Questions
1. The Avon case demonstrates the application of strategic management and the strategic management process. Initially, Avon’s CEO Andrea Jung devised a strategy to attract a new customer base by creating a product line specifically for women aged 16-24. This strategy was in contrast to their original core customers who were 35 and older. The key to achieving success was capturing the younger market subset, as this generation tends to heavily spend on beauty products. Moreover, improving the company’s image was crucial, and Jung implemented a strategy known as “going Hollywood” which involved incorporating celebrity endorsements. Celebrity influence plays a significant role in driving customers’ purchasing decisions, hence why this approach was adopted.
2. There are several performance measures that Avon’s strategic decision makers may use to evaluate the outcomes of the restructuring initiatives. Firstly, the increase in product innovation and representative recruitment has been crucial for Avon’s success in targeting 17 million young women with new fashion and beauty products. Secondly, the enhanced competitiveness of the brands, especially among the younger generation, is an important measure to assess the success of the significant restructuring initiatives. It is important to determine whether people are more or less familiar with the Avon brand after these changes. Lastly, Avon is now more conscious of the need to improve their R&D sales compared to their competitors. To achieve this, Jung implemented various measures such as company streamlining initiatives including layoffs, outsourcing of services to low-cost countries, doubling advertising expenditures, and simplifying the manufacturing structure.
3. Avon’s first female CEO is Andrea Jung, which may come as a surprise considering Avon’s primary focus on women. Research indicates that as of July 2013, there are only 12 women CEOs among Fortune 500 companies, accounting for a small percentage but showing a significant improvement with a 4% increase. According to Catalyst, despite women making up 40% of the global labor force, they possess just 1% of global wealth. These statistics highlight the historical dominance of men in leadership roles and emphasize the importance of organizations like Catalyst advocating for women’s rights in leadership positions. The fact that even a 4% rise is considered noteworthy underscores the previously male-dominated nature of corporate leadership. Overall, female CEOs remain uncommon and represent a minority, highlighting the ongoing need for gender diversity at the CEO level.
4. The website of Avon (www.avoncompany.com) is a valuable source for understanding the company’s vision and mission, which guide its choices and actions. It also offers information about the executive team apart from Andrea Jung, like Kimberly Ross, who assumed the role of Avon’s Chief Financial Officer in 2011. In her position, Ross manages Finance, Strategic Planning, and Investor Relations. Moreover, the website allows visitors to explore one of Avon’s brands and learn about their strategies for hair care products. “Advance Techniques” is a product line that consists of top-notch shampoos, conditioners, and styling products designed to give customers an affordable salon experience. These products cater to women with varying ages, hair types, and ethnicities. It seems that Avon incorporates advanced technology strategies in their array of hair care offerings.
