Avon Case Study

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Avon Case Analysis

Organizational Mission

Avon wants to provide everyone with high quality and innovative health and beauty products as well as financial opportunities through sales representatives that are easily obtainable, in many ways, in every part of the world. Avon hopes by bringing these products to everyone everywhere through global markets the company can improve the quality of life for anyone around the world.

Corporate Objectives

Corporate objectives bring structure to a company's operations so it will sustain growth, achieve its mission/vision and set the outcome and target for the company to achieve. Corporate objectives include financial and strategic objectives.

Financial Objectives:

Growth in Sales:

In 2001 the success of the Goodbye to Breast Cancer lipstick campaign, inventory clearance programs, and the increase of active representatives acquired through the successful implementation of the Sales Leadership program resulted in revenues growing 5% from $5,682 million in 2000 to $5,958 million in 2001.

The growth in sales was due to the 9% increase in units because of the success of the programs implemented that are mentioned above. Avon plans to increase sales annually by continuing to recruit Leadership Representatives around the world, utilizing the Internet to help these Representatives sell Avon products more efficiently, and extending the Avon brand to new products and possibly new channels. (3)

Bigger profit margins:

Lower sales in Latin America than expected and additional strategic spending on consumer marketing initiatives caused the slight decrease in profits for the 2001 year. The drop may have been a lot worse if it was not offset by considerable margin improvement form the business transformation initiatives. Despite the incredible achievements of the business transformation initiatives (about $150 million in savings), Avon's operating margin went down 20 basis points last year from 16.1% to 15.9%. The benefits from the business transformation...