Avon Goes Global

Avon is a global leader in cosmetics and beauty-care market, with an alternative approach to the business. The company is based in the US, but in the last years it had a rapid and thriving expansion in the foreign markets, especially the developing or underdeveloped countries. Avon’s secret is to minimize cost of goods sold with the extensive use of representatives, avoiding all the costs related to opening stores. This strategy allowed Avon, as well, to be present in the remotest parts of the world. Avon became, since it started its globalization strategy, an expert in product differentiation and foreign markets adaptation. The strong global characterization that Avon pursues stems primarily from the saturation of the North-American market, where a huge competition exists in the cosmetics and beauty markets, and there is a slow growth rate in the industry. Furthermore, in developing countries such as Brazil (where Avon has a huge presence in terms of reps) and Russia, the human factor in terms of sales potential is still predominant. The financial crisis in the first decade of the century gave, as well, reason to Avon, with an increase in the need of field salesforce of the market in general (especially women workforce).

Looking at future developments ahead of Avon, the industry (SIC: 2844) shows opportunities coming primarily from Latin America, Eastern Europe and Pacific Rim areas. Strengths that Avon might claim in enforcing their global presence could be summarized as follows:

- Consistent experience in the different markets;

- Acquired ability in the understanding of the different needs;

- Strong and recognizable brand.

Conversely, weaknesses addressable to Avon Products, Inc. could be the following:

- Issues in effectively entering a new market/excessive confidence;

- Weak presence in terms of advertising and retail stores.

Opportunities in strengthening Avon’s presence in global markets would be:

- Revenue growth investing in countries with rising...