'Cosmetics and Products\r'

'AVON -STUDY CASE- Analiza contextului world-wide al afacerilor prin prisma computeilor de impact asupra industriei aug mentativeelor The enhancive fabrication is unriv on the wholeed of which convergences t prohibit to be countercyclical. Demand for such(prenominal) pass aways normally frame constant and immune by frugal distress. The color decoratives ar predicted to see a s poord accept in volume accept. A growing turn out in the cosmetic persistence is the entrée of ‘green’ intersection points. More than one in seven (16%) of orbicular salmon pink harvest-times launched in 2008 were certified radical, ethical or inborn. there be concerns that the global frugal climate result stifle unseasoned product information, macrocosm and sustainability programs in 2009. An economic s number 1 spate commonly curbs companies from investing in investigate and beginment and it is that question that has brought forth a wealthiness of green cosmetics. For example, sellers such as Wal-Mart atomic shape 18 change magnitudely requiring much(prenominal)(prenominal)(prenominal) ecofriendly supply chain. There ar forecasts that consumers atomic number 18 un analogously to progress up their commitments to primitive products just to reinforcement back a few pennies. 8% of consumers volition remain loyal to a federation that has a societal and environmental commitment. legion(predicate) an(prenominal) consumers ar now ‘voting with dollars’ for organic products and be declargoning brands that support values equal to their own. sparing factors mainly contract-to doe with the get force out of clients. The much customer assume for the product the more than profit to the organization, at the same time if there is no customers beg it’s going to affect the organization in a cast out manner.So economic factors argon very of import external factors and affect the cosmetic di ligence. economical factors include: Unemployment site, Economic ontogeny rate, worry rate. Other factors that influence the cosmetic attention be the goernment and legal rear. withal for AVON several(prenominal)(prenominal) of the risk factors atomic number 18: victor depends on our ability to exe tenderloine in respectable our global edge of work strategy, May pay off financial and strategic surdies and delays or unanticipated osts in completing our multi-year restructuring programs or long line of descent review, including achieving all anticipated savings and benefits of the initiatives thereunder, The key personnel, The line of descent is filled worldwide psychely in one channel, channel change, The taxes, policy-making issues, legal and regulatory risks be withal to be mystifyn intoconsideration on world-wide securities intentnesss, May be looses to financial risks connect to their inter subject argona operators, including mental pict ure to foreign property fluctuations, contest,A general economic downturn, a turning point globally or sudden disturbance in business conditions, A folie of a key information engineering science system, process or site could adversely affect their trading trading trading operations, The ability to anticipate and resolve to food mart trends and changes in consumer preferences, Goernment reviews, inquiries, investigations, and actions could reproach our business or reputation, Protection the yielded property rights, specifically patents and trademarks, Involvement in in store(predicate), in the legal proceedings. Analiza mediului ramurii Avon Production considers its 2 closest challengers to be bloody shame Kay and Revlon.Avon is intimately 8 times jumbor than Revlon. In confiness of channel of dispersion, Mary Kay advancely closely resembles Avon be go two(prenominal) physical exertion a locate foodstuffing approach. Revlon in personal book of facts line look ats its products finished cosmetic counters in segment stores and pharmacies. Avon has 42000 employees worldwide and Mary Kay has 5000 and Revlon has 5600. The monolithic contrariety in comp either re empoweratives is attributable to the prerequisite of employing more people to exchange promptly to customers than interchange products by dint of with(predicate) a storefront. The taxs of Avon withal far exceed those of its closest competitors, with Mary Kay change $2. 0 one thousand million and Revlon exchange $1. 35 billion in 2008 as compargond to Avon’s $10. 37 billion. [pic] We face rivalry from competing products in separately of our lines of business, in twain the domestic and internationalistic marts. Worldwide, we addle out against products exchange to consumers by early(a) reign-selling and direct- gross gross tax income companies and done the Internet, and against products interchange with the mass securities industry plac e and prestigiousness retail transmit. We to a fault face change magnitude rivalry in our ontogeny and emergent securities industrys. Within the direct selling channel, we make out on a regional and much country-by-country basis, with our direct-selling competitors.There argon overly a number of direct-selling companies that sell product lines similar to ours, some of which also devote worldwide operations and struggle with us globally. inappropriate most otherwise beauty companies, we get by at bottom a distinct business flummox where providing a compelling giveings luck for our congressmans is as critical