UiTM CAWANGAN NEGERI SEMBILAN KAMPUS REMBAU

FACULTY OF BUSINESS MANAGEMENT

FUNDAMENTAL OF ENTREPRENEURSHIP (ENT300)

ASSIGNMENT 1: CASE STUDY

BUSINESS NAME: AVON PRODUCTS INC.

ENTREPRENEUR NAME: DAVID HALL MCCONNELL

PREPARED BY:

ILYAS YUSUF BIN IZAHAR (2018202552)

BA1195D

PREPARED FOR:

MADAM FARRAH NADIA BINTI BAHARUDDIN

SUBMISSION DATE:

13th NOVEMBER 2020

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 ACKNOWLEDGEMENT

First and foremost, praises and thanks to the God, the Almighty, for His
showers of blessings throughout my research work to complete the research
successfully.

I would like to express my deep and sincere gratitude to Madam Farrah Nadia
Binti Baharuddin, my lecturer for ENT300, for giving me the opportunity to do
research and providing invaluable guidance throughout this research. Her dynamism,
vision, sincerity and motivation have deeply inspired me. She has taught me the
methodology to carry out the research and to present the research works as clearly as
possible. It was a great privilege and honor to work and study under her guidance. I
am extremely grateful for what she has offered me. I would also like to thank her for
her friendship and empathy.

I am extremely grateful to my parents for their love, prayers, caring and

sacrifices for educating, preparing me for my future and for their love, understanding,
prayers and continuing support to complete this research work.

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 TABLE OF CONTENT

NO. CONTENT PAGE

1. 1.0 Executive Summary 4
2. 2.0 Introduction
- Introduction to Entrepreneur 5
- Introduction to Business 6
3. 3.0 Personal Entrepreneurial Competencies (PECs)
- Initiative 7
- Sees and Acts on Opportunities 7
4. 4.0 SWOT Analysis 8-10
5. 5.0 Conclusion 11
6. 6.0 References 12

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1.0 EXECUTIVE SUMMARY

Company Name

Avon Products, Inc. is a multi-level marketing company in beauty, household, and personal
care categories. It is the fourteenth-largest beauty company and, with 6.4 million
representatives, is the second largest direct-selling enterprise in the world. The company's CEO
is Angela Cretu, who was appointed to the position in January 2020.

Founder

David Hall McConnell Sr. was an American businessman who was the founder and president
of the "California Perfume Company", which then became Avon Products. McConnell was
president, chairman of the board and principal owner of Avon Allied Products, Inc., and its
affiliated companies until his death.

Products Offered

Avon sells beauty, fashion, and home goods. The company's core beauty business consists of
colour cosmetics, fragrances, skin care, and personal care. Fashion consists of fashion
jewellery, watches, apparel, footwear, accessories, and children's products.

Location

Avon Products has offices located at New York, Zanesville, London and Northampton but
the headquarters are located at London, United Kingdom.

Industry

Retail and Personal

Duration in Industry

Avon Product had been in the industry since 1885. This makes Avon 135 years in the industry.

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2.0 INTRODUCTION

Introduction to Entrepreneur

This case study is held in order to expose entrepreneurs and what makes them an
entrepreneur. Entrepreneurial activities are an activity that include the creation of new firms
and the creation and distribution of value assuming the calculated risks, have been associated
with economic growth and innovation. This report will also enlighten student on
entrepreneurship.

“An entrepreneur is an innovator where the economy moves through leaps and bounds
and the prime mover is the entrepreneur through the process of creative destruction.”

(Joseph Aloysius Schumpeter, 1934).

For my case study, I did a bunch of research on an entrepreneur that I look up to that is
the founder of Avon Products, David Hall McConnell Sr. He lived his life to the fullest from
July 18th, 1858 and he passed away on January 20th, 1937 at the age of 78. He is an American
who is the true definition of american dream.

David H. Mc Connell was always a man that will be known as businessman, salesman
and most importantly an entrepreneur. On early period of his working life, he joined the Union
Publishing Co. of Chicago and three years later was placed in charge of southern territory,
making his home in Atlanta. He decided that, if books could be sold house-to-house, perfumes
could also. Out of this conception, grew his California Perfume Company (CPC).

