Description
Business Intelligence Roadmap: The Complete Project Lifecycle for Decision-Support Applications
UBI - Business
Intelligence Concepts
Presented by:
Business Intelligence Concepts
IIM/EURO MBA Studies
Presented by:
Ivana Rajkov
Aleksandra Simsic
Ljiljana Radanov
Miroslav Pajic
Radomir Cupara
Milan Djeric
Competitors
Customers
Distribution
Value and ethics
Market trends
Finance
Geography
Identity
Avon
Avon is the largest direct
selling beauty company in
the world.
Avon is the first company to be selected by the Chinese government to test direct selling.
The first fragrance in the newly-launched Today.Tomorrow.Always trilogy wins a FiFi Award.
2005
Avon launches its First-everMens Catalog, calledM
Avon Foundation launches newdomesticviolenceprogram, SpeakOut Against
DomesticViolencewith celebrity spokesperson Salma Hayek
2004
Avon signs tennis greats, Venus and Serena Williams, to be the company s
First global celebrityspokespersons to promoteAvon
2000
First ever global advertisingcampaignthemed'Let s Talk' 1999
First AvonRunningGlobal Womens Circuit - Avon Breast Cancer 3-Day fundraising walk. 1998
Avon launches its first women's health care initiative program in the U.S. with the
"Breast CancerAwareness Crusade".
1993
Avon U.K. launches the company s first womens healthcareinitiativeto raise funds and
awareness for breast cancer.
1992
Avon becomes the first beautycompanyto bringthe alphahydroxy(AHA) technology. 1991
First major cosmetics manufacturer to announcea permanent endto animal testing. 1989
Avoncelebrates its centennial: 1886-1986 1986
First time sales top $1 billion. 1972
Avon listed on New York Stock Exchange, trading starts April 20. 1964
First televisionadvertisinglaunched. 1953
California Perfume Company namechangedto AvonProducts, Inc. 1939
First international officeopened: Montreal, Canada. Manufacturing starts in 1915. 1914
First print ads published in Good Housekeeping Magazine and First colorcatalog 1905
First laboratorybuilt in Suffern, NY 1897
First catalogissued 1896
California Perfume Company (CPC) founded in NewYork City byDavid H. McConnell.
First Avon Sales Representative, Mrs. P.F.E. Albee, now-famous direct-selling method
First product produced called the Little Dot Perfume Set included five fragrances
1886
Identity
1
Womenhavebeenselling
Avonsince1886 - 34
years beforewomenin
the US wonthe right to
vote!
To provide individuals to earn in support of their well-being and happiness.
To serve families throughout the world with products of the backed by a
.
To render a service to customers that is outstanding in its and
To give to employees and Representatives, on whose contributions Avon
depends.
To share with others the .
To meet fully the obligations of corporate citizenship by
To maintain and cherish the .
O U R G U I D I N G
T R U S T
R E S P E C T
B E L I E F
H U M I L I T Y
I N T E G R I T Y
G L O B A L L Y
A focus on as a key driver of sales growth,
New product lines such as products and
.
Further expansion of ,
A career opportunity for ,
Exploration of geographic opportunities, in particular
Within the following discussion and analysis, we utilize the key performance indicators ( KPIs )
defined below to assist in the evaluation of Avon business.
which consists of cosmetics,
fragrances, skin care and toiletries;
which consists of:
$100 million state- of- the art Research and
Development Center in Suffern, New York
Opened in 2005 and constructed on the existing Suffern, New York site, this facility represents Avon s continuing commitment
to deliver leading-edge, technology-based cosmetic products to the .
Product categories, include:
Low
High
High Low
1
Beauty
Net Sale
Growth
Net Sale by Brand share
2
Beauty
Plus
3
Beyond
Beauty
Legend:
1 Avon Beyond Color,
Anew, Mark, Avon Solutions,
Skin So Soft, Avon Wellness,
Advance Technique Hair Care
2 Watches, Apparel,
Accessories.
3 Home products and
Gift&Decorative products.
Strengthening and repositioning key mid-tier brands
such as mass skin care brand, Avon Solutions and
Avon Color.
Launch a new Avon Solutions franchise called
Ageless Results, with anti-aging technology now
formulated at a mass price point to capitalize on
growing consumer interest in this segment.
