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Avon Company Overview and Expansion in China

Question:

Discuss about the Business Activities And Operations Of The Avon.

The report talks about the Avon Company. It explains that how the company is expanding and flourishing its business activities and operations in China. It outlines the key issues and obstacles which are faced by the Avon in China. It describes that how the company is overcoming on these key issues and challenges. It explains that how the company is achieving its goals and objectives in Chinese market.   It describes the mission and vision of the Avon in China. It also explains the desired outcomes and results of the company. It tells that how the company is producing various types of beauty and cosmetics products around the world.

Avon Products Inc is known as Avon which founded in 1886 by David H.McConnell. It is dealing with various beauty products, personal care products, and household products in China. It is the fifth biggest beauty company around the world. It is the second largest selling company across the world (Sutter et al, 2015). The company provides various types of beauty and cosmetics products to the consumers in the global market. In today’s era, the company is increasing its sales and revenue day by day. The firm is also expanding and exploring its business activities and operations. The company manufactures and produces various cosmetics and beauty products in China (Hunt, Fate and Dodds, 2011). The company maintains the strict control over Avon’s china. It is one of the biggest beauty companies in the world which is operating for 130 years. The company follows rules and legislation which have been made by the government in China. Further, the company is focusing and collecting information related to the safe and careful use of elements and ingredients (Azmi et al, 2016).  The firm provides employment opportunities to the women also. Avon products include cosmetics perfume, toys, and clothing. The company is creating a good image in the minds of the women further; it attracts more customers in the world. The female customers show more interest in the products of the Avon Company (Ergin, Ozdemir and Parilti, 2011).

Avon products are divided into three products category such as beauty, beyond beauty and beauty plus. The beauty products comprise cosmetics, skin care, fragrances, and toiletries products, beyond beauty products, include gift and home products, toys, candles, and decorative products while beauty plus consists apparel, watches, jewelry, and accessories (Ramli, 2015). The company also provides complementary services to increase the number of customers in the global market. Now a day’s the company is making good image and reputation in China by providing unique and attractive beauty products to the women as well as men. After the various researchers, it has been analyzed that Avon is one of the biggest players in the cosmetic industry around the world (Dayan and Kromidas, 2011).

Key Issues and Challenges Faced by Avon in China

There are various issues are faced by the Avon in China due to inadequate government rules and regulations. The company is using direct selling system to sale the cosmetics and beauty products across the world. Therefore, various issues arise in China due to direct selling system. The direct selling system has been banned by the government in China (Sheth, 2011). Thus, it affects the business activities and operations of the Avon. Further, it also influences the marketing mix especially in the aspects of the distribution of cosmetics and beauty products. Along with this, the organizational structure, framework and business model of the Avon Company was not fitted and well with the nation policies and rules which have been made by the government of China. Here, some of the key issues have been discussed below which the Avon company encountered in China (Jing, 2015).  

