AVON (The Company of Women) as it likes to be known is one of the biggest companies of the world with its business expanding in as many as 140 companies and over $9.9 billion of sales in year 2007. Currently AVON is a company with more than $10 billion annual revenues. According to 2008 data, company has 42000 employees worldwide. Main product line includes lipsticks, bath and skin lotions, perfumes, anti-germs cream, foundations and jewelry. Where as with the growing business now AVON also captures man and children. The fastest growing business for the firm is in the markets of China and Russia. The company uses direct selling as its core selling strategy and is the biggest direct selling company of the world with 5.4 million independent sales representatives all over the world.
AVON beliefs that they are champion in diversity, leadership, high standards, communication and team-work. These are the factors that every successful company has and AVON is one of these. It became possible for the company through the effective development of Cadre (using the most talented and effective people to train and organize the people and organize programs).Company has the history of career development programs. Lyn Kirby
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Company considers the development of Associates as the necessary step for its success. For that reason many programs have been launched worldwide for associates which include, short term assignments in other countries, sharing knowledge, Expanding knowledge, cross functional experience and developing coaches and mentors. The programs provided positive results as associates were motivated and they developed programs on their own.
As the largest company of the world in direct selling, AVON has always paid special attention to their direct sales representatives. They are provided good returns, flexible timings, facilities and programs other than work. Over all AVON has been successful in growing the business through using their direct work force, cadre development and associates.
Since about 70% of the revenue is generated outside the United States of America, it is the proof of being a global company. AVON has its operations in more than 100 countries and is dealing in variety of products, mostly women beauty related products. As a multi national company, AVON also faces few challenges such as dealing with multi cultural work force and multicultural market places. Following recommendations are suggested for the company in order to deal with these challenges:
Culturally diverse workforce:
AVON should continue their programs such as short term assignments in other countries, this will give exposure to their senior managements on country level and they will be able to handle people effectively.
Training programs should be conducted with the help of local trainers so that the locals can understand modern or new things in a more localized manner.
AVON should have people from different cultures in the management teams in country level and at upper level. This will increase the participation of people from different cultures and will also reduce the internal conflicts in the company.
HR policies must be competent to the local companies in each country so that employee retention could be high.
Diverse workforce is always an advantage for the company if managed effectively, thus AVON should also train their HR team so that they can understand diversity as well.
Multicultural Market place:
· As a multi national company AVON as an opportunity to expand its customers by delivering the products with the cultural taste of the country. Advertisement (catalogs adds) should use national celebrities and heroes.
· They should also come up with different products for different regions of the world. Like people in Asia have different skin than those in America.
· Themes and packaging of the products can also have some local popular colors in it, this will attract people more.
The company should focus on retention of their best employees and should hire people who are talented and have creativity. These people should come from diverse background and different countries at all levels of the company so that more diversity can be added to the organization, thus providing an competitive advantage.
Company should train their employees specially the sales teams so that they get better in dealing with the customer when they interact.
Training programs must focus on the career development of employees, so that employees feel important being a part of the organization.
Mentorship programs should be continued so that organization have the people inside who can replace the upper leader seat when empty.
Employees must be sent to other countries for limited time period trainings like most of the air lines do.
Employees can be connected through online groups and forums, so that all the employees from around the world feel a part of a family.
HR Plan of AVON for China:
As China is a very different country from all those countries where AVON already is, it should have the HR plan in accordance with Chinese tradition and values. China is known for its mass production concept with a low pay scales. Following recommendations must be considered.
As AVON is the American company and in China the image of USA is not very good, should hire more and more local people in the company, specially the sales representatives.
The Salaries of employees must be little higher than the competitors so that employees are satisfied and they spread good words about the company, this will build the image of the organization.
As the direct selling is not very useful in Chinese culture so far, AVON should go for advertisements.
Hiring’s must be done from different cities and all of them should be trained to maintain the organization culture as it is in other countries. This will maintain the AVON’s culture and will promote the values of the company.
As the Company is growing its business, it should go through hiring agencies for hiring because this will save its cost as well as will save the company from legal regulations (Zorkoczy, 1982).
As in every business role of IT is of vital importance in AVON. The company has its own online store and customers can buy the products online. IT has enabled AVON to reach the customers through Internet advertisements. Especially in developing countries where women have limited role, AVON has reached those women customers though Internet advertisements. Not only for customers but also people who like to invest can see the website of the organization and can locate the distributors and representatives near their location and can contact them from their home. It was never that easy before the IT revolution.
AVON can also equip their sales representative with laptops and digital screens. These representatives should be placed in malls where people can come by when they are shopping. Sales representatives should be given credit card charging machines so that they can sell the products on credit cards while selling at some ones door. This can work as people now in developing countries are having more and more credit cards and banks feel that the next big market for credit card user is in developing countries.
There is a stark difference between the spending per capita on beauty between India and other developed markets. Even then, there is a great potential for Avon in India. This is due to the fact that even though the actual amount spent per person may be just 1% of that of other persons in developed markets, the population in India is at least a 25-100 times than other developed markets. Thus, Avon may be able to capitalize on a larger target market with the ability to spend lesser amounts which should roughly balance out and make it equal to any other developed market.
The fact that $1 per person spending is quite low in terms of Avon products and that the company will require a large volume of sales to earn the same revenues as in any other developed market is a restraining factor. Nevertheless, given the fact that India is an emerging global economy with widespread influence on technology and trends, Avon has significant prospects in India (Zorkoczy, 1982).
Zorkoczy, P. (1982). Information technology: an introduction. Retrieved March 12, 2009