INTRODUCTION

26

COMPANY PROFILE

AMWAY GLOBAL LIMITED

TypePrivate

Founded1959

HeadquartersAda , Michigan , United states

Area servedWorldwide

Key peopleSteave Van Andel (Chairman)Doug De-Vos (President)

IndustryLifestyle, Wellness and MLM

ProductsAmway home, Glistar, G&H, Nutrilite

RevenueUS$ 11.8 bill

FounderRich Van Andel, Jay Van Andel

ParentAlticor

Websitewww.amway.com

INTRODUCTION

For the modern business organization, developing goods or services is not enough. Goods must also be available in the right quantity and at the right location in order to reach the customer.

For the organizations themselves, distribution strategies should never be under-rated. Developing an effective way of reaching customers may be the cornerstone upon which their successes are founded.

Take Reader's Digest and the unique way in which it sells products to its customers. What about Vision Express and the revolutionary reforms it has prompted in the sale of glasses? One reason for their success is that they reach their customers in a better and more appropriate way than their competitors.

This case study focuses on Amway and the success it has achieved using the oldest form of distribution - direct selling.

Founded in Ada, Michigan in 1959, Amway has become one of the world's largest 'Direct Selling' companies. The company's first product L.O.C. was one of the earliest biodegradable cleaners and is still marketed by Amway.

Today, the company has developed into a global corporation selling more than 400 products and employing in excess of 13,000 people, in over 70 countries and territories around the world. It

manufactures and markets products, which range from household cleaners, laundry products, toiletries, cosmetics and house wares to vitamins and food supplements.

Amway also markets products on behalf of other manufacturers, such as Talkland, Bosch, Black & Decker, Kenwood, Pierre Cardin, Aiwa and Philips.

Consumers are really interested in buying and using High quality, world class products of Amway and the Interest of consumers toward these products is the reason of success of Amway.

In ten years of commercial operation, Amway India has established a nation-widepresence in over 125 offices and 55 city warehouses and four regional mother warehousesThe distribution and home delivery network set up with the support of independent logisticspartners is spread across over 3,000 locations.

Amway conducts business through a number of affiliated companies in more than ninety countries and territories around the world. It is ranked by Forbes as one of the largest private companies in the United States and by Deloitte as one of the largest retailers in the world. Amway is more than an income opportunity or a company or products. Its aboutputting people in control of their lives. Its about connecting people to others who respect them, who share their goals and aspirations. Its about supporting people in theirachievements. Amway is about people connecting people toa better way of life. Amway has more than 6000 employees worldwide. In addition, Amway has more than 3.6 million Independent Business Owners (IBOs) around the world.

Amway Opportunity Foundation (AOF)Amway Opportunity Foundation (AOF) a registered non-profit organization which looks after Amway Indias Corporate Social Responsibility (CSR). Amway distributors are also volunteers of AOF and they have enthusiastically participated in all AOF activities .Globally, Amways CSR campaign is known as the One by One Campaign for Children.

Promoting Free Enterprise and Self-EmploymentAmway has conducted several seminars on Entrepreneurial Development and Direct Selling in concert with the Confederation of Indian Industries (CII) and the All India Management Association (AIMA) onthe benefits oforganized direct selling.Member - IDSA (IndianDirect Selling Association)Amway India Enterprises Pvt. Ltd. is a member of the India Direct Selling Association. The Indian Direct Selling Association is an association of companies engaged in the business ofdirect selling in India. Its members are of high national and international repute having set standards in delivering quality goods and in following ethical business practices.

Vision of Amway Helping people live better lives. Showing where the business wishes to be in the future.Mission of AmwayThrough the partnering of Distributors, Employees, and the Founding Families and the support of quality products and service, we offer all people the opportunity to achieve their goals through the Amway Sales and Marketing Plan. Broad over riding statement of purpose. To facilitate bestbusiness opportunities. To deliver high-quality products to semi-urban and urban homes in diverse areas ofinsurance, home tech, home care, personal care, cosmetics and wellness.Goal of Amway The development of new business opportunities. To increase the company's role in relations to social responsibility. To provide excellent customer service. Community ServicesAmway, its Independent Business Owners and employees are involved in improving the communities in which they do business. Amway are committed to serve their customers to fulfill their needs by focusing efforts on discovering and thereby meeting stated and unstated requirements. Amway promote a culture of openness and mutual trust by interacting objectively and without underlying personal interests. Amway are committed to honor, encourage and support individuals and teams who contribute, through their behaviorand actions, to thesuccess of the organization. Social responsibilities performed by AMWAY One by One Campaign for Children Amway Opportunity Foundation (AOF) National Project for the Blind

The Decade of growth As vowed by Jay Van Adel the night of the 1969 disaster, Amway rebuilt the aerosol plant and went on. The '70s began with sales of more than $100 million at estimated retail, and kept going strong. After a lengthy investigation, the FTC verified that Amway is a genuinebusiness opportunity and not a "pyramid."The Billion-Dollar DecadeThe '80s will be remembered for the first Billion Dollar Year at estimated retail in 1980.Building expansion at Amway World Headquarters continued at breakneck speed as Amway scrambled to keep pace with demand, opening its new cosmetics plant in Ada , Michigan. The Next GenerationAs carefully planned by Rich andJay, the second generation VanAndel and DeVos familiestook the helm during the ' 90s. The Policy Board was formed and Steve Van Andel and DickDeVos succeeded their fathers as Chairman and President. Distributors witnessed a similartrend, with the second generation of many distributor families taking on important leadership roles.

