Avon: Makeup or Makeover

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AVON: Makeup or Makeover? Founded in 1886, and trying to grow steadily since, Avon is a company that is not scared of being different. Those differences, however, have recently led to concerns as both their US and International divisions suffered losses. At the same time, a corporate shakeup is leaving members of the Avon family worried and Avon’s new CEO, Sherilyn McCoy, has the difficult job of cutting costs, retaining focus, and putting the tired company back on track, all while overseeing continued international growth. Over a century old, Avon is a company that has built an empire based on direct beauty sales from private sales representatives. While Avon experienced great growth in the post-war era, as women slowly entered the business world, beginning in the recession at the end of the last century, and continuing for the last decade, Avon has struggled in many areas and recently announced a multi-year reorganization plan encompassing restructuring on numerous fronts. While their International sales divisions have earned more than in the US, the recent increased popularity of internet sales, combined with the decreased popularity of door-to-door sales, has left shareholders worried and concerned about Avon’s future. The direct market beauty industry is huge – totaling $136 billion in global market sales is 2011. Competition is fierce and Avon has to constantly offer new products and options. However, Avon’s advantage lies in its sales force – regular women selling to friends and neighbors. At the same time, Avon has limited opportunities in the United States, and real expansion is only happening outside the United States. Avon is contending with many market and non market issues. In the non market arena, a recent bribery scandal and ensuing investigation in their Chinese network has soured many investors and caused stocks to fall dramatically.

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