Avon Calls Foreign Markets. Question: Why Avon

¶ … Avon Calls Foreign Markets." Question: Why Avon dependent foreign operations home (U.S.) operations? Please provide a couple reasons relate case.

Avon Calls on Foreign Markets

Avon is one of the oldest and largest cosmetics manufacturing and retailing organization. The company has penetrated the industry through a specific model of direct sales through Avon consultants and representatives. The Avon products are as such not available in traditional stores and can only be accessed directly from company representatives. Aside from the retailing model, this feature is also important as it added a business dimension to the company. Namely, women across the country became Avon representatives and strived to promote and sell the items for their own gain.

Today, Avon makes intense efforts to increase its presence within the global community and to become more competitive internationally. In this setting, a question is being posed relative to the reasons which promoted Avon to rely less on its incomes and operations in the United States and to focus more and more on the international segment. The answer to this question is a multifold one, with complex elements including:

The general state of the economy

The nature of the cosmetics industry in the United States

Direct selling opportunities in emergent countries.

The United States of America has been hit hard by the economic crisis. The country represents not only the origin of the worst economic disaster since the Great Depression of 1929 -- 1933, but it is also one of the most severely affected regions. People in the United States have lost their jobs; they have seen their life savings and pensions washed away and they have had their homes foreclosed by banks.

All in all, the American population is facing the devastating impacts of the economic crisis, and in this setting, the demand for cosmetics products decreases. Specifically, the disposable income of the population has decreased and this has materialized in a decreased purchase power, as well as shift in the items purchased, as more emphasis is being placed on strict necessities.

The situation described below applies however only to a specific segment of Avon consumers, those in the lower and medium income categories, whose financial instability has been further accentuated by the crisis. But aside from the recession, Avon becomes increasingly dependent on the international market also because the American industry is highly saturated. The untapped territory for fragrances, cosmetics or toilettes is barely existent (Avon Calls on Foreign Markets case).

In other words, the cosmetics industry in the United States is a mature one, in which the company does no longer identify opportunities for future growth and development. Avon has already penetrated the American marketplace and it does not identify new segments to target. The only means of generating new income from the United States would be that of increasing the sales volumes. In the setting of the crisis however, this is not a suitable alternative.