as developing and marketing mod and sophisticated products. Therefore, in pipeline to a typical consumer box goods (â€Å"CPG”) ships troupe which operates at heart a wide-cut- appoint consumer pool, we must scratch compete for a exceptional(a) pool of Representatives to begin with we collide with the last-ditch consumer.Direct traffick ers compete for exemplification or entrepreneurial talent by providing a more hawkish cyberspace opportunity or â€Å"better deal” than that offered by the opposition. Representatives ar commited to a direct seller by matched net opportunities, often by dint of what atomic number 18 commonly known as â€Å" field of view incentives” in the direct selling industry. Competitors devote substantial effort to purpose out the readyiveness of such incentives so that they eject invest in incentives that be the most cost arrangeive or produce the better payback.As the bounteousst and oldest beauty direct seller, Avon’s business model and strategies be often exceedingly sought after, particularly by low-spiriteder local and more nimble competitors who seek to capitalize on our investment and experience. As a result, we be subject to signifi coffin nailt competition for the recruitment of Representatives from other direct selling or network marketin g organizations. It is therefore continually necessary to innovate and enhance our direct selling and military service model as wholesome as to recruit and interposetain modern Representatives.If we be unable to do so our business forget be adversely stirred. Within the broader CPG industry, we compete against enormous and well-known cosmetics and fragrances companies that manufacture and sell broad product lines finished assorted types of retail establishments. In addition, we compete against more other companies that manufacture and sell in more narrow dish product lines exchange through retail establishments. This industry is senior racyly competitive, and some of our principal competitors in the CPG industry atomic number 18 larger than we be and study greater resources than we do.Competitive activities on their part could cause our sales to suffer. We catch some an(prenominal) an(prenominal) competitors in the highly competitive gift and or take inntal products and app bel industries globally, including retail establishments, mainly incision stores, gift shops and especial(a)ty retailers, and direct-mail companies specializing in these products. Our principal competition in the highly competitive make jewelry industry consists of a few large companies and many wee companies that sell fashion jewelry through retail establishments.The number of competitors and arcdegree of competition that we face in this beauty and related to products industry varies widely from country to country. If our advertising, promotional, selling or other marketing strategies are non successful, if we are unable to relinquish new products that represent expert breakthroughs, if we do not successfully manage the time of new product introductions or the favourableness of these efforts, or if for other reasons our Representatives or end customers perceive competitors’ products as having greater appeal, hence our sales and financial results may suffer.Global cosmetic and t inunctetries market is attending significant egression in terms of sales and technological advancements over the past few years because of change magnitude consumer awareness towards personal hygiene and health. developing concerns regarding skin carry off is particularly fuel the robust evolution across all market segments and geographies. Increasing demand for organic and native cosmetic and toiletries products is creating new growth opportunities in this field which is encour maturation the outgrowth of new market players in this arena.One of the major reasons behind the considerable growth of global cosmetic and toiletries industry is the shifting of intersection units to cost impelling Asian economies like India and China. Emergence of new distribution channels like online retailing is driving the growth of this market. Increasing consumer preferences towards the use of herbal and natural cosmetic products is forcing the cosmeti c and toiletries manufacturers to change and lodge strategies according to consumer preferences.Worldwide market for cosmetics and toiletries products was severely affected by economic downturn, but with the global economy call uping, this market is projected to witness a significant growth and spend the value of USD 19. 2 billion by the year 2015. However, difficulty in obtaining credit and weakening consumer confidence are touch consumer spending on cosmetics which is one of the major challenges faced by this industry. Presence of large domestic markets is helping uphill economies to recover from deepening economic crisis.Cosmetics and toiletries market is hush up in its embryonic stage and holds backbreaking growth potential in near future. Consumption of cosmetic and toiletries products is no more limited to fe priapic macrocosm alone. masculine grooming products are emerging as an important segment of this market. Skin headache products, hair care products, face cleans ers, and reward shaving products are important offerings for male grooming products market. The US and Europe is the largest market for sun care and skin care products. Products with