy is properly focused and directed
Several things happened once Andrea Jung was named CEO of Avon. First, she decided to reverse the current trend of losing sales. She did this by creating a strategy that would turn the company around. This strategy included the following plans: Reinvigorating the brand (new products, new packaging, and a new ad campaign) Instituting beauty-advisory training Expanding the multilevel sales program Suggested a strategy to partner with Sears and JC Penney department stores
Jung 's suggested strategy to partner with Sears and JC Penney department stores was an idea that would help to promote the strategy she had come up with. It would introduce a new, upscale product line, thus increasing profits, sales and nationwide exposure to the baby boomer segment. Retail selling increased with in-store customer traffic and expected growth of spending power to 16 percent within five years. Face-to-face selling comprised 79.7 percent of direct selling, preferred among senior citizens. The marketing budget would be increased to target customer traffic at Sears and JC Penney. Investment costs were limited to $15 20 million to launch retail products, with a bulk of expenses being absorbed by the department
References: University of Phoenix (Ed.). (2004). Strategic Management: Formulation, Implementation, and Control [University of Phoenix Custom Edition e-text]. New York: McGraw-Hill. Retrieved September 29, 2005, University of Phoenix, Resource, MGT 578- Strategy Formulation and Implementation Web site: https://ecampus.phoenix.edu/secure/resource/resource.asp Byrnes, N. (2003). Avon is calling lots of new reps. Business Week. Retrieved October 18, 2005, from http://www.businessweek.com/careers/content/jun2003/ca2003064_2654_ca026.htm