Avon

Avon Products Inc.: Case Analysis

Strategic Profile and Case Analysis Purpose

Avon Products, Inc. an international manufacturer and distributor of beauty, household, and personal care products sold through approximately 6.4 million active independent sales representatives in over 100 countries across the world. In 1886, David H. McConnell founded the company as The California Perfume Company. Avon is the world’s largest direct-selling enterprise (Hitt, Ireland & Hoskisson, 2013). The company has previously enjoyed great success as a leading global beauty company. However, the company is now facing an array of issues that has led to a decrease in Avon’s share price by 50 percent. In December 2011, Avon Products, Inc. announced that its CEO and Executive Chairman – Andrea Jung – would step down from her position to be replaced by Sherilyn S. McCoy. The company was also facing bribery charges in some of its overseas operations as well as an SEC investigation into whether an Avon official made confidential comments to an analyst. It was clear that McCoy would face many challenges (Hitt, Ireland & Hoskisson, 2013). The case questions whether CEO Sheri McCoy is the right match for the challenge and strategic leader who can work with others to find ways to facilitate Avon’s efforts to create value for all stakeholders and perhaps especially for shareholders? Our question is whether Avon can remain relevant to their loyal customers while simultaneously rebuilding its reputation and brand image.

Situation Analysis

General Environmental Analysis

Political/legal. Politics and regulations always play a critical role for organizations that conduct businesses in foreign countries. Avon must continue to monitor the policies of foreign governments in the countries in which it operates to understand the current and projected influences of those governments on their competitive actions and responses. As stated in the case, Avon uses a third party, which is an extra...