Amway is a direct selling company and manufacturer that uses multi-level marketing to sell a variety

of products, primarily in the health, beauty, and home care markets. [3][4][5] Amway was founded in
1959 by Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company and family of
companies under Alticor reported sales growth of 2.3%, reaching US$8.4 billion for the year ending
December 31, 2009.[1] Its product lines include home care products, personal care products, jewelry,
electronics, Nutrilite dietary supplements, water purifiers, air purifiers, insurance and cosmetics. In
2004, Health & Beauty products accounted for nearly 60% of worldwide sales. [6] Amway conducts
business through a number of affiliated companies in more than ninety countries and territories
around the world.[7] It is ranked by Forbes as one of the largest private companies in the United
States[8] and by Deloitte as one of the largest retailers in the world

Amway is reworking its direct sale strategy in India to get closer to consumers.

The wellness, beauty and homecare products firm, which expects a quantum jump in sales in India, is planning to
turn its 54 distribution centres into showrooms to give consumers a first-hand experience.

So far, direct selling agents went to the consumers’ homes and sold the Amway products.

As a company that pioneered direct sales, Amway did not have a brick-and-mortar presence.

The company, which had built awareness about its products by word of mouth, also plans to increase its ad spend.

Amway garnered a revenue of $250 million in India, which is among its top 10 markets. The company earned
$8.2 billion globally last year.

Steve Van Andel, chairman of Amway, said India had potential to be among its top 5 markets.

“India is a major market for us. The shift in strategy that you see in terms of a brick-and-mortar presence
(experience centres) and advertisement, are major steps to reach closer to the consumer,” Andel told a group of
visiting journalists from India at Amway’s headquarters in Ada, Michigan.

Andel, whose family along with the DeVos, had set up Amway 50 years back, however, strongly backed the direct
sales model despite the opportunity to grow manifold through the conventional retail route.

“We will never change this model which helped so many people to earn a living,” he said.

Amway has around 500,000 registered individuals selling its products in India.

Sales from the experience centres will also be booked in the names of distributors who will get commissions.

In this way, the existing direct sales structure will not be affected. Amway business associates will also earn from
the sales in the experience centres in addition to the income from direct selling.

The company also plans to tap salons with its beauty products.

Bill Pinckney, managing director and CEO of Amway India, said such steps could increase sales 10 times over the
next 10 years.

“Yes, it’s possible. We have seen this in some of the countries. With the population India has, I am quite hopeful
that we can achieve that after building the brand for the last 11 years,” Pinckney said.

Food supplement Nutralite is the blockbuster product of Amway in India, and the company is now betting big on
the “Artistry” range of beauty products to drive sales.

The company also makes consumer durables for the developed markets and could introduce these in India in the
future.
To support increased sales, the capacity of the plant that manufactures Amway products in India at Baddi,
Himachal Pradesh, is being doubled.

Amway does not own the plant. It has a contract manufacturing arrangement with a local partner.

However, Pinckney did not rule out the possibility of setting up a plant.

“The new plant could be located in the south,” Pinckney said.

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Home Care
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Laundry Care
Product Mix Bottles
Apparel Care
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Home Tech
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Nutrition and Wellness

MAGNA BLOC™
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For the small and medium scale sectors, the strategy will be different. ``We would sell their
products. The quality will be good but they may not be up to the standards of Amway,'' he
said.

Banerjee said that though an in-principle decision has been taken nothing has been finalised.
However, he added: ``It will be any product from computer peripherals to video cassettes and
everything but it will take some time to actually start this project.''

He also said that Amway India is planning to exploit the herbal resources present in India for
export purposes. ``Research activities are on in our American laboratory for manufacturing of
neutrilite herbal and neutrilite ayurvedic products. Our main contenders in this area are China
and Korea. They also have a rich line-up of herbal products,'' Banerjee said.

Introduction
Corporate Social Responsibility (CSR) means businesses and organisations working
responsibly and contributing positively to the communities they operate in. It involves
working with employees, their families, the local community and society at large to improve
their quality of life. Companies that operate in a socially responsible way strengthen their
reputations. In business, reputation is everything. It determines the extent to which customers
want to buy from you, partners are willing to work with you and your standing in the
community.