New HorizonsIn 2000, Amway prepared for a new century and anew exciting era. Almost 50 years after Amwaybegan, the DeVos and Van Andel families created anew structure to meet the challenges of this new century. A parent company, Alticor, was established with subsidiaries Amway, Quixtar and Access Business Groupthe latter to consolidate manufacturing and distribution for theenterprise.At the helm of Alticor are Steve Van Andel (Chairman) and Doug DeVos(President), jointly holding the Office of the Chief Executive. Today each area of thebusiness, including Amway, has the freedom to build on its strengths. Amway continues tobe a leading company in the direct selling industry. Its fundamental principlesfreedom,family, hope and rewardhold as true today asthey did in thevery beginning. Amway continued to expand, reaching past the borders of the US to offer the same opportunities in other countries:- Australia - 1971- Europe and parts of Asia - 1974- Japan - 1979- Latin America - 1985- China - 1995- Africa - 1997- India - 1998- Russia - 2005- Vietnam -- 2008AwardsAs a corporate leader in promoting environmental awareness and education, Amway received the prestigious United Nations Environment Program Achievement Award in 1989.Corporate Citizenship Award - On November 08, 2005, the United States Chamberof Commerce awarded Alticor with the Corporate Citizenship Award in the category of International Community Service for the One byOne Campaign for Children

AMWAY INDIAAmway promotes individual entrepreneurship through its innovative direct selling approach of world class consumer products. Amway India is the countrys leading direct selling FMCG-company which manufactures and sells world-class consumer products. Itsbusiness opportunity andall itsproducts arecovered by100% MoneyBack Guarantee. Amway sources all its products from within India, thereby providing stimulus to the local manufacturing industry. Amway India is a wholly owned subsidiary of US $ 7.2 billion Amway Corporation,Ada, Michigan, USA. Established in 1995,Amway India commencedits commercial operations in May 1998 and hasemerged as the largest Direct Selling FMCG Company. The Company is headquartered at the National Capital Region of India - New Delhi. Amway has invested in excess of US $ 35 million (Rs. 151crore) in India of this; US $ 6million (Rs. 26crore) is in the form of direct foreign investment. Amway India has 400 full time employees and has generated indirect employment for 1,650 persons at all the contract manufacturerlocations. The Company has provided income generating opportunity to over 4,50,000 active independent Amway Business Owners. Amway India provides free andunlimited training total its distributors to help them grow their business. Amway India conducted over 29,000training sessions during in the past 12-months with an attendance of over 1.5 million Amway Business Owners and prospects. Amway India recorded a sales turnover of over Rs.800 crore during January 07 - December 07. Amway India is a member of the Indian Direct Selling Association (IDSA). The IDSA is an industry regulatory body, with several reputed international and Indian Direct Selling companies as members. Amway India is also member of the Confederation of Indian Industries (CII) and Federation of Indian Chambers of Commerce (FICCI).

PRODUCTS AND SERVICESOver 450 unique, high-quality products carry the Amway name in the areas ofnutrition, wellness, beauty and home, as well as commercial products and a variety ofservices (from which 105 products are offered in India). In addition, Amway independentbusiness owners in selected markets sell additional brand-name goods through local merchandise catalogues, plus a variety of services and educational products. All products are backed by acustomer satisfaction guarantee.Nutrition and WellnessNutritive is the worlds leading brand of vitamin, mineral, and dietary supplements, grown harvested and processed on itsown certified organic farms.

CosmeticsOur skin is the outward appearance of who or what we are , or what we would like to be. But it is more than a simple cover. It is the largest organ of our body - a complex and dynamic system that is vital to our health and reflects it as well.

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INCLUDEPICTURE "http://htmlimg1.scribdassets.com/77xnlgj7pctdfg1/images/14-0c9762357f.jpg" \* MERGEFORMATINET ArtistryArtistry is one of theworlds top five largest-selling prestige brands of facial skincare and color cosmetics.AttitudeAll products of Attitude contain Skin Vitalizing Complex that synergistically combine to cleanse, Replenish & Moisturize the skin making it soft & supple.Home CareAmways Home Care Brands provide complete cleaning systems that fit with everyones needs. Their versatile, effective product systems offer the features and benefits consumers want. No matter what your lifestyle, Amways Home Care products make light work of yourcleaning chores.SA8SA8 Gelzyme is India's only3-in-1 laundry detergent which pretreats, cleans andsoftens. LOCLOC High Suds is a multipurpose household liquid cleaner.