Breakthroughs in the nail, lip and mascara
categories
Focus on innovation will be supported by a
significant acceleration in advertising. In 2006
alone, total company advertising will increase by
50%.
In quantitative analysis advertising delivers a greater
payback for Avon because of its ability to motivate
both consumers and Representatives.
United States
Puerto Rico
Dominican Republic
Canada
Chile
Ecuador
Central America
Brazil
Bolivia
Argentina
Venezuela
Uruguay
Peru
Paraguay
Mexico
Thailand
Taiwan
New Zealand
Japan
Hong Kong
Chile
South Korea
Malaysia
Indonesia
Australia
Serbia &
Montenegro
United Kingdom
Ukraine
Turkey
Spain
Poland
Moldavia
Macedonia
Lithuania
Latvia
Italy
South Africa
Slovenia
Slovakia
Russia
Romania
Portugal
Israel
Ireland
Hungary
Greece
Germany
France
Estonia
Czech Republic
Bulgaria
Finland
Croatia
Bosnia
Avon s
global markets
Geography
Finance
In Asia Pacific, total revenue
was consistent with the prior year
as declines in China and Japan
were offset by increases in nearly
all other markets in the region.
In Asia Pacific, total revenue
was consistent with the prior year
as declines in China and Japan
were offset by increases in nearly
all other markets in the region.
In Latin America, total revenue
increased in 2005 with increases in all
markets in the region, except Mexico.
The purchase of licensee in Colombia
favorably impacted the region s revenue
growth by 2 points.
In Latin America, total revenue total revenue
increased increased in 2005 with increases in all
markets in the region, except Mexico.
The purchase of licensee in Colombia
favorably impacted the region s revenue revenue
growth by 2 points growth by 2 points.
In late February 2006, Avon was granted a direct selling license by China s
Ministry of Commerce. That license will allow Avon to commence direct selling in
China under the regulations issued by that government in late 2005
In late February 2006, Avon was granted a direct selling license by China s
Ministry of Commerce. That license will allow Avon to commence direct selling in
China under the regulations issued by that government in late 2005
Future outlook
Lip balms, specialty hair care products,and skin care products for men will be among the
fastest growing categories.
Favorable demographics and technologically advanced products will drive sales.
Market Trend 4
Sales will exceed
, an average annual
increase of 2.9% 2.9% from 2002.
Actual and Forecast Growth of the
Cosmetics&Toiletries Industry
Actual and Forecast Growth of the
Cosmetics&Toiletries Industry
0,00%
0,50%
1,00%
1,50%
2,00%
2,50%
3,00%
3,50%
4,00%
4,50%
1997 2002 2007
The U.S. cosmetics and toiletries market has experienced growth for 11 consecutive
years, with sales reaching almost at the manufacturers' level in 2005.
the lowest level of growth since 1993.
facial treatments, personal cleansing products,
fragrances for women, shampoos, and hand and body lotions account for about 40% of
total industry sales.
Sale by product class, 2005
16.1%
Wellness
(weight loss products, vitamins, etc.)
8.3%
Leisure/educational
(books, videos, toys, etc.)
14.3% Services/other
30.5%
Home/family care products
(cleaning products, cookware, cutlery, etc.)
30.8%
Personal care products
(cosmetics, jewelry, skin care, etc.)
Percent of Sales by Major Product Groups
Biggest producers and markets are .
In 2004. Western European market summed in wholesale
prices, and 58.10 billions EUR in retail
More then
is consisted of 5 countries: Germany, France, Great
Britain, Italy and Spain.
Western market consumption increased 3.5% in 2004, Spain had the biggest
growth of 7%, the least growth had Germany with 1.5%, while Swiss market slops
down to -1.1%
Moderate, consistent, and somewhat slowed down growth of production and market
(2004- 4,8: 2001- 4,1%: 2002- 3,6% and 2003-3,5%)*
Skin care products will have the fastest growth, following with hair care and bath products.
Switching soaps with other newer products.
Massive of man care products (20-30%) and teeth whitening products
will remain its high level in global costs, primarily for accomplishing goals in
decreasing waste, protection of surroundings and human health.
Even though markets are growing because of rationalization in industries, unemployment are
expected to increase.