On January 28, 1916, the California Perfume Company was incorporated in the state of
New York. The name changes subsequently, it became Allied Products, Inc., and later Avon
Allied Products, Inc. McConnell was president, chairman of the board and principal owner of
Avon Allied Products, Inc., and its affiliated companies until his death.

He was one of the founders of the Suffern National Bank of which he became vice
president in 1901, president in 1922 and chairman of the board in 1927. He was again elected
chairman of the board and president in 1933 and continued in one or the other office until his
death. Based on his work life, he had always been a figure that is always strive for success and
always be seen as an entrepreneur.

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 History of Business

Avon's founder, David H. McConnell, initially sold books as a door-to-door salesman

to New York homes. In September 1886, he decided to sell perfumes rather than books. He
started the new business in a small office at 126 Chambers Street, Manhattan, New York.
McConnell changed the company name in 1892. His business partner suggested to call it the
"California Perfume Company." His business partner was living in California at the time and
suggested the name because of the abundance of flowers in California.

In May 1894, Alexander D. Henderson joined the company, became vice-president and
treasurer, and helped shape its policies and assist in its growth. In 1897 they built a laboratory
in Suffern, New York. On May 3, 1909, the California Perfume Company corporate office
moved to 31 Park Place, New York. On June 16, 1909, McConnell and Henderson signed an
agreement of Incorporation for the California Perfume Company in the state of New Jersey.

On January 28, 1916, the California Perfume Company was incorporated in the state of
New York. McConnell, Henderson, and William Scheele were listed as company officials. On
October 6, 1939, the California Perfume Company changed its name to Avon Products Inc.
The "California Perfume Company, Inc." of New York filed its first trademark application for
Avon on June 3, 1932.

Avon sells products in over 100 countries and Brazil is the company's largest market,
passing the United States in 2010. Avon entered the Chinese market in 1990. Avon purchased
Silpada, a direct seller of silver jewellery, in 2010 for $650 million.

Avon uses both door-to-door salespeople that was called “Avon ladies" or "Avon men"
and brochures to advertise its products. Some Avon training centres have a small retail section
with skincare products, such as creams, serums, makeup, and washes. Avon uses multi-level
marketing to recruit sales representatives who sell beauty products, jewellery, accessories, and
clothing. According to the U.S. government, Avon has 5 million to 6 million sales
representatives operating in over 100 countries as of 2014. Avon and its subsidiaries have
40,000 to 50,000 employees, 6,000 of which are in the United States.

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3.0 PERSONAL ENTREPRENEURIAL COMPETENCIES

Personal entrepreneurial competencies refer to the key characteristics that should be

possessed by successful entrepreneurs in order to perform entrepreneurial functions effectively.
Competencies are described as the combination of their knowledge, skill, and attitude to
effectively accomplish their goals. Based on my research on David H. McConnell, I had found
some characteristic that really define him.

Initiative

Initiative is a foundation for more specific skills and knowledge needed by those
establishing or contributing to social or commercial activity. David H. McConnell was more
than able to take a step forward and take actions that was based on his big picture. He will
always be ahead of others and as he was leading and initiate, he will always be a leader in any
field that he tried, mostly in business.

For example, at first, David H. McConnell, sold books as a door-to-door salesman to

New York homes. He had initiated an idea that if he can sell books door-to-door, he should
start selling perfumes door-to-door. He started direct selling perfumes from door-to-door just
like that.

Sees and Acts on Opportunities

Based on Cambridge Dictionary: "opportunity an occasion or situation which makes it

possible to do something that you want to do or have to do, or the possibility of doing
something". A thriving business is all about seizing opportunities. David H. McConnell always
search for opportunities and grabbed it as he sees it. He had the opportunistic mindset and the
main beliefs and attitudes related to opportunistic thinking.

In example, David H. McConnell not only search for opportunities in his industry but
he saw an open opportunities in banking industry as he was one of the founders of the Suffern
National Bank of which he became vice president in 1901, president in 1922 and chairman of
the board in 1927. He was again elected chairman of the board and president in 1933 and
continued in one or the other office until his death.

