Avon Products Inc’s environmental trends and issues vary with different key factors. First indicator is world population which is growing slower than predicted. There has also been an increase in literacy levels with the number of people receiving education increasing. Adult literacy has also increased.
The economic fortunes of most developing countries have also risen steadily even though other nations face economic decline. The gap between rich and poor nations continues to widen thus indicating that few individuals control most of the world’s economic and natural resources. Another indicator is global food production is generally adequate to meet nutritional needs but there is a problem in distribution. Food production keeps rising but there are several trends that will make it difficult to feed the growing population. Consumption of natural resources by industrialized nations is on a high thus making it difficult for developing nations to adapt the same economic model as that of developed countries. There are also changes in the global ecosystems, a rise in water consumption and deforestation being a major issue. All these factors drive the environmental issues and trends (Petouhoff & Recorded Books, Inc, 2011).
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Avon Products Inc’s drivers of demand for products and services are thus determined by an increase in global population thus competition for natural resources increases. The social expectations of the quality and delivery of products and services by society could drive the demand of products and services. The social, economic, legal and political as well as technology are some of the factors that drive the demand of products and services.
b). the economic trends of principal nations are shown in the table below.
| Country Group Name | Subject Descriptor | Units | Scale | Series-specific Notes | 2015 | 2016 | 2017 |
| Advanced economies | Gross domestic product, constant prices | Percent change | 2.233 | 1.659 | 2.168 | ||
| Advanced economies | Gross domestic product, current prices | Purchasing power parity; international dollars | Billions | 48,858.60 | 50,300.26 | 52,283.54 | |
| Advanced economies | Gross domestic product per capita, current prices | Purchasing power parity; international dollars | Units | 46,343.43 | 47,458.83 | 49,111.30 | |
| Advanced economies | Inflation, average consumer prices | Percent change | 0.274 | 0.771 | 1.676 | ||
| Advanced economies | Unemployment rate | Percent of total labor force | 6.671 | 6.206 | 5.699 | ||
| International Monetary Fund, World Economic Outlook Database, October 2017 | |||||||
Advanced economies in this chart refer to developed countries such as the United States, Germany and the United Kingdom. The table above shows the GDP growth rates and per capita as well inflation rates and unemployment rates in these economies. From the above table we can see that these economies have high GDP growths as well as per capita income. The inflation rates are low as well as unemployment rate being low( Petouhoff & Recorded Books, Inc, 2011).
c. demographic trends are crucial in any economy as it determines Avon Products Inc’s business and investment opportunities and trend. Key factors that are shaping demographic trends are:
The ratio of children to older citizens. This ratio is declining and it is expected that in a couple of years there will be older citizens compared to the number of children.
Sea change in the nature of illness to non-communicable diseases. This determines the aging and longetivity of individuals. Emerging economies have rising rate in aging population. This therefore means that old age dependency is rising rapidly especially in Japan and European countries but the pace is slower in Anglo Saxon economies.
This therefore means it’s getting harder to exploit demographic dividends because of what countries go though when child dependency is falling and working age population is expanding.
Cultural analysis of a county depends on 6 models.
Power distance- this is the degree to which the less powerful members of society accept and expect that power is distributed unequally.
Individualism- this is the preference of a loose-knit social framework.
Masculinity- this is the preference in society for achievements, heroism, assertiveness and material rewards for success.
Uncertainly avoidance- this is the degree to which a society feels uncomfortable with uncertainty and ambiguity.
Long term orientation- creating links with the past while dealing with the present and future.
Indulgence- this is when a society allows free gratification of basic and natural human drives related to enjoying life and having fun.
An example of a country’s cultural analysis is shown in the table below. It is that of the United States.
From the table above, we can see that the united states have varied percentages in the cultural analysis model. In the power distance less than 50 percent are comfortable with unequal distribution of power whereas we can see quite a high number in the individualism. This based on their culture they prefer mostly loose knit families. Interactions are often with immediate family members and there is little interaction with the wider community. Unlike in developing countries where interaction is both between the immediate family and the surrounding community.