*Source: Colipa
• Environmental Management Systems
(ISO 14001 worldwide)
• Global Environmental Audit Program (All
manufacturing locations are audited every 3
years)
• Global Environmental Metrics
• Compliance
• Waste Management and Recycling
• Air
• Energy
• Water Consumption
• Greenhouse Gases
Avon policy requires:
Conduct operations in a manner that demonstrates
respect for the environment through the
;
Meet or exceed all environmental laws and regulations
of the countries and communities in which Avon operate;
Continue to
that improve the environmental quality of
operations and products across their life cycle,from initial
design to ultimate disposal;
Value and ethics 5
Product Safety & Integrity s role is
to:
Ensure new & existing cosmetic products are
and meet regulatory requirements;
Develop & implement cosmetic
(ingredient/product specifications, test
methodology & manufacturing controls);
Ensure product claims based on are
adequately substantiated.
Breast Cancer Programs
Women s Empowerment Programs
Speak Up Against Domestic Violence
Sales Representative Earnings
Training
Recognition and Awards Programs
INVESTING IN SALES
REPRESENTATIVES
Area
Zone and
District managers.
Avon has one of the most compelling consumer sales channels in the world.
Associates work in over 63 countries around the
world, in: manufacturing; sales management and
support; marketing;customer service; research and
development; legal; finance and other departments.
Distributing sale channels
Over the past decade, the market has been going through a .
New channels of distribution have been capturing marketers' interest, forcing many to rethink their retail
strategies as well as rationalize product offerings.
Mass merchandisers remained the leading outlet with a 27% share.
Mass merchandisers were also one of the fastest growing channels in 2005, along with direct sales and salons.
Drug stores
18%
Direct sale
17%
Department stores
16%
Speciality stores
8%
Salons
5%
Mass
merchandise
27%
All others
9%
79,90%
20,10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Female Male
54%
23%
8%
14%
0%
10%
20%
30%
40%
50%
60%
35-54 18-34 65+ 55-64
76%
5%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Married Other Single
32%
24%
8%
35%
0%
5%
10%
15%
20%
25%
30%
35%
Some college,
technical or
trade school
High school
graduate or
less
Postgraduate College
Graduate
Self-Indulgence - What do I do just for me? Physical Appearance/Aging - "Fountain of Youth Options"
93% of women globally saying they put some effort into improving their
overall appearance
51%
49%
38%
38%
36%
0% 10% 20% 30% 40% 50% 60%
Eating healthy
Drink plenty of water
Exercising
Facial Skin care routine
Get plenty of sleep
More than half of women say the first thing they would do when signs
of aging emerge would be to reach for an appropriate facial skin care
product, preferably one that contains both natural herbs and medicinal
plants, and modern science's most advanced ingredients.
Globally, 95 % of women say that they have not had any
cosmetic surgery.
Concerns
about the risk
27%
High cost
40%
lack of
interest
33%
Race against time" and skin care
Avon 2005 Global Women s Survey
buying
make-up
30%
eating out
30%
hair done
40%
All others
37%
Limited Brands
5%
Estee Lauder
9%
Avon
13%
L'Oreal
20%
Procter&Gamble
16%
Shiseido Co.
Ltd.
Estee Lauder
Colgate
Palmolive
Avon
Produtcs
Rank
Market
Cap
Rank
Profit
Margin
Rank
Growth
Sales
Rank
Employees
Rank
Revenue
Company
Colgate-
Palmolive
Avon
Shisheido
Estee
Lauder
4-point turnaround plan
to restore sustainable growth
41%
20%
13%
7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Nivea Avon Dove Oriflame
23%
12%
14%
7%
0%
5%
10%
15%
20%
25%
Nivea Avon Dove Oriflame
MBI and Target Group Index
5 top brands of body care products, most often used in 2005.