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4.0 STRENGTH, WEAKNESS, OPPORTUNITY, THREAT (SWOT) ANALYSIS

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT
Analysis is a technique for assessing these four aspects of your business. SWOT Analysis can
make the most of what you've got, to your organization's best advantage. And you can reduce
the chances of failure, by understanding what you're lacking, and eliminating hazards that
would otherwise catch you unawares. It also helps a business to craft a strategy that
distinguishes you from your competitors, and so compete successfully in your market.

Helpful in achieving objectives Harmful in achieving objectives

Internal STRENGTHS WEAKNESS

- Strong dealer community - Need more investment in new

- Strong brand portfolio technologies
- High attrition rate in workforce

External OPPORTUNITIES THREATS

- New customers for online - New technologies by competitors

channel - No regular supply of innovative
- New trends in consumer products
behaviour

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 As one of the leading firms in its industry, Avon Products, Inc. has numerous strengths
that enable it to thrive in the marketplace. These strengths not only help it to protect the market
share in existing markets but also help in penetrating new markets. Some of the strengths are
strong dealer community. It has built a culture among distributor & dealers where the dealers
not only promote company’s products but also invest in training the sales team to explain to
the customer how he/she can extract the maximum benefits out of the products.

Next, Avon Products Inc has a strong brand portfolio. Over the years Avon Products,
Inc. has invested in building a strong brand portfolio. The SWOT analysis of Avon Products,
Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization
wants to expand into new product categories.

Weakness are the areas where Avon Products, Inc. can improve upon. First, Avon Inc
weakness is they need to invest more in new technologies. Given the scale of expansion and
different geographies the company is planning to expand into, Avon Products, Inc. needs to put
more money in technology to integrate the processes across the board. As right now, the
investment in technologies is not at par with the vision of the company.

Secondly, high attrition at workplace is the other weakness. Attrition is a process in

which the workforce dwindles at a company, following a period in which a number of people
retire or resign, and are not replaced. Compare to other organizations in the industry Avon
Products, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors
on training and development of its employees.

Avon Products Inc can find opportunities on online channels as it attracts ne customer.
Over the past few years, the company has invested vast sum of money into the online platform.
This investment has opened new sales channel for Avon Products, Inc. In the next few years,
the company can leverage this opportunity by knowing its customer better and serving their
needs using big data analytics.

Next, another opportunity that can be grab is new trends in consumers behaviour. It
provides a great opportunity for the organization to build new revenue streams and diversify
into new product categories too as Avon Products Inc. is hard to be successful outside of their
core business.

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 As a big and successful firm, Avon Product Inc. is also open to threats. The first threat
is new technologies developed by other competitors in the same industry. New technologies
developed by the competitor or market disruptor could be a serious threat to the industry in
medium to long term future.

Lastly, no regular supply of innovative products is also one of Avon Product Inc.
biggest threat. Over the years the company has developed numerous products but those are
often response to the development by other players. Secondly the supply of new products is
not regular thus leading to high and low swings in the sales number over period of time.

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5.0 CONCLUSION

To conclude all of the above, Avon Products Inc, had been and will always be one of
the successful companies in their industry. Even though the CEO is no longer David Hall
McConnell, their leader or CEO will always carry the mindset that their founder has pass along
the company’s journey. David Hall McConnell will always be look up upon when mentioning
about great entrepreneur. Lastly, even if Avon has many weakness and threats, their strength
is way more than able to completely get rid of the thing that get into their ways in achieving
their objectives. Also, their opportunities are more than enough that their threat is not enough
to make them concern at the highest level. Lastly, Avon Products Inc, and the founder, David
Hall McConnell will always be the biggest example in term of entrepreneurship.

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6.0 REFERENCES

- David Hall McConnell, 1976, Great Oak: A History of the California Perfume

Company (Now Avon Products, Inc.)

- Bud Hastin, 1939, Avon Collector's Encyclopedia

- McConnell, Sr., D. H., A History of the California Perfume Company, 1903, Page 8

- https://www.avonworldwide.com/

- http://www.californiaperfumecompany.com/

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