UNIVERSITY OF THE EAST

CALOOCAN
College of Business Administration

Ann Gabrielle R. Angeles

Ma. Angelica C. Conwi
Marjorie C. Constantino
Ann Margarette I. Sambilay

BSAcT 3H MWF 11:30-12:30 TYK 302

Dr. Rosalinda B. Lacerona
 I. TITLE OF THE CASE: AVON
II. TIME CONTEXT: 2010 – 2011 (The years 2010-2011 is according to the problem but until
now, the company experiences the same problem.)

III. SUMMARY/ABSTRACT

In 1886, 34 years before women in the U.S. earned the right to vote, our founder,
David H. McConnell, helped give them the chance to earn an independent income.
He didn’t set out to create a beauty company. In fact, McConnell was a traveling
book salesperson and offered beauty products as an additional perk to his female
customers. He saw that these women were more interested in the free perfume samples
than the books – and that many of them stayed home while their husbands went off to work.
Since women had a passion for his products and loved networking with other women,
McConnell was inspired to recruit them as Sales Representatives. From a small New York
City office, McConnell himself mixed the company's first fragrances.
Since they have a long overdue problem, the group wanted to create an effective
strategy that will help the company in managing its people properly in able to gain a
competitive advantage towards the industry.

A. VISION
Avon’s vision is to be the company that best understands and satisfies the product,
service and self-fulfillment needs of women globally.

B. MISSION
Our mission is to improve the lives of women globally. In our core cause areas of
Breast Cancer and Domestic Violence, we aim to accelerate progress, accountability and
discovery, while also reducing the social stigma that sometimes keeps these issues in the
shadows.
We take a woman-centric approach on all projects to break traditional barriers and
build a better future for women, because we know that the greater the support, the more
empowered women feel to take control of their health and safety.
 We lead efforts to eradicate breast cancer through the Avon Breast Cancer Crusade,
and to end domestic and gender violence through the Avon Speak out against Domestic
Violence program using four key strategies:

Funding the most promising work;

Convening grantees, partners and other thought leaders to collaborate and share
best practices for improved outcomes;
Initiating new directions and innovative projects to accelerate progress; and
Educating the general public and key audiences to drive and change behavior to
achieve its mission goals.

C. CORPORATE SOCIAL RESPONSIBILITY OF THE COMPANY

Quality control
Product quality and safety are of paramount importance to Avon, and the company
seeks to ensure that products meet our very high standards by controlled laboratory tests
at every stage of development and manufacture. Volunteers are invited to try our products
to help evaluate their efficacy and to ensure that they are both easy and pleasant to use.

Environmental responsibility
Around the world, Avon has systems in place to reduce packaging waste and energy
consumption, and to promote and measure re-use or recycling wherever possible. New
packaging materials and production methods are evaluated as they are developed and Avon
challenges itself to ensure that products and business operations fulfill a healthy balance
between meeting consumer demands and being responsible towards the environment.

As the "company for women," with a network of six million Sales Representatives
worldwide, Avon has the unique ability and commitment to educate and mobilize people on
issues that are of vital importance to women. That’s why global philanthropy is at our core as
a company.

By combining the power of the individual and the collective power of our network
into one powerful philanthropic force, together Avon and the Avon Foundation for
Women –a U.S.-based public charity—are a global leader in philanthropy. This unique
 partnership of corporate philanthropy and a public charity is focused on two core areas:
eradicating breast cancer and ending violence against women.

Today, Avon and the Avon Foundation for Women have made $1 billion in
contributions dedicated to these causes. Funds are raised through cause-related product
sales, AVON 39 the Walk to End Breast Cancer donations, and Avon Walk around the World
events. To date, the collective Avon efforts have educated nearly 175 million about breast
cancer and domestic violence, and served nearly 30 million people through grants and
outreach programs.

Despite many areas of progress, breast cancer and domestic violence remain
prominent issues impacting women worldwide, with one in eight diagnosed with breast
cancer in her lifetime, and one in three impacted by gender violence. Too many women
continue to suffer, and too many victims are vividly aware of the pain of abuse. Together,
Avon and the Avon Foundation for Women hope to change this—because even one is too
many

D. AWARDS AND RECOGNITION RECEIVED

Avon Philippines Takes Home the Pillar Award for Business Turnaround and Execution

Last May 14, Avon announced its worldwide 2015 Management Awards during the Avon
Senior Leaders Meeting Recognition Night in Lisbon, Portugal. Avon Philippines was given the
prestigious Pillar Award for Business Turnaround and Execution. This is one of only 9 coveted
Avon Management awards, which nearly 100 Avon markets were vying for.
 CDP S&P 500 Climate Change Report Avon received an 86 on disclosure and B on
performance in 2013
Human Rights Campaign Foundation’s Corporate Equality Index Avon received a
perfect score—100 out of 100—in 2013 for the second consecutive year
Interbrand’s Best Global Green Brands Avon ranked No. 41 in 2013
Forbes’ World’s 100 Most Powerful Women FORTUNE’s 50 Most Powerful Women
in Business Avon CEO Sheri McCoy was recognized on both lists in 2013

IV. STATEMENTS OF THE OBJECTIVE

To have an effective strategy to remove the non-value added segments in the

company.
To be able to flatten the structure of the organization.
To gain a competitive advantage in the industry.
To serve the customers all over the world with total satisfaction.
To develop the traditional selling strategy of the company.
To help the company to recover the losses they have incurred from the previous
years.
To became the Graying Goliath once again in this line of business.

V. CENTRAL PROBLEM

How can the company gain a huge competitive advantage in the industry and how
can they systemize their hierarchical organization?