Sample: urban population in Serbia (without Kosovo) - 3024 participants use products from TGI base of 10028
participants
49%
28%
14%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Nivea Avon Dove Oriflame
Continuing of spreading production
selling program
under penetrated in the market at mid-tier
price segments
Cooperation with competitive companies
in humanitarian actions
Spreading of selling network
Growth on Central & Eastern Europe
Development of education for employees
Perfecting new keys of selling
Development of products for women of
other races according to their skin types
Perfection alternative for estetic hirurgy
Untrained selling personnel in some
regions
Bad prediction of sales volume
Bad marvet network on certain markets
(Japan,Pacific)
Bad management of stocks & supplies
Poor marketing activities
Marketing orientation toward determines
markets
Included sales shortfalls in China and
deceleration of growth in Central and
Eastern Europe, as well as Latin America
SWOT analysis
High quality wide range of products
Innovation of products
Qualitative & successful management
Long tradition of the company
Market leadership in direct sales field
Ways of selling
Not testing products on animals
Developed selling network companied
to competition
Motivating discounts for costmors
Motivating extra earnings based on
increased volume of sales
Different politics of the countries on which
markets we are involved
New regulative in cosmetics industry
New competitors
Business depends on different needs
Continues decreasing of customers from
USA
Aggressive competitor's marketing
Well educated staff from competitive
companies
Launched market actual product from
competitive retail network well developed
Global economic recession
SWOT analysis
1. Product innovation
2. Simplifying business system
3. Harmonizing process
4. Increasing shared service centers
5. Reducing total number of products
6. Hold fixed costs flat to down
Under penetration of mid-tier brand price segments.
Innovation of anti-aging technology formulated at mass price point
Acceleration in advertising, which will increase by 50%
High focus on international markets Global Direct Selling team, a multi -
level marketing program that enables Representatives to earn through
personal sale, as well as through bonuses and training.
Avon direct selling Uni, to institulize world class training, ensuring
consistency and focus across all markets.
Capitalizes on very strong markets
Commercial Business Unit CBU are key commercial strategy along with
new Global operating structure.
Maximizing Brand power and respond quickly and effectively by
supporting CBUs by Business Units and Global Supply Chain
Reduce 50% of layers
Reduce number of management positions by 20%-30%
0
10
20
30
40
50
0 50 100 150 200
COUNTRIES
S
a
l
e
s
%
AVON
YVES ROCHER
MARY KAY
AMWAY
NU SKIN
HERBALIFE
BEAUTICONTROL
Take adventage for being the world s biggest direct seller of beauty products for break through into new
markets. Avon has called China , the fastest-growing cosmetics market in Asia,its No.1 opportunity and key
to its growth prospects.
In November 2005 Avon announced a four-point turnaround plan
to restore sustainable growth in business.
Plan builds on:
1. key equities
2. focuses on unleashing the full power of unique brand and
channel.
This plan includes:
In total, restructuring
initiatives will deliver over
$300 million in savings
annually, which will be
largely reinvested in
growth.
Accelerate world-class product innovation.
Significant increase of investment in product
innovation and more than doubling advertising
spending by 2008.
Brand-building strategy. Focus on major
breakthroughs in Skin Care and Color.
Dramatically improve merchandising excellence and
shopping appeal with enhanced brochure and more
compelling consumer promotions.
Investment in direct-selling channel and establishing
a centrally managed Global Direct Selling function.
Relaunch direct selling in China, largest growth
opportunity market.
Realign total cost structure and leverage assets
more strategically to fuel bigger investments and
drive revenue growth.
Implement projects focused on realigning global
manufacturing base;
Securing additional supply chain efficiencies in
the areas of procurement and distribution processes;
and
Regionalizing, centralizing and outsourcing
certain activities and transactional processes.
Become leaner, faster-moving, more empowered
organization and increase training and
development for employees.
New global operating structure that increases the
number of geographic business units.
Flatten the organization and reduce management
layers to bring senior leaders closer to markets, and
markets closer to Representatives and consumers.
Rename geographic regions to Commercial
Business Units, or CBUs, as key commercial
strategies.
Empowered Global Business Units, GBUs Brand
Marketing and Global Supply Chain.
