SWOT Analysis. Avon - Case Study Example

?SWOT Analysis Table of Contents SWOT Analysis of Avon 3 A. SWOT Matrix 3 B. Strategic Options Based Upon SWOT Analysis 8 C. Options by Priority 9 Recommendations 9 Bibliography 10 SWOT Analysis of Avon Avon has been a world renowned manufacturer and marketer of cosmetic products for more than 100 years. In its long journey the company has gained many opportunities and developed its strengths substantially despite various threats and weaknesses. Especially in its operations during the early 2000s, the company witnessed many such factors which strongly influenced its strategic outlook. Few of the major strengths, weaknesses, opportunities, and threats existing in the then market will be analyzed below: A. SWOT Matrix Strength The company had a wide range of products to be marketed, from skin care to fragrances for both men and women It had a market coverage in 137 countries and marketed its products with the assistance of over 3 million sales representatives Most of the marketing strategies were directed towards the young generation which was termed as the most potential market segment in the personal care industry The company focused on direct selling, retail selling through kiosks and online selling as its marketing strategy which helped it to be focused and also simplified the organizational operations It already had a worldwide recognition in terms of brand name which depicts a strong customer base to be stimulated It was the creator of alpha-hydroxy skin care products which took up the trend in fashion during the period It had a diversified product line, targeted the ultimate customers according to their age group, gender and ethnic background It also served its customers with beauty advices and other services in order to encourage them in using Avon products Strong relationship with the regulatory framework, enhancing the internal quality control measures and self inspections Decentralized management framework Weaknesses Avon’s financial structure was remarkably weakening with stagnant sales revenue and lower growth rate The brand image of the company got fragmented due to over diversification of the product line Lack of aggressive purchase of Avon products by targeted customers, i.e. the Generation Y Increasing competition in online selling Loyalty in brand segments were unequal due to inadequate distribution channels Growth in all the sectors were not adequate, i.e. in the women section the company had a significant growth comprising of elderly females while in the men’s section the company was quite weak Inefficiency in the recruitment and retaining of quality employees Increasing competition in online marketing along with major disputes between the company’s strategies and the interests of sales representatives Markets were weakening in the developed economies including the European region Opportunities The Personal-Care industry was growing, although it at a slower pace Reliable growth in the hair-care section in the market segment based on ethnic backgrounds of the customers Rapid growth was witnessed in the personal hygiene, men’s fragrances and makeup/color cosmetics sections Spa services were gaining consistent attention among the customers and marketers as a medium to generate higher customer loyalty Personal care products were highly favored by the Generation X customers Kiosks were receiving more and more attention in the industry supply chain North and South America were termed as the most potential markets for personal care products Online selling is most likely to gain a rapid growth in the near future The regulatory framework supported the operations of self-inspections, good manufacturing and maintenance of good relation with the regulatory bodies It had only two major competitors, i.e. Mary Kay Inc. and L’Oreal Mary Kay had no growth with weak existence in the women section Threats Mary Kay had only 8 categories of products with 200 different product lines primarily focused on the men’s section with limited women customers Mary Kay also segmented its market only in three categories, i.e. men, women, and ethnicity L’Oreal had a great impulse on the international market with its focus on the ethnic groups and market segments comprising of Generation X and Generation Y Rising competition in the retail sectors with increasing number of participants in the online selling zone B. Strategic Options Based Upon SWOT Analysis With reference to the findings of the SWOT analysis, it can be fairly stated that the market scenario of Avon is highly competitive with feeble growth rate. However, there are various opportunities which can assist the company in attaining higher growth rate. To be mentioned, there is a huge prospect in the market segment comprising the men’s section with lesser number of competitors and uprising demand. Spa services, hair-care products and personal-care products can also assist it in gaining competency with increased sales. Kiosks can also be referred as influencing brand promotional activity. It is in this context, that Avon possesses much strength which can strongly support the marketing operation of the company and overcome the threats in the industry. On the contrary, it also possesses few weaknesses in terms of its marketing strategies. For instance, it has over expanded product line which is becoming uncontrollable for the company. Moreover, the company’s relationship with its representatives also requires attention. C. Options by Priority The utmost priority of the company can be identified as to attain higher growth prospect. It also needs to bring stability in its market affairs besides its relationship with the sales representatives. Conversely, to attain higher sales revenue, Avon should narrow down its product lines as well as target market segments. It should also concentrate on the utilization of its kiosks in order to enhance its brand recognition. The company also has a great opportunity in focusing on its online selling process along side with its direct marketing. Hair-care products and the personal-care products can also be quite beneficial to enhance its sales. Recommendations In order to gain higher sales revenue, Avon can concentrate on the market segments comprising Generation X and Generation Y customers, especially the women sector. It is due to the fact that the company already possesses a great impact on the Generation X customers and the Generation Y customers and they have the ability to stimulate the growth of the company. It should also provide topmost priority to its hair-care and personal care products, principally in the American market as the growth prospects are quite significant in the region for these products. However, it should accordingly stimulate its strengths which shall prove to be highly beneficial in the long-term context. Bibliography Carro, Gabriella. Del. & Et. Al. Avon Products, Inc.: The Personal–Care Industry Business Level: Domestic and Global Cases. Read More