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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Excerpts
Early Career at Avon
Jung joined Avon as a consultant in May 1993.
Avon's then CEO James Preston (Preston) was considering selling
Avon's products, which until then were only distributed through
direct selling, in retail stores, and wanted Jung to study the
impact of such a move...
Jung's Game Plan for Avon
Plans to turn Avon around had been formulated in the
mid-1990s when Preston was the CEO. Perrin also did his part to help improve the
company's business, notably embarking on a business process reengineering, and
trying to improve the company's image in the market (Jung collaborated with him
on this). However, there was no impact on the company's performance. By 1999,
the company had an annual sales growth rate that was less than 1.5 percent and
its share prices were declining when the general economy was booming... |
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Being a Woman CEO
According to analysts, Jung's success proved that a woman was the best person
to lead Avon. Although the company had begun making turnaround efforts in
the mid 1990s under the leadership of Preston and continuing under Perrin,
it took a woman to bring them to fruition...
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Looking Ahead
Analysts generally agreed that Avon blossomed under
Jung. For a company that was thought to be well down the road to
decline, Avon revived quickly to post remarkable results.
Between 1999
and 2004, Avon's sales increased 45 percent from 5.3 billion dollars in
1999 to nearly 7.7 billion dollars in 2004. (Refer Exhibit II). The
company's stock value increased 164 percent during the same period.
Despite Jung's own views to the contrary, analysts said that being a
woman was Jung's main advantage in turning Avon around... |
Exhibits
Exhibit I: A Background Note on Avon Products
Exhibit II: Avon's Financial Performance under Andrea Jung
Exhibit III: Awards and Recognition
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