Strategy proposal
for Serbian market
Sources:
Business Intelligence Roadmap: The Complete Project Lifecycle for
Decision-Support Applications, By Shaku Atre, Larissa T. Moss , Published
by Addison Wesley, 2003
www.avoncompany.com
www.youravon.com
www.avon.co.yu
www.nyse.com
www.reuters.com
www.dsa.org
www.colipa.com
www.in-cosmetics.com
www.euromonitor.com
doc_459631212.pdf
Business Intelligence Roadmap: The Complete Project Lifecycle for Decision-Support Applications
UBI - Business
Intelligence Concepts
Presented by:
Business Intelligence Concepts
IIM/EURO MBA Studies
Presented by:
Ivana Rajkov
Aleksandra Simsic
Ljiljana Radanov
Miroslav Pajic
Radomir Cupara
Milan Djeric
Competitors
Customers
Distribution
Value and ethics
Market trends
Finance
Geography
Identity
Avon
Avon is the largest direct
selling beauty company in
the world.
Avon is the first company to be selected by the Chinese government to test direct selling.
The first fragrance in the newly-launched Today.Tomorrow.Always trilogy wins a FiFi Award.
2005
Avon launches its First-everMens Catalog, calledM
Avon Foundation launches newdomesticviolenceprogram, SpeakOut Against
DomesticViolencewith celebrity spokesperson Salma Hayek
2004
Avon signs tennis greats, Venus and Serena Williams, to be the company s
First global celebrityspokespersons to promoteAvon
2000
First ever global advertisingcampaignthemed'Let s Talk' 1999
First AvonRunningGlobal Womens Circuit - Avon Breast Cancer 3-Day fundraising walk. 1998
Avon launches its first women's health care initiative program in the U.S. with the
"Breast CancerAwareness Crusade".
1993
Avon U.K. launches the company s first womens healthcareinitiativeto raise funds and
awareness for breast cancer.
1992
Avon becomes the first beautycompanyto bringthe alphahydroxy(AHA) technology. 1991
First major cosmetics manufacturer to announcea permanent endto animal testing. 1989
Avoncelebrates its centennial: 1886-1986 1986
First time sales top $1 billion. 1972
Avon listed on New York Stock Exchange, trading starts April 20. 1964
First televisionadvertisinglaunched. 1953
California Perfume Company namechangedto AvonProducts, Inc. 1939
First international officeopened: Montreal, Canada. Manufacturing starts in 1915. 1914
First print ads published in Good Housekeeping Magazine and First colorcatalog 1905
First laboratorybuilt in Suffern, NY 1897
First catalogissued 1896
California Perfume Company (CPC) founded in NewYork City byDavid H. McConnell.
First Avon Sales Representative, Mrs. P.F.E. Albee, now-famous direct-selling method
First product produced called the Little Dot Perfume Set included five fragrances
1886
Identity
1
Womenhavebeenselling
Avonsince1886 - 34
years beforewomenin
the US wonthe right to
vote!
To provide individuals to earn in support of their well-being and happiness.
To serve families throughout the world with products of the backed by a
.
To render a service to customers that is outstanding in its and
To give to employees and Representatives, on whose contributions Avon
depends.
To share with others the .
To meet fully the obligations of corporate citizenship by
To maintain and cherish the .
O U R G U I D I N G
T R U S T
R E S P E C T
B E L I E F
H U M I L I T Y
I N T E G R I T Y
G L O B A L L Y
A focus on as a key driver of sales growth,
New product lines such as products and
.
Further expansion of ,
A career opportunity for ,
Exploration of geographic opportunities, in particular
Within the following discussion and analysis, we utilize the key performance indicators ( KPIs )
defined below to assist in the evaluation of Avon business.
which consists of cosmetics,
fragrances, skin care and toiletries;
which consists of:
$100 million state- of- the art Research and
Development Center in Suffern, New York
Opened in 2005 and constructed on the existing Suffern, New York site, this facility represents Avon s continuing commitment
to deliver leading-edge, technology-based cosmetic products to the .
Product categories, include:
Low
High
High Low
1
Beauty
Net Sale
Growth
Net Sale by Brand share
2
Beauty
Plus
3
Beyond
Beauty
Legend:
1 Avon Beyond Color,
Anew, Mark, Avon Solutions,
Skin So Soft, Avon Wellness,
Advance Technique Hair Care
2 Watches, Apparel,
Accessories.
3 Home products and
Gift&Decorative products.
Strengthening and repositioning key mid-tier brands
such as mass skin care brand, Avon Solutions and
Avon Color.
Launch a new Avon Solutions franchise called
Ageless Results, with anti-aging technology now
formulated at a mass price point to capitalize on
growing consumer interest in this segment.