The company
Amway is one of the world’s largest direct sales organisations with over 3 million
Independent Business Owners (IBOs) in over 80 markets and territories worldwide. It is a
family-owned business with a strong emphasis on family values. Its IBOs are often couples.
Many of these are raising families. They therefore have a strong bond with children. These
families are more than happy to partner with Amway, who, as part of its Corporate Social
Responsibility strategy, works with UNICEF, the United Nations Children’s Fund.
As a family company, Amway is committed to playing a part in improving the lives of
children in need across the globe. In this way, the company is able to show its commitment to
the support of global causes.
Amway defines a global cause as ‘a social issue affecting many people around the world
engaged in a struggle or plight that warrants a charitable response’.
This case study shows how Amway is a business that does more than provide customers with
good quality products. It shows the practical realities of Amway’s global commitment and
how it plays a key role in the communities in which it operates.

Growth and responsibility

An understanding of how Amway operates as an organisation gives a clearer picture of the
contribution it can make to help children in need across the globe. Amway’s vision is to help
people live better lives. It does this every day by providing a low-cost low-risk business
opportunity based on selling quality products.

What does Amway do?

Amway distributes a range of branded products. These products are sold to IBOs worldwide.
The IBOs are Amway’s links with consumers and the communities in which they operate.
The IBOs are self-employed and are highly motivated. They work within the guidelines of
Amway’s Rules of Conduct and Code of Ethics, which are about being honest and
responsible in trading. IBOs sell to people that they know or meet. They can introduce others
to the Amway business.
Typical products that IBOs sell include:

 personal care – fragrances, body care

 skin care and cosmetics

 durables such as cookware and water treatment systems

 nutrition and wellness products such as food supplements, food and drinks.

IBOs play a key part in helping Amway to deliver its Global Cause Programme.

Amway programmes
In order to give many of the world’s children a chance to live a better life, Amway launched
the global One by One campaign for children in 2003. The One by One programme:

 helps Amway to bring its vision to life

 declares what the company stands for

 builds trust and respect in Amway brands

 establishes Corporate Social Responsibility at a high level.

Amway encourages staff and IBOs to support its One by One campaign for children.
Since 2001, Amway Europe has been an official partner of UNICEF and has been able to
contribute over €2 million (about £1.4 million). The focus is on supporting the worldwide
‘Immunisation Plus’ programme.
This involves, for example, providing measles vaccines to children across the globe. The
‘Plus’ is about using the vehicle of immunisation to deliver other life-saving services for
children. It is about making health systems stronger and promoting activities that help
communities and families to improve child-care practices. For example the ‘Plus’ could
include providing vitamin A supplements in countries where there is vitamin A deficiency.
Since 2001, Amway and its IBOs across Europe have been supporting UNICEF’s child
survival programme. The need is great. One out of ten children in Kenya does not live to see
its fifth birthday, largely through preventable diseases. Malaria is the biggest killer with 93
deaths per day. Only 58% of children under two are fully immunised.
The work of the One by One programme is illustrated by a field trip undertaken by Amway
IBOs to Kenya. The IBOs travelled to Kilifi in 2006 to meet children and to find out what the
problems are in various communities. They act as champions spreading the message
throughout their groups. In Kilifi, the focus is on trying to reach the most vulnerable children
and pregnant mothers. The aim is to increase immunisation from 40% to 70%. Other
elements of the programme involve seeking to prevent the transmission of HIV/AIDS to
infants.
As the Amway organisation grows and prospers, it is able through CSR actions to help
communities to grow and prosper too.

Developing a strategy
A strategy is an organisational plan. Implementing a strategy involves putting that plan into
action. In other words a strategy shows how a business will achieve its goals. The strategy
thus enables an organisation to turn its values into action. Values are what a company stands
for. An important value for Amway is being a caring company. Amway believes in
demonstrating this caring approach and this is why it has partnered with UNICEF.
All Directors design strategies for the whole of an organisation. Effective strategies involve
discussion and communication with others. The views of IBOs are influential in creating
strategies for Amway. Amway’s strategies for corporate social responsibility are cascaded
through the organisation as shown below.
Amway’s Global Cause strategy involves creating responsible plans that make a difference.
However, the strategy is flexible. In shaping the strategy, research was carried out to find out
which global causes IBOs support. The results showed that many favoured a cause that
helped children. There was a clear fit between Amway’s aims to help children and UNICEF’s
‘Immunisation Plus’ programme for children.

