Andrea Jung and the Turnaround of Avon Products

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Case Details:

Case Code : LDEN035
Case Length : 15 Pages
Period : 1999-2005
Pub Date : 2005
Teaching Note : Available
Organization : Avon Products Inc.
Industry : Cosmetics
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"I'm proud of my heritage and certainly my gender. I think it's a privilege being a minority woman leading a Fortune 250 company."

- Andrea Jung, Chairperson and CEO,
Avon Products Inc. in 1999.¹

"She's a young woman with a very big job. She has an opportunity to really demonstrate her abilities, and if she does well, others will undoubtedly reach for her."

- Herbert Mines, executive headhunter for Herbert Mines Associates in 2000.²

Andrea Jung in Fortune's List

In October 2004, Andrea Jung (Jung), the chairperson and CEO of Avon Products Inc. (Avon), was listed at the third position on Fortune magazine's annual list of the '50 Most Powerful Women in Business'. She was ranked behind eBay's Meg Whitman and Hewlett Packard's Carly Fiorina (a longtime top position holder now ranked second).³ It was the fourth time that Jung had featured in this list, and analysts said the honor was well deserved. Jung was credited with transforming Avon, which was mockingly called the 'Graying Goliath', into a modern company that catered to the beauty needs of women across age groups and social strata. Under her leadership, Avon's image in the market changed from "frumpy" to "fashionable".⁴

Jung was appointed the CEO of Avon in 1999, after the departure of her predecessor Charles Perrin (Perrin), who had earlier been the CEO of Duracell. She was the first woman to become the CEO of the company, which was more than a century old. At the time of her appointment, several people, both inside and outside the company, were of the opinion that Jung was too young and inexperienced to lead a global company like Avon. However, Jung's dynamic leadership and comprehensive turnaround plan soon silenced their doubts. By the early 2000s, it was universally acknowledged that Jung had been the ideal person to lead Avon out of its difficulties. (Refer Exhibit I for a background note on Avon).

Background

Jung, the older child of immigrants to Canada (her mother was from Shanghai and her father from Hong Kong), was born in 1958 in Toronto, Canada. Both her parents were ambitious⁵ and they inculcated the same ambition and drive in their children. As a child, Jung took piano lessons and attended Mandarin classes. She was a dedicated student and was also involved in class politics (she was class secretary at her high school).

Jung believed that the values inculcated in her as a child played an important role in the approach she took to achieving tasks later in life...

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1] Dana Canedy, "Opportunity Re-Knocks at Avon," The New York Times, November 5, 1999.

2] "Avon's New Calling", Business Week, September 18, 2000.

3] Carly Fiorina was fired from HP in early 2005. .

4] Jennifer Pellet, "Ding-Dong Avon Stalling?" Chief Executive, June 2000.

5] Jung's father was an architect of repute and her mother was one of Canada's first female chemical engineers