Their masculinity rate is also high meaning they value their heroes and the achievements the country has made over the years. They acknowledge their heroes and reward success. Their uncertainty avoidance is also low thus we can conclude that it is a country that ambiguity and uncertainty is not tolerated and that it is a society that likes to be sure of things. Long-term orientation is very low. This means that most in the country do not like to dwell in the past or most people are not in touch with their history and like to focus solely on the present and not worry too much about the future. Indulgence rate is high thus means that it is a country that likes to have fun and enjoy themselves whenever. They allow free gratification of basic and natural human drives and in turn are a joyous people.
Strategic issues of Avon Products Inc are important in dealing with how an organization will survive in the market. An organization can make a SWOT analysis as part of their strategic plan. Some of the issues one needs to consider are the changes that could affect the organization such as demographic changes of stakeholders including numbers, values, resources and power. One also needs to consider the changes in rules and regulations as well as expectations from both customers and suppliers and also the shift in product and services needs and availability. Another point of consideration is the competitors. One needs to know if there are other organizations offering the same products and services and how well to compete and stay afloat in the market.
It is important to know the opportunities that Avon Products Inc has and how best they take advantage of those opportunities and include them in their day to day operations. An organization also needs to know the threats they face especially on their produce and how best to deal with them. Threats can come from competitors or from market dynamics such as hostility and difficulty in penetrating the markets. It is also important to know the organization’s weaknesses and how best to deal with them. Identifying your weaknesses is important in as it will help the organization to strategize well and focus more on their strengths and dealing with the weaknesses so that they do not affect productivity. In strategic planning one also needs to consider the quality of the internal activities of the organization. By this one needs to look at the board of operations as well as its planning and marketing strategies and their products and services- whether they are of good quality to compete in the markets with other products. One also needs to look at staffing and finances. It is important to hire the right employees who are not only competitive but also motivated. A conducive work environment is important in order to be able to not only attract qualified staff but also to retain them. Finances are important because it is the backbone of all the strategies. One cannot make good strategic plans and not have the finances to be able to implement the plans. Being financially stable is important and also being able to make money is important as well. An organization cannot go into business without being able to stay afloat and also being able to make profits and pay its employees well enough to be able to maintain and retain them (Avon Products, Inc. 2011).
Avon Products Inc’s needs to write down the strategic issue are clear and easily understood. Avon Products Inc not only needs to write the issues but also identify the goals and when to achieve them and address the issue,
MULTINATIONAL ORGANIZATIONS
This is an organization that controls production of goods and services in at least one other country other than its home country. The structures of such organizations are just like any other organization’s structure where it consists of the:
Operating core: responsible for basic work related to production of products and services.
The middle line: the binding link between operating core and strategic apex. They usually supervise the operating core
Techno structure: this is where the analyst of an organization and their support staff are located.
The support staff: consists of all support units and are found in all levels.
Strategic apex: they are at the top of hierarchy and consist of top management and board of directors. They are concerned with all global issues.
Methods of operation of a multinational organization do conform to both local and international levels as well as legislature. Distribution is done locally be partnering with local distributors to benefit from local expertise.
Avon Products Inc’s marketing method focuses on the technical innovation, product adaptation, availability and security, pricing as well as total adaptation and conformity. The advertising and packaging of products need plays a part in its global appeal as well as local identification. The technical functions are such that Avon Products Inc. easily shares operation with its branches worldwide. They should be able to exploit locally created knowledge worldwide. Administration should also adhere to both an organization’s and international strategies.
STRATEGIC ISSUES AND ACTION
Avon Products Inc’s basic strategic model constitutes of a strategic plan and design to improve a process. This process is often used by organizations to improve operations and in turn meet their goals (Standard and Poor's Corporation, 2011).