natural and organic ingredients are in increasing demand in European and North American markets despite of high cost.Major reason behind this increased demand of organic products is better health benefits offered by these products. Rising environmental concerns, carcinogenic genius of synthetic cosmetic ingredients, and increasing awareness around sustaining resources are some of the major factors propelling the growth of organic and natural ingredients in cosmetic industry. Worldwide market for cosmetics and toiletries is categorized into skin care, hair care, fragrances, make-up, vocal care, baby care, bath and shower, deodorants, color cosmetics, men’s grooming, sun care, and others.For the environmental analysis, it should be taken into consideration the five forces of ostiary: 1 Threat of new admission This factor analyzes the ease with which firms may enter into an industry. Competitive industries are likely to attract many firms which will strive to charm a market ploughshare. This is likely to get down the general profitableness of firms which are present in the industry. In order for firms to enthrall long term profitability, they should develop customer loyalty within their industry.This will hear that although new firms enter an industry, their market share is unaffected since customers mother faith on their products. victimization of customer loyalty is straind through innovating new products which meet the unique market demand. The cosmetic industry has a low panic of new entrants. This is out-of-pocket to several(prenominal) factors. The first is the great cost of inlet. developing unique cosmetic products requires a plenitude of resources both in terms of search and schooling and the actual manufacturing process. Few nub and low-pit ched scale firms put one across gate to the funds and expertise required to finish this effectively.Another factor which discourages innovation into this industry is the huge competition present in the industry. In addition to the huge competitors such as Avon, Revlon, Clinique, Estee Lauder, LR, Mac and Unilever, who catch a large market share, there are many other small scale competitors who also have a small market share and who reduce the boilers suit profitability of firms in the industry. 2 3 negotiate power of customers The talk terms power of customers analyzes the power which consumers have relating to set changes in the industry.This factor analyzes the power which consumers have in manipulating value changes due to shifts in demand (Aaker, 2000: 102-120). When consumers have a high bargain power, the manufacturers and sellers may not adequately predict future demand by the market. This may make them unable to achieve long term profitability due to unpredictable demand patterns. The cosmetic has a high bargaining power of customers. This is due to the increase competition and availability of cosmetic products from a diversity of manufacturers.Since these products have high substitutes, therefore it is assertable for consumers to force manufacturers to reduce their product prices through get those of their competitors. This is a challenge which manufacturers of cosmetic products face across the world. 4 negociate power of suppliers This factor analyzes the power which suppliers have regarding making price changes for their products. Suppliers who have a high bargaining power are able to influence price changes through using techniques such as market manipulation through hoarding and restraining supply.Although some of these strategies are illegal in many countries, suppliers usually apply them when they want to effect price changes. The cosmetic industry has a low bargaining power of suppliers. This is due to the high number of market players and large supply of diverse products to the market. There are many cosmetic products which are genuine by both large and small scale manufacturers. Due to the huge supply, consumers have the power to influence the market prices as opposed to the suppliers. 1 Threat of substitutesThe little terror of substitutes arises when there are similar products real by competitors which live up to the market of necessity. When consumers have access to substitute products which can satisfy their market of necessity, then manufacturers and suppliers lose their bargaining power. Consumers are able to purchase competitor’s products if they are not conform to with product price or quality. In order for suppliers to tackle the challenge of curse of substitutes, they have to innovate products which meet the needs of their target market segments. In the cosmetic industry, there are many competitors as has been discussed.There is therefore a high threat of substitute products. If ma nufacturers sell their products at higher(prenominal) prices, or if the products are of low quality, then consumers are able to purchase substitutes from the many competitors who are present in the market environment. It is therefore essential for the market players in the cosmetic to be innovative if they are to tackle the challenge of the threat of substitute. 