  • Although, cosmetics and beauty products are the part of the Chinese culture and values the government imposed restrictions on the sale of these products in China. It is the major issue which is faced by the Avon in China (Rosenbloom, Haefner and Lee, 2012). The government did not allow to the company for the sale of the cosmetics and skin care products in China. Further, the company cannot sale the beauty and cosmetics products directly to the customers in China. It is another issue which affects the profit and revenue of the Avon in that country. In this way, various key challenges are faced by the company while operating and managing business activities and operations in China (Choudhary, 2013).
  • Competition is another key issue which exists in China and it also influences the business operations of the cosmetics company in such country. There is rich competition in China among the cosmetics and beauty companies (Jing, 2015). There are approx 2800 companies manufacture and produce cosmetics and skin products in that country to attract more customers in the world. Thus, it can become a major issue for the Avon Company in China because people buy the local products at the reasonable and cheap prices. Thus, Avon has to bear the loss in such country. Further, people do not want to buy the costly products of such company. Mostly they prefer local company products in China and they purchase local products at appropriate prices (Santos and Williamson, 2015).
  • In addition, the Chinese government started to execute and implement strict rules, legislation, and policies to reduce the direct selling business in China. It is not only affected the Avon business but also affects the competitors such as Mary Kay. In this way, various obstacles and problems are faced by the company in such country. The firm cannot expand and explore its business in such country due to strict rules and regulations imposed by the Chinese government (Ramli, 2015).
  • The Chinese government banned direct selling in 1998 thus it also affects the marketing activities of the Avon in China. It is one of the biggest issues in such country which affects the revenue and profit of the cosmetics and Beauty Company (Kinkel, Kleine, and Diekmann, 2014).
  • The inadequate computer system is another key issue which is encountered by the Avon in China. It affects the activities and operations of the cosmetics company adversely.
  • The company cannot do advertisement and promotions of its beauty products due to various strict rules imposed by the Chinese government. Hence, the company is not able to increase and maximize its profit and revenue in such country. Advertisement and promotion are one of the important strategies of the Avon to attract more customers in such country. But the firm is not able to take benefits of this strategy in China (Yang, Jayashree, and Marthandan, 2012).
  • Research and development team is used by the company to evaluate and analyze the choices, needs, requirements, and expectations of the Chinese in such country. Therefore, huge investment is done by the company thus it affects the long-term revenue of the Avon company (Raj et al, 2012).
  • The company will have to provide training to the Chinese employees because the people of China are less efficient and cooperative. Therefore, the company will have to do large investment for providing training and development coaching to the workers in China. In addition, the company will have to make contacts with other companies and communities to understand and evaluate the preferences and needs of the Chinese. It also provides help to understand and measure the culture of the China. Further, the company needs to follow strict rules and regulations which have been made by the Chinese government. Further, the company has to pay double tax and import duties to the government thus it can affect the success and growth of the Avon in China. It is the major issue in such country. Along with this, the company is not able to maintain sustainability in such country, therefore, it affects the goodwill of the company. The company will not able to provide good returns to the shareholders in such country thus various challenges are faced by the company in China (Coulson-Thomas, 2011).
  • The macro environment is also another key challenge for the Avon Company. It affects the long-term business activities and administration of the cosmetic company in China. There are various factors exist in the external environment which affects the growth and progress of the beauty and cosmetic company in such country. Therefore, the company will have to evaluate and measure these factors to gain long-term competitive advantages in the global market.

All these key issues are faced by the Avon Company in China. These issues must be controlled and managed by the company to increase and maximize the long-term revenue and profit of the company. It will also help to overcome on the competitors in the world (Pereira de Carvalho, and Barbieri, 2012).

The main objective of the Avon is to increase and enhance the sales of the company to attract more consumers in the China. The company is considered as a leader which provides various cosmetics and skin products to the women. It is one of the biggest socially responsible companies around the world. Further, the company wants to connect with women.  In addition, the company wants to improve the lives of the women globally (Harris and Dennis, 2011). The other aim of the Avon in China is to accelerate and increase the progress and growth of the company to beat the competitors in the market. Along with this, the company is improving the outcomes and results of the company in such country. The company is producing innovative and attractive beauty and cosmetics products to increase the revenue and profit of the Avon in China. It is the one biggest desired outcomes of the company. It focuses on the needs, desires, expectations, choices, and requirements of the women to maximize the sales of the Avon in such country (Twigg and Majima, 2014).

The Avon core values include belief, integrity, trust, and humility. The core values play a vital and integral role in Avon. The other objective of the company is to provide effective and unique cosmetics and beauty products with high quality in the global market. Further, the company wants to maintain friendly spirit at the workplace to gain sustainability within the organization. Further, the company wants to build and develop a unique and effective portfolio of beauty brands in the China (Julia and Li, 2011). It also wants to beat the competitors in China to gain the long-term benefits around the world. Apart from this, Avon wants to become a unique and attractive destination store for the female customers by providing a unique quality of cosmetics products to them. Further, the company wants to give personal high shopping experience to the customers which will help to create lifelong reciprocal customers relationship around the world. Along with this, Avon is trying to use direct selling in China to gain various competitors opportunities in that country. In addition, it wants to maintain a good working environment for the employees to provide job satisfaction and job security in China. It wants to achieve highest satisfaction level of the female consumers in China by fulfilling their needs and requirements. These are the desired outcomes of the Avon that the company wants to achieve in China. Further, the company is trying to make a good image and goodwill in China by rendering unique and attractive cosmetics and skin products to the women in China (Kim and Ko, 2012).