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Dish DropsDish Drops is a concentrated hand dishwashing liquid with a powerful "Triadic Detergency System".Personal CareAmway Personal Care products have built global reputation based on their world-class research and development. These products are designed to deliver the ultimate grooming experience and the confidence thatlasts long.GlisterGlister Toothpaste is a revolutionary Multi-Action Toothpaste with Sylodent that offers seven benefits.PersonaPersona Premium 3 in 1 Soap is a complete soap for the entire family promises refreshing confidence.SatiniqueSatinique Advanced Range with unique Ceramide Infusion System uses nature's own renewing technology to rejuvenate, strengthen and protect your hair.

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DynamiteDynamite's range of male grooming products, formulated internationally is designed to deliver the ultimategrooming experience.G&HG&H Range enriched with the goodness of Glycerin and Honey, deeply nourishes anhydrates the skin for a healthy glow. Apart from this Amway also deals in Air purifiers and Water purifiers, Jewellery ,Electronics, & Insurance products.Manufacturing StrategyAlmost all Amway India products are manufactured in the country through thirdparty contract manufacturers. With the exception of Cosmetics range (Artistry*) and someproducts in Nutrition and Wellness category, all Amway India products and bottles are manufactured in India. The products match Amways global quality standards. They carry a tamper-proofseal and a 100% Money Back Guarantee'. If not completely satisfied with the product, the consumer can return it fora refund.Amway products are environment friendly, and are not tested on animals. Amway encourages the return of its used product bottles for re-cycling and to prevent their misuse. To bring the identified contract manufacturers production facilities and skills to international standard, Amway has invested in excess of US$ 4 million (approx. Rs. 17crore). The transferof this state-of-the-art, world-class technology, hasbeen free ofcost.SALES AND MARKETING PLANThe Amway is private co operative organization. The Amway Sales and Marketing Plan put you in control, allowing you the flexibility to work where and when you want, giving you time for family and friends as well as the opportunity to earn a good income. It adapts easily to your needs and ambitions, and grows with them, offering you all thepersonal support and assistance you require to become the Business Owner you want to be. With Amway you areConnectedto the global leader in multilevel marketing, with over 40years of experience,Supportedby great products and people who will help you succeed, and finallyIn Controlof your life. The Amway Sales and Marketing Plan is a low risk, low start-up cost business opportunity that is open to everyone. It allows you to build your business through retailingproducts and sponsoring other people who, in turn, can retail products and offer the business opportunity to others. By passing your sales and marketing knowledge to your developing team, you not only build your own business network but also enable others to build one oftheir own.Marketing strategyA strategy is a plan of action designed to achieve the goals of the organization. Increasing a marketing strategy for the Super Concentrated Cleaning System, Amway needed to set out the key objectives it wanted to achieve. The following objectives for the brand were set: To increase distribute or profitability and productivity by providing a new and exciting business opportunity To optimize consumer convenience and value through enhanced product differentiation with this exclusive and revolutionary cleaning systemTo provide innovative and unique products to enhance the image of Amway Homecare.

A New Strategy of Amway Agreement with the government and company Resumed Operations Goods will be sold in retailoutlets and through Sales Representatives Income of sales distributors will be based on direct selling done by them Same Distribution centers served as retail outlets for the company Localizationofemployees Localization ofproduction and Raw Material Localization ofresearch and development Transparencyand Credibility of companysmanagement

USE OF MLM IN AMWAYMulti-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only forsales they personally generate, but also for thesales of others they recruit, creating a down line of distributors and a hierarchy of multiple levels ofcompensation. Other terms for MLM includenetwork marketing ,direct selling , and referral marketing. Although the products and company are supposed to be marketed directly to consumers and potential business partners by means of relationship referrals and word ofmouth marketing, critics have charged that most MLMs are pyramid schemes.MLM companies have been a frequent subject of criticism as well as the target oflawsuits. Criticism has focused on their similarity to illegal pyramid schemes, price-fixing of products, high initial start-up costs, emphasis on recruitment of lower-tiered salespeople over actual sales, encouraging if not requiring salespeople to purchase and use the companys products, potential exploitation of personal relationships which are used as new sales and recruiting targets, complex and sometimes exaggerated compensation schemes, and cult-like techniques which some groups use to enhance their members' enthusiasm and devotion. Not all MLM companies operate the same way, and MLM groups havepersistently denied that their techniques areanything but legitimate business practices. Amway use direct Selling model to sell its products & services. For this Amway offer membership to their potential customers. These members also act as agents for Amway& sell their products entirely on their wish. Amway provide points on each product sell to their IBO which further get converted into monetary terms. Also, these points have worldwide acceptance.

To start the Amway Business one needs to buy the Amway Business Kit and be sponsored in the business by an already existing Amway Business Owner. Despite what you may have heard, starting an Amway business doesn't involve handing over large amounts ofcash. With your efforts and our knowledge, the Amway opportunity can become everything from a means of earning a little extra cash to building an international business. Where do you want to go?Business Kit--Priced at Rs995 only