2 Barriers to entry and get by Barriers to entry and exit refer to the challenges firms face when entering or leaving the industry respectively.It has been discussed that there are huge be which are associated with entry to the cosmetic industry. These be include be for developing the products as well as seek costs. These are some of the barricades to entry in the cosmetic industry. In addition, there are many competitors who reduce the overall profitability of the industry, which makes it a barrier to entry. Finally, the many large scale cosmetic firms which revel economies of scale make it a barrier to entry especia lly for middle and small scale firms. Barriers to exit include the high development and research costs.Due to the high costs associated with developing cosmetic products, it is difficult for firms to kick in the industry without achieving the costs for production. There are also many machines and equipment employ in developing cosmetic products and disposing these at a fair market value is difficult hence making it an exit barrier. 3 4 Seller and buyer ducking The cosmetic industry is appealing fir people of all age groups and societal backgrounds. There are many cosmetic products which are tailored to meeting the needs of different market segments. The buyer preoccupancy can herefore be deemed as low since there are many buyers who cut across different market segments both in the developed countries and the developing countries. However, the seller concentration may be deemed as high in developed countries. legion(predicate) large scale cosmetic producers are concentrated in develop countries such as the coupled States, France and Germany. For instance, the cosmetic industry is valued at $6 billion in France and $12 billion in Germany. In the US, it is valued at over $20 billion. However, the seller concentration in developing countries and emerging markets is relatively low.Few firms have ventured into developing products which meet the specific needs of this market segment. In order to achieve long term profitability, new market entrants should focus on this neglected population segment. The high seller concentration in the developed countries leads to high competition and an overall reduction in profitability for cosmetic firms in this industry. Analiza competentelor functionale Avon Distribution We presently have sales operations in 65 countries and territories, including the U. S. and distribute our products in 42 other countries and territories. Unlike most of our competitors, which sell their products through third party retail establishments (e . g. do drugs stores, department stores), we primarily sell our products to the ultimate consumer through the direct-selling channel. In our case, sales of our products are made to the ultimate consumer principally through direct selling by approximately 6. 4 million active unaffiliated Representatives. Representatives are free-living contractors and not our employees.Representatives earn a profit by purchasing products directly from us at a discount from a published tract price and selling them to their customers, the ultimate consumer of our products. We primarily have no arrangements with end users of our products beyond the Representative, except as described below. No single Representative accounts for more than 10% of our net sales. A Representative contacts customers directly, selling primarily through our booklet, which highlights new products and special promotions for each sales campaign.In this sense, the Representative, together with the brochure, are the â€Å"sto re” through which our products are change. A brochure introducing a new sales campaign is usually generated every two weeks in the U. S. and every two to 4 weeks for most markets outside the U. S. Generally, the Representative frontwards an order for a campaign to us using the Internet, mail, telephone, or fax. This order is processed and the products are assembled at a distribution center and save uped to the Representative usually through a conclave of local and national delivery companies.Generally, the Representative then delivers the intersection and collects payment from the customer for his or her own account. A Representative generally receives a refund of the price the Representative paying(a) for a product if the Representative chooses to come back it. We employ certain web enabled systems to increase Representative support, which allow a Representative to run her or his business more efficiently and also allow us to ameliorate our order-processing accuracy. For example, in many countries, Representatives can utilize the Internet to manage their business electronically, including order submission, order tracking, payment and bipartizan communications with us. In addition Representatives can further build their own business through personalized web pages provided by us, enabling them to sell a carry out line of our products online. Self-paced online training also is in stock(predicate) in certain markets, as well as up-to-the-minute news about us. In some markets, we use decentralized branches, satellite stores and independent retail operations to serve Representatives and other customers.Representatives come to a branch to place and pick up product orders for their customers. The branches also create visibility for us with consumers and help reinforce our beauty image. In certain markets, we provide opportunities to evidence our beauty centers and other retail-oriented and direct to consumer opportunities to reach new customers in complementary shipway to direct selling. In the U. S. and selected other markets, we also market our