In the spring of 2000, Andrea Jung, president and CEO since November 1999 at Avon Products, Inc., faced the strategic decision of developing a growth strategy for a 115-year-old company. Avon Products Inc., the world's largest direct seller of beauty and related personal care products, sold to women in 137 countries via three million independent sales representatives who generated approximately $5.1 billion in annual revenues. Upon reviewing the financial statistics of Avon, Jung realized that not only had earnings risen in the low-single digits in the past few years, but also more disturbingly, the growth rate had shrunk during the same time. In light of this problem, Jung faced significant strategic decisions in growing the company in lieu of its stagnant sales, limited distribution capabilities, and shifts in personal care preferences and spending habits in the rapidly changing personal care industry.
I would love to garner your opinion on whether the Avon grand strategy under the leadership of Andrea Jung has its merits. Please provide feedback with regard to both the positive and negative side of Jung's grand strategy to improve Avon.
When Andrea Jung became the CEO of Avon in 1999 she pushed the firm for further investments in R&D, encouraged to penetrate overseas markets and helped to develop marketing and promotion efforts and gave personality to Avon brands by developing snazzy ads. Sales jumped 45 percent, from $5.3 billion to $7.7 billion in 2004 and the company's stock has risen 164 percent. She focused on the younger generation in the rapidly changing personal care industry. College girls started ...
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