Breakthroughs in the nail, lip and mascara
categories
Focus on innovation will be supported by a
significant acceleration in advertising. In 2006
alone, total company advertising will increase by
50%.
In quantitative analysis advertising delivers a greater
payback for Avon because of its ability to motivate
both consumers and Representatives.
United States
Puerto Rico
Dominican Republic
Canada
Chile
Ecuador
Central America
Brazil
Bolivia
Argentina
Venezuela
Uruguay
Peru
Paraguay
Mexico
Thailand
Taiwan
New Zealand
Japan
Hong Kong
Chile
South Korea
Malaysia
Indonesia
Australia
Serbia &
Montenegro
United Kingdom
Ukraine
Turkey
Spain
Poland
Moldavia
Macedonia
Lithuania
Latvia
Italy
South Africa
Slovenia
Slovakia
Russia
Romania
Portugal
Israel
Ireland
Hungary
Greece
Germany
France
Estonia
Czech Republic
Bulgaria
Finland
Croatia
Bosnia
Avon s
global markets
Geography
Finance
In Asia Pacific, total revenue
was consistent with the prior year
as declines in China and Japan
were offset by increases in nearly
all other markets in the region.
In Asia Pacific, total revenue
was consistent with the prior year
as declines in China and Japan
were offset by increases in nearly
all other markets in the region.
In Latin America, total revenue
increased in 2005 with increases in all
markets in the region, except Mexico.
The purchase of licensee in Colombia
favorably impacted the region s revenue
growth by 2 points.
In Latin America, total revenue total revenue
increased increased in 2005 with increases in all
markets in the region, except Mexico.
The purchase of licensee in Colombia
favorably impacted the region s revenue revenue
growth by 2 points growth by 2 points.
In late February 2006, Avon was granted a direct selling license by China s
Ministry of Commerce. That license will allow Avon to commence direct selling in
China under the regulations issued by that government in late 2005
In late February 2006, Avon was granted a direct selling license by China s
Ministry of Commerce. That license will allow Avon to commence direct selling in
China under the regulations issued by that government in late 2005
Future outlook
Lip balms, specialty hair care products,and skin care products for men will be among the
fastest growing categories.
Favorable demographics and technologically advanced products will drive sales.
Market Trend 4
Sales will exceed
, an average annual
increase of 2.9% 2.9% from 2002.
Actual and Forecast Growth of the
Cosmetics&Toiletries Industry
Actual and Forecast Growth of the
Cosmetics&Toiletries Industry
0,00%
0,50%
1,00%
1,50%
2,00%
2,50%
3,00%
3,50%
4,00%
4,50%
1997 2002 2007
The U.S. cosmetics and toiletries market has experienced growth for 11 consecutive
years, with sales reaching almost at the manufacturers' level in 2005.
the lowest level of growth since 1993.
facial treatments, personal cleansing products,
fragrances for women, shampoos, and hand and body lotions account for about 40% of
total industry sales.
Sale by product class, 2005
16.1%
Wellness
(weight loss products, vitamins, etc.)
8.3%
Leisure/educational
(books, videos, toys, etc.)
14.3% Services/other
30.5%
Home/family care products
(cleaning products, cookware, cutlery, etc.)
30.8%
Personal care products
(cosmetics, jewelry, skin care, etc.)
Percent of Sales by Major Product Groups
Biggest producers and markets are .
In 2004. Western European market summed in wholesale
prices, and 58.10 billions EUR in retail
More then
is consisted of 5 countries: Germany, France, Great
Britain, Italy and Spain.
Western market consumption increased 3.5% in 2004, Spain had the biggest
growth of 7%, the least growth had Germany with 1.5%, while Swiss market slops
down to -1.1%
Moderate, consistent, and somewhat slowed down growth of production and market
(2004- 4,8: 2001- 4,1%: 2002- 3,6% and 2003-3,5%)*
Skin care products will have the fastest growth, following with hair care and bath products.
Switching soaps with other newer products.
Massive of man care products (20-30%) and teeth whitening products
will remain its high level in global costs, primarily for accomplishing goals in
decreasing waste, protection of surroundings and human health.
Even though markets are growing because of rationalization in industries, unemployment are
expected to increase.
