Avon's Operations

AVON Case Study Avon was founded in 1886 and has developed to become one of the oldest and largest producer and marketer of beauty-related products throughout the world. As part of enhancing its productivity and success, Avon has recently switched its marketing strategy to transform its image and enhance its marketing approaches. The company has combined national responsiveness with globally standardized marketing initiatives to push into foreign markets and increase its global operations.

The firm focuses on standardized products with global brand and conveys its successful practices and organizational learning from one country to the next. Marketing Orientations Marketing orientation can be defined as a strategy that is utilized by a business or company to enhance its position in order to meet the needs of its customers. There are various marketing management orientations with varying mechanisms for creating, producing, and marketing products i.e. strategic marketing, selling, production, social marketing, and product orientations (Roberts, n.d.).

The production marketing orientation is the only one that does not apply to Avon since the firm focuses on a sales orientation rather than product adaptation in its global operations. The applicability of product orientation is evident in the Avon's modification of its products to meet certain needs of customers. The strategic marketing orientation is evident in Avon's modification of its distribution technique, especially in China. In contrast, social marketing orientation is incorporated in the firm's global image initiatives of supporting women and their needs.

The selling orientation is characterized by the use of direct sales representatives in Avon's marketing approaches. Dependence on Foreign Operations Avon has become increasingly dependent on its foreign operations rather than its domestic or U.S. operations to an extent that it has its own sales operations in more than 65 countries across the globe. The increased dependence on foreign operations is largely influenced by the company's efforts to create a global image that portrays it as a firm that supports women and their needs.

Moreover, the outlook in foreign markets is brighter than the United States outlook, which is gloomy. This implies that the company has focused on foreign markets because these markets have higher potential for increased productivity and success as compared to the United States market. The other reason for this dependence is that the domestic market i.e. U.S. market is fully exploited and has no untapped market for its products due to the presence of several competitors and intense rivalry.

Socioeconomic and Demographic Changes Similar to other companies operating globally, Avon is vulnerable to some socioeconomic and demographic changes that could affect its operations. These changes include increase in the number of employed women, preference to buy expensive products from Avon's competitors, and economic growth of various countries. The economic growth of various countries would have positive impacts on Avon's operations since it will make its products more appealing to customers with more disposable income who would have otherwise considered the products as secondary needs.

The other two changes would impact it negatively since increase in the number of employed women will affect the ability of women to schedule appointments for the direct sales. As more women are employed, they are likely to opt for expensive products from Avon's competitors as part of creating perceptions of a higher social status. Impact of a Global Recession on Avon's Operations Since Avon is more dependent on foreign operations than domestic ones, it is likely to suffer from any global recession such as the recent one in 2008.

According to Marcial (2008), this company has seemingly been recession-resistant since women don't avoid buying beauty products whether in good or bad times. However, Patterson & Kennedy (2011), states that any global recession would impact the company's operations by lessening its share value. Moreover, a global recession would contribute to lower sales, especially in BRIC countries where potential customers would prefer buying other products rather than beauty products because of decrease in disposable income. A global recession would increase Avon's sales in the U.S.

since the company will reach out to many potential customers who are lose their jobs through the direct sales marketing strategy. Major Competitive Advantages The major competitive advantages that Avon has over its rivals include its direct selling strategy and the high numbers of sales representatives in different countries (Ng, 2013). The other competitive advantages include increased accessibility of products to customers even in remote locations because of the high number of sales representatives, use of global branding approaches, and lesser costs of distributions.

These strategies can easily be duplicated by its competitors through huge investments in these marketing strategies. Pros and Cons of Distribution Technique Avon's distribution strategy entails not selling its products to retail establishments within the United States except kiosks that are managed by some of its sales representatives. This distribution technique has several advantages including enhanced proximity to customers, lesser distribution costs, and ability to market relatively cheap products. However, the disadvantages include increased demands on the management to maintain the distribution strategy.

Selection of New Suppliers Avon employs supplier diversity initiative and adopts an increasingly centralized supply chain process in selection of suppliers ("Supplier Diversity," n.d.). The selection of new suppliers would require the use of different criteria on where Avon can manufacture its products. The major concerns when evaluating firms that are potential suppliers include ability to access products easily even in markets with diverse opportunities and the level through which the supplier can penetrate the market.

The criteria the company should use to make such decisions include supplier diversity, cost of production, government regulations, economic factors, costs of distribution, the legal framework, market access, social factors, and environmental factors. Challenges in Maintaining Global Manufacturing and Supply Chain Network Despite its tremendous success throughout the years, Avon continues to face challenges in maintaining and enlarging its global manufacturing and supply chain network. One of these challenges that is brought.