Avon Products Inc: Poor performance necessitates change

 Published On: Apr, 2014 |    No of Pages: 22 |  Published By: MarketLine | Format: PDF
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Introduction

Avon Products is a global manufacturer and marketer of beauty and related products. According to MarketLine, the global personal products industry had total revenues of $344.7bn in 2012. However, Avon's revenues have been declining. This case study assesses the reasons for decline and strategies the company can adopt in order to increase its revenues.

Features and benefits

* Analyzes Avon's business model and looks at why revenues have been declining.
* Assesses why Avon's competitors such as L'Oreal and Estee Lauder and growing and the strategies used by these competitors.
* Provides an assessment of how Avon can increase its revenues and how the company can establish its position in declining markets such as China.
* Analyzes growth opportunities for Avon such as establishing themselves online.
* Assesses how Avon can use increasing demand for products such as anti-ageing and male grooming products to widen its consumer base.

Highlights

Avon has a direct selling business model which sets it aside from its competitors such as L'Oreal and Estee Lauder. However, in recent times Avon's competitors have experienced growth, whilst Avon has suffered a loss.
The company has established its position in emerging markets such as Brazil. Furthermore, there is huge potential in China as it is one of the fastest-growing beauty markets in the world; this report assesses how Avon can generate revenues in China following years of decline in this market.
The surge in consumer interest in natural personal care products around the globe has driven outstanding growth within this industry. This report looks at how Avon can use this to its advantage.

Your key questions answered

* Why has demand for Avon products been declining in recent years?
* Avon experienced growth in Brazil, however why has this success not been replicated in China?
* How can the online distribution channel help the company increase its revenues?
* How can Avon use the increasing demand and interest in nutraceuticals and cosmeceuticals to its advantage?
* What factors are fuelling growth in the male grooming industry and how can Avon establish its position within this industry?

OVERVIEW
Catalyst
Summary
AVON'S RECENT DECLINE IN SALES
Avon: a brief history
Avon's global revenues and profits
Performance of the personal care industry
Avon's reaction to declining revenues
AVON'S BUSINESS MODEL AND ASSOCIATED THREATS
Avon's distribution strategy
Competitors in the market
Online retail
The risk of counterfeit products
GROWTH OPPORTUNITIES FOR AVON
Expansion in emerging markets
Avon in Brazil
Avon in China
Demand for targeted products in the beauty industry
Growing male grooming industry
CONCLUSIONS
Avon may have to review its sales distribution strategy in order to prevent the company from going into further decline
APPENDIX
Definitions
Sources
Further Reading
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