Objectives
From the outset, Amway set out some clear objectives for its strategy. These were to:

 build loyalty and pride among IBOs and employees

 enhance Amway’s reputation as a caring organisation

 make a real difference to human lives.

Child mortality is particularly high in developing countries because of infectious diseases.

Many children could still be alive if they had been vaccinated.
For under £12 a child can be vaccinated against these diseases and has a fighting chance to
reach adulthood. UNICEF’s world child ‘Immunisation Plus’ programme is a fitting focus for
the activities of Amway UK and its IBOs.
The UK initiative is part of a European-wide fundraising campaign for children. It recognises
the importance of building good working relationships with UNICEF in each market in order
to launch fundraising programmes through Amway’s IBOs and their customers. The
objective is to raise €500,000 (about £350,000) every year until 2010 across Amway Europe.
In 2005 Amway UK’s partnership was deepened through becoming an official Corporate
Partner of UNICEF UK. The Corporate Partnership is a closer longer-term relationship which
benefits both partners. Working together the two parties raise money for UNICEF.

Identifying stakeholders
Amway’s Corporate Social Responsibility strategy has been developed with the interests of
the following stakeholders in mind:

Communicating the strategy

Good, clear communication is essential in making sure that the CSR strategy relates directly
to the company business objectives. Communication also helps in putting the strategy into
practice.
A number of communications media are used:
1. Face-to-face communication: Regular meetings take place between UNICEF, Amway and
its IBOs. Through meetings with UNICEF staff, Amway is able to discuss the vision and
objectives. It then passes the message on by meeting with IBOs. In 2005 the two
organisations arranged a joint briefing day for IBO Leaders. They were able to hear firsthand
experiences from UNICEF staff about their roles and UNICEF’s work as well as where the
money goes.
2. Printed material: Amway produces a monthly magazine for all IBOs called Amagram.
3. Public relations materials are also important, particularly at launch events for the initiative
(e.g. in Milton Keynes in 2006).
4. Email communication: Email is very important in the company – it plays a significant part
in keeping IBOs up-to-date.
5. Online activities: There is a micro-site dedicated to the Amway UK/UNICEF partnership
on the UNICEF UK website.

Fundraising
Amway Europe provides support for fundraising to the extent of €500,000 (about £350,000)
per year through selling items such as:

 greetings cards

 multi-cultural gifts and cards

 stationery and wrapping paper

 toys for children.

However, Amway UK’s support goes well beyond these activities. In addition, it involves
staff fundraising events and raffles organised by the IBOs. UNICEF attends IBO major
events (usually supported by 1,000 or more IBOs) where requested. A UNICEF stand
outlines the work with speakers, literature and merchandise.

Conclusion
Amway is a family business with family values. Its IBOs are people who want to make a
difference to the communities in which they operate and to the wider world community. This
is Corporate Social Responsibility (CSR) in action.
The clue to Amway’s success is the careful planning of its strategy and its involvement with
many stakeholders in getting the strategy right. Of course, it is early days in the latest chapter
of a strong relationship between Amway and UNICEF. Evaluation is taking place to measure
the success of the initiative in terms of meeting fundraising goals. Customer research is
carried out to test customers‘ views on the relationship and to find out how aware the general
public is about what Amway is doing in the field of CSR

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Featured Story
Amway Global and ARTISTRY® partner with the Miss America
Organization for the next two years
Amway Global is proud to announce that ARTISTRY® Skin Care and Cosmetics, beauty power
brand of Amway Global, is the Official Skin Care and Cosmetics Provider of the Miss America
Pageant. Artistry will hold the title for both the 2010 and 2011 Miss America Pageants. The
sponsorship will also give the Miss America Organization the opportunity to work with the entire
Amway Global family of brands.
Read More