Avon's Mission, Vision, and Desired Outcomes in China

Apart from this, the company is developing unique and effective strategies which could help to increase and maximize the revenue and profit of the Avon in China. It is trying to maintain a reciprocal relationship with other local cosmetics companies in China to evaluate and measure the plans, policies, and strategies of the competitors (Butler, 2013). Further, it wants to use effective and unique advertisement and promotional strategies to promote and enhance the beauty and skin products in China. Apart from this, the company wants to reduce the inventory level while improving and enhancing the services of the company. The CEO of the company is trying to use effective and unique marketing strategies and policies to attract and retain more consumers in China with maintaining sustainability in the organization as well as the environment.  The company uses social media channels to increase and promote the products and services of the Avon in China (de Melo et al, 2013).

The company also wants to provide satisfaction to the stakeholders by increasing and enhancing the net worth of the shareholders. Apart from this, the company wants to improve the financial position to gain long-term sustainability in China. It will also help to increase the number of buyers in such country (Lundqvist et al, 2013).

SMART goals of the Avon in China: SMART goals of the Avon in China have been discussed below.

Specific: The Company has set specific goals and objectives to attain the long-term mission and vision of the firm in China. The firm wants to earn a profit in such country by providing attractive skin and cosmetics products to the consumers in China.

Measurable: Further, the company set and establishes the criteria for measuring the success and growth of the firm to attain each goal and objective of the firm. The company also measure and evaluate the performance and efficiency of the Chinese employees to accomplish the mission and vision of the firm (Brown and Gillespie, 2016).

Attainable: After identifying the goals and objectives, the company needs to figure out the way through which the Avon can attain these goals and objectives. For this purpose, the firm needs to develop and build attitudes, skills, abilities, and capacity of the workers to reach the target market in the China.

Realistic: A goal and objective can be realistic and high, the company should decide whether the goal and objective high or realistic and it should develop effective and unique strategies in order to attain these goals and objectives. In this way, the company can expand and flourish its business activities and operations in China.

Avon's Core Values, SMART Goals, and Strategies in China

Timely: The Company must complete these goals and objective on timely. It will also help to build and develop a good image in the eyes of Chinese in that country. Through SMART goals, Avon can enhance and increase its business activities and processes in other countries also (Usha, 2016).

Sherilyn S. McCoy is the CEO and Douglas R. Conant is the chairman of the Avon. Various suggestions have been given by the CEO to expand and flourish business activities and operations of the company in China. The company should establish a retail business in China to increase the profit in such country. The company must negotiate with the Chinese government to provide a license to operate and manage direct selling in such country. It will also help to expand and increase its business globally. The company should stop its business activities and operations in China to reduce these key issues in such country. Along with this, the company must negotiate with the US government to resolve these key issues and challenges. China is one of the biggest markets around the world to gain revenue and profit. It should focus on the plans, policies, and strategies of the competitors in the China. Further, the firm must evaluate and focus on the manufacturing plant in China to improve and enhance the productivity and efficiency in China (Brown and Gillespie, 2016).

In addition, the company must provide training and development coaching to the Chinese employees to measure and evaluate the performance and efficiency of the workers. It will also help to meet its long-term targets and goals within the organization. Avon must analyze and evaluate the needs, requirements, and desires of the Chinese because they are different from other countries people (Lundqvist et al, 2013). Therefore, the company needs to take care the choices of the Chinese. It should use effective and unique promotional and advertisement strategies to attract more female consumers in China. It is the good source to increase and raise revenue and profit in such country. Along with this, the company launches and conducts some seminars and programs to increase the number of consumers in such country. In addition, it should also use loyalty programs to attain success and growth in the global market. Avon should also use a business level and corporate level strategies to maximize and increase the profit of the firm (Issa, Maguid and AlMazroua, 2016).

