Makeover of Avon: Sheri McCoy’s Challenges




Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

Abstract

The case discusses the various challenges faced by the CEO of the world’s largest direct seller of beauty products — Avon Products Inc. — in 2013. Avon was started as California Perfume Company (CPC) by David H. McConnell in 1886. Later on, in 1939, the company was named as Avon by David H. McConnell Jr. The whole business of Avon was based on the pillars of its sale representatives working through the direct selling model.

In 1999, Andrea Jung became Avon’s first female CEO. Under her leadership, the company showed healthy growth for a few years. But business started to decline after 2005, mainly due to problems in the direct selling model in Avon’s home market, the US. To arrest the downfall, Jung came out with two turnaround plans, but neither worked. In 2008, Avon faced allegations of possible violations of the Foreign Corrupt Practices Act for bribing Chinese officials and making questionable payments to third party consultants.

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Issues

The case is structured to achieve the following teaching objectives:

  • Understand the various challenges faced by Avon while following the traditional channel of distribution.
  • Analyze turnaround plans proposed by Jung and McCoy
  • Understand the key challenges faced by Jung and McCoy
  • Discuss and debate the efforts McCoy needed to put in to revive Avon
  • Discuss the various measures which could help Avon achieve its targets set for the coming years
  • Debate whether Avon could compete in the changing market conditions
  • Debate how Avon could modernize its traditional distribution channel
  • Understand the issues and challenges in turning around a company

Contents
Introduction
About Avon
Avon Under Andrea Jung
Proliferation Of Illicit Brews
McCoy’s Turnaround Plan
Future Outlook
Exhibit

Keywords

Cosmetics Industry, Avon, Distribution Channels, Direct Selling, Multi Level Marketing, Sales Representatives, Restructuring Initiatives, Turnaround, Retail outlets, Sheri McCoy, Online Selling, Brochures, Foreign Corrupt Practices Act, Andrea Jung

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