*Source: Colipa
• Environmental Management Systems
(ISO 14001 worldwide)
• Global Environmental Audit Program (All
manufacturing locations are audited every 3
years)
• Global Environmental Metrics
• Compliance
• Waste Management and Recycling
• Air
• Energy
• Water Consumption
• Greenhouse Gases
Avon policy requires:
Conduct operations in a manner that demonstrates
respect for the environment through the
;
Meet or exceed all environmental laws and regulations
of the countries and communities in which Avon operate;
Continue to
that improve the environmental quality of
operations and products across their life cycle,from initial
design to ultimate disposal;
Value and ethics 5
Product Safety & Integrity s role is
to:
Ensure new & existing cosmetic products are
and meet regulatory requirements;
Develop & implement cosmetic
(ingredient/product specifications, test
methodology & manufacturing controls);
Ensure product claims based on are
adequately substantiated.
Breast Cancer Programs
Women s Empowerment Programs
Speak Up Against Domestic Violence
Sales Representative Earnings
Training
Recognition and Awards Programs
INVESTING IN SALES
REPRESENTATIVES
Area
Zone and
District managers.
Avon has one of the most compelling consumer sales channels in the world.
Associates work in over 63 countries around the
world, in: manufacturing; sales management and
support; marketing;customer service; research and
development; legal; finance and other departments.
Distributing sale channels
Over the past decade, the market has been going through a .
New channels of distribution have been capturing marketers' interest, forcing many to rethink their retail
strategies as well as rationalize product offerings.
Mass merchandisers remained the leading outlet with a 27% share.
Mass merchandisers were also one of the fastest growing channels in 2005, along with direct sales and salons.
Drug stores
18%
Direct sale
17%
Department stores
16%
Speciality stores
8%
Salons
5%
Mass
merchandise
27%
All others
9%
79,90%
20,10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Female Male
54%
23%
8%
14%
0%
10%
20%
30%
40%
50%
60%
35-54 18-34 65+ 55-64
76%
5%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Married Other Single
32%
24%
8%
35%
0%
5%
10%
15%
20%
25%
30%
35%
Some college,
technical or
trade school
High school
graduate or
less
Postgraduate College
Graduate
Self-Indulgence - What do I do just for me? Physical Appearance/Aging - "Fountain of Youth Options"
93% of women globally saying they put some effort into improving their
overall appearance
51%
49%
38%
38%
36%
0% 10% 20% 30% 40% 50% 60%
Eating healthy
Drink plenty of water
Exercising
Facial Skin care routine
Get plenty of sleep
More than half of women say the first thing they would do when signs
of aging emerge would be to reach for an appropriate facial skin care
product, preferably one that contains both natural herbs and medicinal
plants, and modern science's most advanced ingredients.
Globally, 95 % of women say that they have not had any
cosmetic surgery.
Concerns
about the risk
27%
High cost
40%
lack of
interest
33%
Race against time" and skin care
Avon 2005 Global Women s Survey
buying
make-up
30%
eating out
30%
hair done
40%
All others
37%
Limited Brands
5%
Estee Lauder
9%
Avon
13%
L'Oreal
20%
Procter&Gamble
16%
Shiseido Co.
Ltd.
Estee Lauder
Colgate
Palmolive
Avon
Produtcs
Rank
Market
Cap
Rank
Profit
Margin
Rank
Growth
Sales
Rank
Employees
Rank
Revenue
Company
Colgate-
Palmolive
Avon
Shisheido
Estee
Lauder
4-point turnaround plan
to restore sustainable growth
41%
20%
13%
7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Nivea Avon Dove Oriflame
23%
12%
14%
7%
0%
5%
10%
15%
20%
25%
Nivea Avon Dove Oriflame
MBI and Target Group Index
5 top brands of body care products, most often used in 2005.