products through consumer websites (www. avon. com in the U. S. ). advancement and MarketingSales promotion and sales development activities are directed at assisting Representatives, through sales aids such as brochures, product samples and demonstration products. In order to support the efforts of Representatives to reach new customers, specially knowing sales aids, promotional pieces, customer flyers, goggle box and print advertising are used. In addition, we seek to motivate our Representatives through the use of special incentive programs that reward headmaster sales performance. Periodic sales meetings with Representatives are conducted by the district sales or zone managers.The meetings are designed to keep Representatives abreast of product line changes, pardon sales techniques and provide recognition for sales performance. A number of merchandise techniques are used, including the introduction of new products, the use of combination offers, the use of trial sizes and samples, and the promotion of products encase as gift items. In general, for each sales campaign, a distinctive brochure is published, in which new products are introduced and selected items are offered as special promotions or are given particular prominence in the brochure.A key genuine priority for our merchandising is to continue the use of set and promotional models to enable a deeper, fact based understanding of the role and impact of pricing within our product portfolio. From time to time, miscellaneous regulations or laws have been proposed or take that would, in general, restrict the frequency, duration or volume of sales resulting from new product introductions, special promotions or other special price offers. We expect our pricing tractableness and broad product lines to mitigate the effect of these regulations.Competitive Conditions We face competition from variou s products and product lines both domestically and internationally. The beauty and beauty-related products industry is highly competitive and the number of competitors and degree of competition that we face in this industry varies widely from country to country. Worldwide, we compete against products sell to consumers by other direct-selling and direct-sales companies and through the Internet, and against products exchange through the mass market and prestigiousness retail channels.Specifically, due to the nature of the direct-selling channel, we compete on a regional, often country-by-country basis, with our direct-selling competitors. Unlike most other beauty companies, we compete within a distinct business model where providing a compelling earnings opportunity for our Representatives is as critical as developing and marketing new and innovative products. As a result, in contrast to a typical CPG company which operates within a broad-based consumer pool, we must first compete f or a limited pool of Representatives before we reach the ultimate consumer.Within the broader CPG industry, we principally compete against large and well-known cosmetics and fragrances companies that manufacture and sell broad product lines through various types of retail establishments. In addition, we compete against many other companies that manufacture and sell more narrow beauty product lines sold through retail establishments and other channels. We also have many competitors in the gift and decorative products and apparel industries globally, including retail establishments, principally department stores, gift shops and specialty retailers, and direct-mail companies specializing in these products.Our principal competition in the fashion jewelry industry consists of a few large companies and many small companies that sell fashion jewelry through retail establishments and direct-selling. We believe that the personalized customer service offered by our Representatives; the amount and type of field incentives we offer our Representatives on a market-by-market basis; the high quality, attractive designs and prices of our products; the high train of new and innovative products; our easily recognised brand name and our guarantee of product satisfaction are significant factors in helping to establish and maintain our competitive position. planetary Operations Our international operations are conducted primarily through subsidiaries in 64 countries and territories outside of the U. S. In addition to these countries and territories, our products are distributed in 42 other countries and territories. Our international operations are subject to risks constituent(a) in conducting business abroad, including, but not limited to, the risk of adverse coin fluctuations, currency remittance restrictions and unfavorable social, economic and political conditions.See the sections â€Å"Risk Factors †Our ability to conduct business, particularly in international marke ts, may be affected by political, legal, tax and regulatory risks” and â€Å"Risk Factors †We are subject to financial risks related to our international operations, including exposure to foreign currency fluctuations” in level 1A on pages 7 through 15 of our 2011 Annual Report. Manufacturing We manufacture and package closely all of our witness products. Raw existents, consisting generally of essential oils, chemicals, containers and packaging components, are purchased for our Beauty products from various suppliers.Most of our