There are several factors that do affect Avon Products Inc. growth plan. These are often described as barriers to growth. They include:
Poor infrastructure
Human capital inadequacies
Declining terms of trade
Foreign currency and capital flights
Corruption, poor governance and impact of civil war.
Population issues.
These are often also driven by the economic, social political, regulatory, market trends of a country as well as exchange rates and rival initiatives. How advanced an economy will determines how fast or slow an organization grows as well as the political climate in the country. A hostile political environment could make it difficult for an organization to operate let alone to grow. Therefore a company needs to carefully study the growth indicators as well as barriers and see how best they can venture into that country before they set up shop (Feitz, 2011).
For an organization to grow, it cannot stick to business as usual mindset. An organization thus needs to look at the following as indicated in the Ansoff matrix:
Market penetration- here a corporation focuses on expanding sales of existing products in an existing market.
Product development- this is when you introduce a new product in the market.
Market development- putting an existing product into an entirely new market.
Diversification- introducing a new, unproven product into an entirely new market that you may not fully understand.
Avon Products Inc. A should come up with some new initiatives. These are specific projects or programs undertaken to achieve specific objectives in the short term. These are reducing costs, increasing efficiency and improving sales performances. This is done in order to improve the company culture, increase in productivity, improve sales and reduce operating costs. An organization not only needs to have major initiatives but also coordination of both domestic and international management. This can help in moving and clearing goods faster and cheaply and also free flow of information thus making it possible to be able to make improvements (Feitz, 2011).
OUTLOOK
Avon Products Inc’s sales and profit targets are essential for the company. This ensures that Avon Products Inc’s marketing and sales objectives fit together with profit targets. The main purpose for being in business is to make profit thus there should be a right balance between the strategies and the profits. A profit target can be a powerful catalyst in improving the company. One should set a start up minimum goal then aim higher. In so doing, one therefore needs to determine a target return on invested capital, calculate the profit margin and the difference between targeted gross profit margin with the previous year’s actual gross margin. One also needs to prepare a sales forecasts as well as a forecast of the cost of goods sold and most importantly make a plan and execute the plan (Avon Products, Inc. 2011).
The difference between domestic and international mix is that a domestic marketing mix is when commercialization of goods and services are confined to a home country whereas international marketing is stretched across multiple countries worldwide. The scope of marketing mix decisions in both an international and domestic marketing is what it different but the strategies and elements are basically the same. In international marketing one has to decide whether to sell the same product as they do locally in the international markets or change specifics to the product to meet international standards.
No one is immune to challenges thus each company faces different challenges and has to learn how to deal with them. These challenges include:
Uncertainty about the future. A company needs to be able to monitor consumer and marketing trends and this could be the difference between bright futures of a dull one for the company.
Financial management. This is being able to monitor cash flows, profit margins and reducing costs.
Monitoring performance. Being able to come up with a set of indicators on how well the business is performing.
Regulation and compliance. Being able to know and conform to a country’s regulations and rules. A company thus needs understand the changes and how best it affects the business.
Technology. Knowing the technological changes in the global markets and being able to compete with the changes.
Competencies and recruiting right talent. This is important for an organization to find the right people for the job and being able to maintain their competency levels on a high.
These are some of the major challenges Avon Products Inc. face as a company. Thus to be able to make strategies that can deal with these challenges is crucial for Avon Products Inc’s survival.
References
Standard and Poor's Corporation. (2011). Standard & Poor's 500 guide . New York: McGraw-Hill.
Petouhoff, N. L., & Recorded Books, Inc. (2011). Like my stuff: How to get 750 million members to buy your products on facebook . Avon, Mass: Adams Media.
Jaworski, B. (2011). 100 ways to sell Avon .
Feitz, L. (2011). Avon Products, Inc. The Public Historian, 33, 4, 114-116.
Avon Products, Inc. (2011). AVON PRODUCTS, INC. - ANNUAL/10K REPORT - DECEMBER 31, 2010. Reportal.
