Case Study Description of Avon.com (A), Spanish Version
To maximize their effectiveness, color cases should be printed in color.Avon has always sold its products through a large independent direct-selling organization. However, it is now considering whether it should sell directly to the consumer. The company's independent representatives number 500,000 in the United States alone. Yet, there seems to be potential for Avon to grow their business on the web in new and different ways. What benefits might Avon reap from using the Web to improve its relationship with its customers, with its representatives, and between the representatives and their customers. Includes color exhibits.
Swot Analysis of "Avon.com (A), Spanish Version" written by David B. Godes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Representatives Avon facing as an external strategic factors. Some of the topics covered in Avon.com (A), Spanish Version case study are - Strategic Management Strategies, Compensation, Internet, Marketing, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Avon.com (A), Spanish Version casestudy better are - – cloud computing is disrupting traditional business models, wage bills are increasing, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Avon.com (A), Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Avon.com (A), Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Representatives Avon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Representatives Avon operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Avon.com (A), Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Avon.com (A), Spanish Version case study
2. Improving business portfolio management of Representatives Avon
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Representatives Avon
Strengths Avon.com (A), Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Representatives Avon in Avon.com (A), Spanish Version Harvard Business Review case study are -
Successful track record of launching new products
– Representatives Avon has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Representatives Avon has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Representatives Avon is one of the leading recruiters in the industry. Managers in the Avon.com (A), Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Representatives Avon are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Representatives Avon digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Representatives Avon has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Sales & Marketing industry
– Avon.com (A), Spanish Version firm has clearly differentiated products in the market place. This has enabled Representatives Avon to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Representatives Avon to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Avon.com (A), Spanish Version Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Representatives Avon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Avon.com (A), Spanish Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Sales & Marketing field
– Representatives Avon is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Representatives Avon in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Representatives Avon is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Representatives Avon is present in almost all the verticals within the industry. This has provided firm in Avon.com (A), Spanish Version case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Representatives Avon has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Avon.com (A), Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Representatives Avon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Representatives Avon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Avon.com (A), Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Avon.com (A), Spanish Version are -
Interest costs
– Compare to the competition, Representatives Avon has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Lack of clear differentiation of Representatives Avon products
– To increase the profitability and margins on the products, Representatives Avon needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Avon.com (A), Spanish Version, is just above the industry average. Representatives Avon needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Avon.com (A), Spanish Version, it seems that the employees of Representatives Avon don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, firm in the HBR case study Avon.com (A), Spanish Version has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Representatives Avon 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Representatives Avon has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Representatives Avon even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Representatives Avon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Avon.com (A), Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Representatives Avon is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Representatives Avon needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Representatives Avon to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Avon.com (A), Spanish Version HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Representatives Avon has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Avon.com (A), Spanish Version that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Avon.com (A), Spanish Version can leverage the sales team experience to cultivate customer relationships as Representatives Avon is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Representatives Avon needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Avon.com (A), Spanish Version | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Avon.com (A), Spanish Version are -
Better consumer reach
– The expansion of the 5G network will help Representatives Avon to increase its market reach. Representatives Avon will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Developing new processes and practices
– Representatives Avon can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Representatives Avon can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Representatives Avon can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Representatives Avon can use these opportunities to build new business models that can help the communities that Representatives Avon operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Learning at scale
– Online learning technologies has now opened space for Representatives Avon to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Representatives Avon can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Representatives Avon can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Representatives Avon in the consumer business. Now Representatives Avon can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Representatives Avon to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Representatives Avon to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Representatives Avon has opened avenues for new revenue streams for the organization in the industry. This can help Representatives Avon to build a more holistic ecosystem as suggested in the Avon.com (A), Spanish Version case study. Representatives Avon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Representatives Avon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Avon.com (A), Spanish Version suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Representatives Avon can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Avon.com (A), Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Avon.com (A), Spanish Version are -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Representatives Avon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Representatives Avon
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Representatives Avon.
Technology acceleration in Forth Industrial Revolution
– Representatives Avon has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Representatives Avon needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Representatives Avon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Representatives Avon needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Representatives Avon can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Avon.com (A), Spanish Version, Representatives Avon may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Shortening product life cycle
– it is one of the major threat that Representatives Avon is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Representatives Avon demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Representatives Avon.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Representatives Avon needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Representatives Avon in the Sales & Marketing sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Avon.com (A), Spanish Version Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Avon.com (A), Spanish Version needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Avon.com (A), Spanish Version is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Avon.com (A), Spanish Version is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Avon.com (A), Spanish Version is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Representatives Avon needs to make to build a sustainable competitive advantage.