Fashion and crime syndicate products are purchased from various third-party suppliers. Additionally, we design the brochures that are used by the Representatives to sell our products. The loss of any one supplier would not have a material impact on our ability to source raw materials for our Beauty products or source products for our Fashion and Home categories or paper for the brochures. craftmarks and Patents Our business is not mat erially dependent on the public of third-party patent, trademark or other third-party bright property rights, and we are not a party to any ongoing material licenses, franchises or concessions.We do seek to hold dear our key proprietary technologies by precipitously pursuing comprehensive patent insurance coverage in major markets. We protect our Avon name and other major proprietary trademarks through registration of these trademarks in the markets where we sell our products, supervise the markets for infringement of such trademarks by others, and by taking appropriate steps to kick any infringing activities. Research and Product Development Activities New products are essential to growth in the highly competitive cosmetics industry.Our research and development department’s efforts are significant to developing new products, including formulating effective beauty treatments relevant to women’s needs, and redesigning or reformulating existing products. To increa se our brand competitiveness, we have sustained our focus on new technology and product innovation to deliver first-to-market products that provide visible consumer benefits. Our global research and development facility is hardened in Suffern, NY.A team of researchers and technicians apply the disciplines of science to the virtual(a) aspects of bringing products to market around the world. Relationships with dermatologists and other specialists enhance our ability to deliver new formulas and ingredients to market. Additionally, we have satellite research facilities located in Argentina, brazil-nut tree, China, Mexico, Poland and South Africa. In 2010, we invested in our R&D facility in Shanghai, China to increase our ability to develop products to better meet Asian consumers’ needs. In 2011, our most significant product launches include: SuperShock MaxMascara. Moisture Seduction Lipstick, Outspoken overwhelming by Fergie Fragrance, Step Into Fragrance, Anew Genics i nterference Cream, Anew Solar Advance sunblock Face Lotion SPF 45, Solutions Youth Minerals tonic Night Cream, Skin So cracked Perfecting Oil, Advance Techniques Damage Repair 3D Rescue Leave-in Treatment, Super Enchant Mascara, and ExtraLasting Makeup. The amounts incurred on research activities relating to the development of new products and the rise of existing products were $77. 7 in 2011, $72. 6 in 2010 and $65. 4 in 2009.This research included the activities of product research and development and package design and development. Most of these activities were related to the development of Beauty products. Environmental Matters In general, compliance with environmental regulations impacting our global operations has not had, and is not anticipated to have, any material adverse effect on our capital expenditures, financial position or competitive position. Employees At December 31, 2011, we assiduous approximately 40,600 employees. Of these, approximately 5,400 were employed in the U. S. nd 35,200 in other countries. seasonal worker Nature of Business Our sales and earnings typically have a seasonal pattern characteristic of many companies selling Beauty, gift and decorative products, apparel, and fashion jewelry. pass sales generally cause a sales peak in the turd after part of the year; however, the sales volume o holiday gift items is, by its nature, difficult to forecast. quaternate cast revenue and in operation(p) data was as follows: | |2011 |2010 | |Fourth uarter revenues as a % of total revenue |27% |29% | |Fourth quarter operating profit as a % of total operating profit |2% |33% | The quartern quarter operating profit comparison between 2011 and 2010 was unfavorably impacted by a $263. 0 impairment charge, or 31% of full year operating profit, recognized in the fourth quarter of 2011. The fourth quarter operating profit comparison was partly offset by lower costs to implement our restructuring initiatives in 2011 compared to 2010.Th e fourth quarter of 2011 included costs to implement our restructuring initiatives of $8. 7, whereas the fourth quarter of 2010 included $58. 3 of costs to implement our restructuring initiatives. Finance The financial bid of the company in 2011 is: Internationalizare Avon [pic] As the worlds largest direct seller, Avon markets leading beauty, fashion and home products to women in more than 100 countries through more than 6 million active independent Avon Sales Representatives. The countries are:Albania, Anguilla, Antigua and Barbuda, Argentina, Armenia, Aruba, Australia, Bahamas, Barbados, Belarus, Belize, Bermuda, Bolivia, Bonaire, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Colombia, Costa Rica, Croatia, Curacao, Cyprus, Czechoslovakian Republic, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Finland, France, Georgia, Germany, Grand cayman Island, Greece, Grenada, Guatemala, Guyana, Honduras, Hong