Recommendations for Avon's Future Expansion and Growth in China

Apart from this, the company must evaluate the strengths and opportunities of the competitors to fulfill the mission and objectives in near future. Avon should focus and evaluate the macro environment to control and manage the risks of the markets around the world. It must measure and evaluate the external environmental factors to beat and overcome on the competitors in China (Daniluk, 2016). The company should start online marketing to promote the cosmetics and skin products in such country. In this way, the company can provide satisfaction and morale to consumers around the world. Along with this, it must maintain a reciprocal and cordial relationship with customers to increase the demand for the cosmetics and beauty products around the world. It should use the natural raw material to produce new and innovative cosmetic products in China. Along with this, SWOT analysis must be done by the company to evaluate and measure the threats and opportunities of the competitors in China. Marketing plays a vital and integral role to promote the cosmetics and fashion products in China. PESTLE and porter five forces analysis should be done to measure the competitive strengths and weaknesses in China. In addition, if the company wants to expand its business activities in China then it should provide free beauty classes to the customers. It will also help to attract more consumers in the market. Further, loyalty programs also help to develop and build a reciprocal relationship with their consumers in the world. In addition, the company must produce innovative and new cosmetics and skin products (Issa, Maguid and AlMazroua, 2016).

The company must appoint marketing team to increase the revenue of the company in China. In addition, Avon must use intensive growth strategy to maximize the growth in the Chinese market. Further, the company must focus on the complementary services to the Avon. Apart from this, the company must focus on the online advertisement to enhance the products and services of the company (Maurino et al, 2017). The company must monitor the women beauty products to attract more female in China. Women are the foremost and important consumers of the Avon beauty and cosmetic company. In addition, the company must maintain a sustainable human resource management to make the effective and unique policies and rules of the company in such country. In this way, the company can carry the business activities smoothly in such country. In addition, Avon should use effective and unique distribution strategies and processes to differentiate its products and services from the competitor’s products and services. Further, the firm must hire female employees to provide information to the female customers in China because they can easily understand and evaluate the needs and requirements of the female consumers in such country (Issa, Maguid and AlMazroua, 2016).

Avon must promote the potential and skilled employees for doing work effectively and efficiently in China. The company should test the cosmetics and skin products before selling it to the consumers in the market. It will help to reduce and prevent the harmful effect of these products and services (Jaiswal and Gupta, 2015). In this way, the company can also become an effective and unique identity in China. CEO must make effective and excellent rules, policies and processes to increase the revenue and profit in the China. The company must monitor and measure on the risks and challenges of the future to secure and protect the business of the company in China. In this way, the company can improve its process and procedure to gain long-term advantages in the global market. In addition, the company should focus on the rules and regulation which have been made the Chinese government expand its business in such country. Furthermore, the company must focus on the middle level of consumers to attract more female in that country (Jaiswal and Gupta, 2015). Avon must set the reasonable and appropriate prices to overcome on the local competitors in China. Along with this, the company should focus on the key issues which have been faced by the Avon in China. The company should use 7Ps components to accomplish the long-term targets of the firm in such country. In addition, the company should provide reasonable remuneration and incentives to the potential and efficient employees (Cervellon and Carey, 2011). The company must focus on the market to introduce new products and services in the China. It should use social media channels to reach its target audience in such country. It should focus on the culture and values of the China to produce the cosmetics and beauty products. Apart from this, Avon should focus on the market penetration and market development strategies to increase the women customers globally.

Conclusion

The report is based on the business activities and operations of the Avon. Avon is producing wide range of cosmetics and personal care products for women as well as men around the world. On the above discussion, it has been concluded that Avon is one of the biggest players in cosmetics and beauty products industry. Various key issues and challenges are faced by the Avon in China while operating and managing business activities and operations in China due to strict rules and regulations are imposed by the government.  Furthermore, various recommendations have been given to the Avon to run the business activities and operations successfully in such country. Porter five forces model should be used by the company to evaluate and measure the position of the competitors in China.

In addition, SMART goals and objectives should be set by the company to attain and meet long-term mission and vision of the firm. It should focus on the marketing mix strategies to attain success and growth in the market. It must focus on the market segmentation, targeting and positioning strategies to divide its products into different segments in the Chinese market. Along with this, effective and unique models must be developed by the Avon to attract and retain more female consumers globally. Avon must maintain sustainability in the environment as well as the organization. It will also help to provide social, environmental and economic benefits to the stakeholders.  In this way, the company can increase and expand its business smoothly in China.

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