Andrea Jung's Makeover of Avon Products Inc

Andrea Jung's Makeover of Avon Products, Inc.

Summary: Avon Products, Inc. (Avon) is based I New York. The firm engages in the manufacture and marketing of beauty and complimentary products primarily in North America, Latin America, Europe and Asia Pacific. Avon's Products are classified into three products categories: Beauty, Beauty Plus and Beyon Beauty. The Beauty category consists of cosmetics, fragrances, skin care and toiletries. Beauty Plus includes fashion jewelry, watches, apparel and accessories and Beyond Beauty comprises home products, gifts and decorative products, candles and toys. The company sells and markets its products through a combination of direct selling, marketing by independent Avon representative and via its consumer Web site, avon.com.

On Andrea Jung's commencement as CEO in 1999 she faced a number of strategic problems at Avon - there was no superior strategy for the company to initiate and thus no competent implementation and execution of this strategy. This leads to a number of symptoms such as poor image, slow growth and a decline in sales, which was a direct link to a vague strategic vision, lack of innovative technology and lock of leadership. With a new strategic vision implemented by Jung, Avon was able to move into the 21st Century with a clear view to compete with other Cosmetic, Fragrances and Toiletries (CFT) companies in the same industry.

Question No.1: What is your assessment of Andrea Jung's Performance as Chief Strategist at Avon Products? What has she done well? What overall grade would you give Andrea Jung for the job she has done as CEO?:

Andrea Jung was very strong as chief stragiest of Avon Products. She never feared to make any drastic change that could help drive Avon back to the top of Cosmetic, Fragnance & Toiletry Industry. She knew that serious issues were present & the company need to address them. These issues includes

* Product appeal

* Marketing strategy

* Pricing

* Process reengineering

* Product innovation/employee motivation

Her strategy plan was to fix these problems by fixing the entire company structure, which included changing the product packaging for better appeal to changing the distrubtion channel which was a major asset to Avon.

After reading the case study, I felt that Andrea Jung performed well in her duties to help Avon move back to the top of cosmetics chain. She knew what needed to be done and did it, which is must to be an excellent CEO. I would grade Andrea Jung's performance with an A, she developed an excellent strategy that helped push sales from 1.5% in 1999 to 6% in 2001. Its sales force was expected to expand by 15%, operating profit were expected to grow by 7% & operating margin were expected to reach the highest level in over a decade at 14%. Her first task, after becoming the CEO was to hit the streets of neighborhood, rining door bell to better understand the desires of customers and needs of sales agents.

Andrea's ability to unhesitatingly make bold decisions like cutting 40% of company catalog items & dismissing the company's advertising agency which made her standout & landed her the position of president. At age 40, Jung became CEO and in 2001, at age 42, she was listed 4th on Fortune's ranking of the 50 Most Powerfull Women in American Business. In October 2004, Andrea Jung the chairperson and CEO of Avon Products, was listed at the third position on Fortune Magazine. It was the fourth time that Jung had features in this list and analysts said the honor was well deserved. Under her leadership, Avon's image in the market changed from "frumpy" to "fashionable".

Jung's parents expected committement & determination from Andrea & her younger brother from early ages. In an October 2001 interview with a Fortune journalist, Jung suggested that her parents expectations for excellance contributed greatly to her successful career. She recalled an incident from her childhoold whens she asked her parents to by her a set of 120 color pencils. Her parent made her bargain with her & promised to buy it only if she could get grade A in all the subject at the end of the year. She didicated all her to time for studies just to get a color pencil from her parents.

Key tips from Andrew Jung:

* In difficult times, communication is key to maintainging employee morale.

* Leaders must reinvent themselves regularly. Fire yourself on Friday and come in on Monday as if it were Day1.

* Conserve cash when it does not hurt market share

* Resist making acquisitions due to fire sale prices. Make certain of strategic rationale.

* Prepare for a fundamental shift in consumer spending and an economy that may not grow for years.

Question No.2: What is Andrea Jung's strategic vision for Avon? Do you approve of the company's new strategic direction? Why was it time for Avon to fundamentaly change direction?:

Under Jung, Avon Vision statement read as "Our vision is to be the company that best understands and satisfied the product, service and selfulfillment needs of woman globally. Our dedication to supporting women touches not only beauty - but health, fitness, self empowerment and financial independence"

I think their new strategy direction made sense. She knew products had to be made to fill the needs of different age group & races. It wa time for Avon to become more modern and up to date. Jung's view of new Avon was that of a company beyond selling cosmetics as trusted products which is needed by any woman. She was in customer convenient strategy in beauty and financial services. She insisted that supporting women touches not only beauty, but health, fitness, self empowerment and most important financial independence.

Yes, Avon's new strategic direction would launch an entirely new line of business, the development of innovative products, new packing, new channels to the distribution, a new approach to supply chain management, new sales models and new approach to image building.

This is the company that puts mascara on lashes and food on tables, that fights wrinkles with one hand and Breast