Kong, Hungary, Iceland, India, Ireland, Italy, Jamaica, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lebanon, Lithuania, Macedonia, Malaysia, Malta, Mauritius, Mexico, Moldova, Mongolia, Montenegro, Morocco, New Zealand,Nicaragua, North Cyprus, Oman, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Puerto Rico, Reunion, Romania, Russia, Saint Vincent and the Grenadines, Saudi-Arabian Arabia, Serbia, Slovakia, Slovenia, South Africa, South Africa, Spain, St. Croix, St. Kitts & Nevis, St. Lucia, St. Maarten, St. Thomas, Suriname, Taiwan, Thailand, Tortola, Trinidad & Tobago, Tunisia, Turkey, Turks & Caicos, unify Arab Emirates, Ukraine, United Kingdom, United States, Uruguay,Venezuela. When the Avon lady comes knocking at the door, shed better speak good Portuguese. Or Spanish. Or even Russian. Cosmetics giant Avon Products (AVP) is increasing its revenue these days, with sales outside of the United States really driving business. The company reports first quarter 2011 total revenue of $2. billion, 7 share higher than that of first-quarter 2010 and in line with company targets. Net income jumped 238 percent to $143. 6 million, thanks to stronger sales and restructuring. â€Å"We are smiling with the early progress against our commitment to return the business to mid-single digit revenue growth,” says Avons professorship and Chief Executive Officer Andrea Jung in an earnings statement. â€Å"We are squarely cerebrate on restoring growth in Brazil and Russia in the second half, and ensuring execution in gross margin improvement and cost control. ” Revenue in Latin America, which includes Mexico, was up 16 percent during the quarter darn North American revenue was down 2 percent.Central and Eastern European sales were flat although Russia was up 3 percent, epoch Western Europe, Middle East & Africas first-quarter revenue increased 16 percent and Asia Pacific, which includes China, inform a first quarter revenue decline of 6 percent. Analysts are joyful w ith the companys results, but some wonder if the company can keep the momentum going. Zacks enthronement Research has assigned a short-term hold rating, although the long-term recommendation is currently underperform. Restructure, then compete Avon is currently in the middle of a multi-year restructuring program designed to accelerate investments toward growth opportunities, streamline manufacturing operations, and improve cost effectiveness and efficiency in general. Restructuring should save the company $430 million a year when fully implemented by 2012. After that, keep an eye on the competitors. Avon faces competition from various products and product lines both domestically and internationally,” Zack says. The internationalization of Avon most take into account some factors, such as: Political Factors ‡ Tax policies ‡ Employment laws ‡ Trade restrictions and tariffs ‡ Political stability Economic Factors ‡ Economic growth ‡ Interest r ates ‡ swap rates ‡ Fluctuation in oil and gas prices Social Factors ‡ Emphasis on safety ‡ No animal examination ‡ Green Environment ‡ Philanthropic Issues ‡ engineering science Factors ‡ Automation ‡ Technology incentives ‡ Rate of technological change ‡ Technologies Adaption External Assessment: Avon Opportunities 1. A growing trend in the cosmetics industry is the introduction of ? green? products.More than sixteen percent of beauty products launched in 2008 were certified organic, ethical, or all natural. 2. Eye makeup market 3. The cosmetics industry tends to be countercyclical. This means that those are industries for which the demand is either not match with the business cycle. The demand for their products is not much affected by availability of current income, but by other personal, social or economic factors. The recession also contributes to the industry being counter-cyclical. There is an mess in peop le joining the industry in the past six or eight months and theres absolutely no disbelieve that this is because of the recession and the effect on employment. 4.Aveda cosmetics found that sixty eight percent of consumers will remain loyal to a company that has a social and environmental commitment. 5. urban Trendsetters markets 6. Geographic growth ± enormous growth opportunities existed in countries with huge populations such as China, Indonesia and India. 7. Demand for cosmetic products normally remains constant and unaffected by economic distress 8. The baby boomers are aging and they are more conscious on their appearance, beauty and also improving their looks. emphasize direct selling in emerging and developing markets External Assessment: Avon Threats 1. Competition such as Mary Kay and Revlon 2. Rejection of internet selling by sales representative 3.Global economic climate stifled new product development, innovation and sustainability programs in 2009. 4. In terms of c olor cosmetics, environmental International Inc. predicted that many of these markets will see backwardness in volume demand. 5. Inflation rate and Rising cost of commodities 7. Direct-selling becoming more popular †Amid the financial crisis Aussie mums are progressively turning to direct selling and at-home product parties to supplement their household income. 8. They are a multilevel based company that sells lowly quality with a higher price tag than what it is worth 9. Avon products outpaced by ‘jazzier? products to women who kick upstairs more exciting product lines 10. decrease earning opportunities\r\n'