Sample: urban population in Serbia (without Kosovo) - 3024 participants use products from TGI base of 10028
participants
49%
28%
14%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Nivea Avon Dove Oriflame
Continuing of spreading production
selling program
under penetrated in the market at mid-tier
price segments
Cooperation with competitive companies
in humanitarian actions
Spreading of selling network
Growth on Central & Eastern Europe
Development of education for employees
Perfecting new keys of selling
Development of products for women of
other races according to their skin types
Perfection alternative for estetic hirurgy
Untrained selling personnel in some
regions
Bad prediction of sales volume
Bad marvet network on certain markets
(Japan,Pacific)
Bad management of stocks & supplies
Poor marketing activities
Marketing orientation toward determines
markets
Included sales shortfalls in China and
deceleration of growth in Central and
Eastern Europe, as well as Latin America
SWOT analysis
High quality wide range of products
Innovation of products
Qualitative & successful management
Long tradition of the company
Market leadership in direct sales field
Ways of selling
Not testing products on animals
Developed selling network companied
to competition
Motivating discounts for costmors
Motivating extra earnings based on
increased volume of sales
Different politics of the countries on which
markets we are involved
New regulative in cosmetics industry
New competitors
Business depends on different needs
Continues decreasing of customers from
USA
Aggressive competitor's marketing
Well educated staff from competitive
companies
Launched market actual product from
competitive retail network well developed
Global economic recession
SWOT analysis
1. Product innovation
2. Simplifying business system
3. Harmonizing process
4. Increasing shared service centers
5. Reducing total number of products
6. Hold fixed costs flat to down
Under penetration of mid-tier brand price segments.
Innovation of anti-aging technology formulated at mass price point
Acceleration in advertising, which will increase by 50%
High focus on international markets Global Direct Selling team, a multi -
level marketing program that enables Representatives to earn through
personal sale, as well as through bonuses and training.
Avon direct selling Uni, to institulize world class training, ensuring
consistency and focus across all markets.
Capitalizes on very strong markets
Commercial Business Unit CBU are key commercial strategy along with
new Global operating structure.
Maximizing Brand power and respond quickly and effectively by
supporting CBUs by Business Units and Global Supply Chain
Reduce 50% of layers
Reduce number of management positions by 20%-30%
0
10
20
30
40
50
0 50 100 150 200
COUNTRIES
S
a
l
e
s
%
AVON
YVES ROCHER
MARY KAY
AMWAY
NU SKIN
HERBALIFE
BEAUTICONTROL
Take adventage for being the world s biggest direct seller of beauty products for break through into new
markets. Avon has called China , the fastest-growing cosmetics market in Asia,its No.1 opportunity and key
to its growth prospects.
In November 2005 Avon announced a four-point turnaround plan
to restore sustainable growth in business.
Plan builds on:
1. key equities
2. focuses on unleashing the full power of unique brand and
channel.
This plan includes:
In total, restructuring
initiatives will deliver over
$300 million in savings
annually, which will be
largely reinvested in
growth.
Accelerate world-class product innovation.
Significant increase of investment in product
innovation and more than doubling advertising
spending by 2008.
Brand-building strategy. Focus on major
breakthroughs in Skin Care and Color.
Dramatically improve merchandising excellence and
shopping appeal with enhanced brochure and more
compelling consumer promotions.
Investment in direct-selling channel and establishing
a centrally managed Global Direct Selling function.
Relaunch direct selling in China, largest growth
opportunity market.
Realign total cost structure and leverage assets
more strategically to fuel bigger investments and
drive revenue growth.
Implement projects focused on realigning global
manufacturing base;
Securing additional supply chain efficiencies in
the areas of procurement and distribution processes;
and
Regionalizing, centralizing and outsourcing
certain activities and transactional processes.
Become leaner, faster-moving, more empowered
organization and increase training and
development for employees.
New global operating structure that increases the
number of geographic business units.
Flatten the organization and reduce management
layers to bring senior leaders closer to markets, and
markets closer to Representatives and consumers.
Rename geographic regions to Commercial
Business Units, or CBUs, as key commercial
strategies.
Empowered Global Business Units, GBUs Brand
Marketing and Global Supply Chain.
Strategy proposal
for Serbian market
Sources:
Business Intelligence Roadmap: The Complete Project Lifecycle for
Decision-Support Applications, By Shaku Atre, Larissa T. Moss , Published
by Addison Wesley, 2003
www.avoncompany.com
www.youravon.com
www.avon.co.yu
www.nyse.com
www.reuters.com
www.dsa.org
www.colipa.com
www.in-cosmetics.com
www.euromonitor.com
doc_459631212.pdf