A V O Nthe company for women

Global Strategic RecommendationDecember 6, 2010

Jen Callaghan J.R. Longino Rasa Navickaite Meghan Quinn Lia Torre

Executive Summary

Corporate Overview (Lia)

• Brief History • Mission Statement • Current Long Term Objectives • Current Short Term Objectives• Corporate Strategies• Core Competencies

Internal Analysis

• Management Structure-Lia – HR/Organizational Analysis – Social/Corporate Responsibility

• Financial/Accounting-Meghan– Profitability Analysis – Liquidity Ratios   – Debt/Leverage Analysis – Stock Price History – Consolidated Income Statement

Internal Analysis (cont.)• Marketing-Jen

– Key Markets – Customer Profile – Product, price, place, promotion – Gross Sales by Geography/Business Segments

• Technology and Operations-JR– Research and Development – Information Systems – Production and Operations

• Resource/Capabilities considerations-Rasa – Where is the “Value”? – What is “rare”? – What can or cannot be imitated?– Does the Organizational structure get in the way, or facilitate a

Global approach?

Marketing• Customer Profile

– Women ages 18-54

• Product

– Global manufacturer and marketer of beauty and related products.

– Competitors: Beauty industry- CPG and direct selling companies

– Categories: Beauty, Fashion, and Home.

• Beauty: color cosmetics, fragrances, skin care and personal care

• Fashion: fashion jewelry, watches, apparel, footwear and accessories

• Home: gift and decorative products, housewares, entertainme:nt and leisure products and children’s and nutritional products

• Price

– Avon’s belief is that “beauty should be affordable and accessible to everyone”

– Mass and “masstige” offerings

– “Smart Value” products were focused on in 2009

• Place

– #1 Direct Selling firm in the world

– Invested $250MM in ‘05 to improve earnings

– Avon Sales Leadership — through which Representatives earn by both selling and recruiting — has been rolled out to approximately 50

countries worldwide.

– Launched global Internet platform

• Promotion

Key Markets- Gross Sales2009 Sales $ mil. % of total

Latin America 4,103.2 40

North America 2,262.7 22

Central & Eastern Europe

1,500.1 14

Western Europe, Middle East & Africa

1,277.8 12

Asia/Pacific 885.6 9

China 353.4 3

TOTAL 10,382.8 100 100

Central operations for Global Brand Marketing, Global Sales and Supply Chain. Financial information

External Analysis

• Macro Factors– Institutional Considerations– Economic Forces – Demographic Forces– Technological Forces– Other country-specific considerations o  

• Micro Factors– Relevant five forces analysis (for each relevant

industry and geography)– Global Industry Overview and Analysis– Competitive Analysis– Market share analysis

Global Position

• Current Global Strategy and Position Global Potential

• Organizational Capabilities• SWOT Analysis• TOWS Analysis• Criteria for Strategy Evaluation• Strategic Recommendations ·     

Mission/Objectives

• Revised Mission Statement• Revised Long-Term Objectives • Revised Short-Term Objectives• Key success factors

Global Strategy

• Selected strategies• Selected countries (why?) • Strategy implementation• Institutional Considerations• Industry Considerations• Resource Considerations • Strategy results and projections• For each strategic recommendation, what is

the qualitative and quantitative (cost, revenue, and profit) impact ·      

Financial Projections (five years)

• Income Statement• Balance Sheet • Cash flows   

References/Appendix