VI. AREAS OF CONSIDERATION (SWOT ANALYSIS)

a. They’ve been in this business for 132
years already.
b. They value the qualities of every woman in
the world. They were able to create a
company with girl employees.
c. Through direct selling, they were able to
interact more on their customers and the
latter can ask directly to the sales
representative about the product.
d. The products are being endorsed by
celebrities of different ages. In this way,
their customers know what product
perfectly suits them.
e. The company owns a variety of retail
channels.
f. Sales representatives accept payment in
credits.
a. They didn’t adapt easily in the fast paced
world of technology. While their
competitors are bargaining their products
online, they remain on the printed
brochures.
b. The company employs too much sales
representatives that it makes
communication and accountability hard for
everyone.
c. They lack consistency in their strategies.
d. They have outdated brand images.
e. Even though their CEO’s come from known
companies, it seems like they can’t really
solve their problems. In the present time,
Ms. Sheri McCoy will leave her position in
March.
 a. Their customers are helping them by
marketing the product they bought to
other people.
b. Market expansion. Originally, Avon started
selling vanity kits for women only but
these past years, they were able to create
products for men and for children.
c. Technology advancement. As year passes
by, they were able to improve their
website by adding e-brochure.
d. They cope up easily with the trends
regarding the skin care products and new
variants of make ups.
e. The employees can be trained on how to
market their product effectively to the
employees.
a. They were involved in corruption. Some of
the executives in China were found to be
bribing the local government officials.
b. Increasing competitive pressures from
other distribution channels in the market.
c. Financial crisis. Even though the prices of
their products are low, the people still
chooses those with lower prices in
different brands.
d. Other international companies. Some
women really just buy make up from other
international company simply because it is
the current brand trend among women.
e. Climate change. Since they are selling
directly to people, the changing weather
affects their sales.

VII. ALTERNATIVE COURSES OF ACTION

a. A renovated place attracts a. It will become very costly

1. Renovate and establish
stalls in malls then add
other services.
2. Instead of recruiting new
sales representatives, they
need to invest their
employees in trainings and
seminars to develop their
skills in marketing
products to the people.
customer because they
become curious.
b. It will also improve the
performance of the
employees.
c. The customer gets to
experience new services
like how to properly use
the product they bought.
a. Innovation of products.
Since the trained
employees are oriented on
what are the current
trends, they will be able to
construct ideas that will
help the company.
b. There will be less labor
cost since there will be no
sales representatives and
the trainings and seminars
focus only on the real
employees.
c. Total employee and
customer satisfaction.
d. Good company image
for the company when
they renovate.
b. It will take a lot of time to
renovate the stalls.
c. There is no assurance that
the customers will avail
these new services.
d. They will need more
professionals to deliver a
service to the customers.
a. Limited time constraints.
Avon is one of the busiest
companies in the industry.
They need a lot of time to
serve their customers
properly. And if their main
employees will be sent to
trainings, the work will be
set aside.
b. Its either it will be costly
to send people to
seminars or pay an
executive to train your
people.
c. The flow and control of
the training.

3. Develop an online selling
website or application to
reach wider market with
less people and remove the
non-value added segments
of the company.
because the public can see
that they want the best of
their employees.
a. It lessen the people they a. Developing a website can
have because there will be be really costly.
a website in which they b. Not all people know the
can order directly. process on how to order
b. There will be clarity in the over the internet.
role of the employees. c. It’s vulnerable to theft.
c. When the non-profitable d. The customers cannot
or idle products are now buy in credits.
removed, the customers e. The customers cannot test
will have less choices and the products before they
the company will have buy it.
lesser costs.
d. They can reach a wider
market across the country.
e. The customers will have an
alternative in case their
product is not available in
the malls and stores.

VIII. STRATEGY FORMULATION OR RECOMMENDATION

We therefore conclude that the best solution to the problem is alternative course of
action number 3 which is to develop an online selling website or application to reach wider
market with less people and remove the non-value added segments of the company. We
think that it is much easier for the company to centralized its operation because there will
be few people whom will manage the orders of the customers. The information is flowing in
real time. In addition to this, the international managers can easily check the local situations
because they will know who handles the operations. According to news article, many
individuals are staying on the web to check the products they wanted to buy and it is said
that these people who checks products online actually places their order after. Also, in
direct selling, there are customers that didn’t pay their orders properly after they have
received the product. In online order, the company can establish policies like cash on
delivery or payment before the delivery of goods. In this way, the company can assure that
they are earning and the doubtful accounts can be lessened.
On the other hand, the company has created products that are not their specialty
like lunch boxes and kitchen utensils and these needs to be removed. They need to remove
it because there are already companies specializing on those products. Their customers are
focused on their main products which are the vanity products so they need to improve
these things so that their customers will benefit.
IX. PLAN OF ACTION
1. The company officials needed to conduct a meeting about downsizing their employees
and developing their website. Partner with a courier and bank for the collection of the
payments of the order.
2. Upon execution, improve their website by getting a help with a systems designer.
3. Announce to the public that they are restructuring their operations and guide them
through the process.
4. Conduct some surveys for the customer preferences then launch their improved site.
5. Continue update the features of their online selling website to better serve the people
6. Make sure that the employees are doing their task properly.

X. POTENTIAL PROBLEM
1. What if the employees don’t want to leave the company?
2. What if the employees raise their concerns then rally?
3. What if the customers still find it difficult to use?
4. What if the company cannot accompany all the needs of the customers?
5. What if the employees become lazy because mainly they are sitting in front of the
computer waiting for orders?

XI. CONTINGENCY PLAN

1. Make them understand and promise them that they still receive the benefits that they
have earned being an employee.
2. Handle them properly and without harm. After all, this is a company for women.
3. Make sure to tell the systems designer to make it easily accessible to the customers.
4. Decide carefully what feature must be added first.
5. Monitor the employees every now and then.

Resources:

https://www.avon.ph/ph-home