Avon in Global Markets Essay
Avon in Global Markets
1. Referring to this chapter and Chapter 9, evaluate Avon’s Strategic International Human Resources practices in global markets regarding development of a global management cadre, HCNs, and building company associates and independent representatives in host countries.
Avon Strategic International Human Resources practices in global markets: In this day and age the world is no longer bound by distance; the gap between countries and cultures are shrinking. Most business try attempt to take advantage of this and expand beyond the borders of their homeland. The idea of world market share is lucrative to most businesses not to mention profitable. Such With the great expansion and lucrative prospects, there is a strong expansion creates need for international human resource management. Human resource management is the whole process of recruitment and selection of the employees, it has been perceived by many observers as a key ingredient and accounts for the success of companies on world markets.
“In international business, consumer companies cannot operate efficiently without having best and most well- trained sales force” (Deresky, 2010, p. 378). Hence by acquiring a local employees with proper skills and adequate company’s knowledge benefits the company in an aspect of better understanding of the surrounding environment and communication advantage of common language and for this reason, Avon has hired million local door to door representatives to advance their work force and to improve their international market.
Recruitment and selection:
“In addition, valuingValuing workforce diversity and providing equal opportunity is important to the company” (Deresky, 2010, p. 379). Qualities such as culture empathy, that isthe appreciation and respect of beliefs, values and behavior, interpersonal skills, such as communication and the capacity to build trust, managerial, and decision making abilities particularly under condition of isolation environment and other crucial qualities including self-motivation, ethical standard, relationship building, organizations skills and so on are looked for. This strategy facilitates Avon to identify full potential of the recruits and their competencies.
Avon is a company which caters to women and is ranrun by women. Having a female in charge serves a fundamental advantage since she can better understand the target customers and their needs. This, hence helps Avon to well implement and execute their goals successfully. Before Andrea Jung took over as CEO the company was struggling with low revenues and high debts. Once Andrea Jung took charge, she has implemented several efficient policies in both US offices and foreign offices that helped to boost up the company’s revenue and got rid ofeliminated the debt problems the company was facing. This has allowed the company to retain its reputation and increase its sales network and all while continuinge to grow into new markets such as India and China.
Avon’s dedication to charity has been a part of company’s policy for more than 125 years. This builds a close relationship between and the company and the society in which it functions. Not to mention brings a It also provides greatvery good publicity and a set up for numerous PR campaigns. Avon’s foundation helps provide funds for cancer researches, for scholarships and other charitable programs. In addition to workforce diversity and minority recruitment, the company supports various programs in women’s empowerment.
“Like other companies, Avon runs leadership programs on the job training seminars on a regular basis.” (Deresky, 2010, p. 378). This provides employees with the tools, knowledge and the ability to impact and inspire their followers and thereby sharpen their skills and knowledge in the effective manner. The programs help in strengthening the area of weaknesses and provide accountability and clear vision.
2. Describe how Avon’s business model has changed in light of demographic and social changes in the United States and abroad. What role has IHRM played in the company’s global expansion?
Avon has had to adapt its business model due to demographic and social shifts. In the United States, for example, resources have become less differentiated and the biggest way for a company to gain a competitive advantage is with a well-developed workforce. Technological advancements have also created the need for Avon to have an online platform in order to efficiently manage their workforce. Changes abroad have also impacted Avon. For instance, new emerging markets such as India, Russia and China have created new opportunities for the company. However, these countries must be analyzed to understand how to establish a workforce as well as the social and demographic factors that can affect their human resource practices (iei.e.; the social role of women; restrictions on certain business practices).
In the global market, Avon hires and trains the new local workforce in its door-to-door selling model and adapts their distribution strategies to the local needs by including mail, phone, fax, retail outlets, and web sites for working women and to accommodate other cultural and logistical practices. Human resource management plays a huge role in dealing with knowing who to recruit for the global workforce, what qualifications can be expected, how to best motivate them and what levels of productivity can be expected from them once integrated into the company’s network. The role of IHRM for Avon in global expansion include: 1) Training in both virtual and time-based seminar; 2) Adapting and adjusting the operation to local industrial relations systems.
3. Since 70 percent of Avon’s revenues are generated outside the United States, what recommendations would you provide to the company regarding dealing with a culturally diverse workforce and a multicultural marketplace in the coming years?
Avon is already on the right track in dealing with a multicultural marketplace. It currently “maintains 5.8 million independent representatives and approximately 42,500 associates in over a hundred countries” (Deresky, 2010, p. 378). Avon has a strong brand that is well known internationally. This helps the company attract top-notch employees that truly want to work for Avon. Although many would see Avon’s culturally diverse workforce as a challenge it is actually one of Avon’s greatest strengths. Avon’s diverse employees are already aware of the cultures with which they are conducting business because the employees share the same culture as the consumers.
The employees understand what types of products their culture demands and which they do not. This helps to prevent excess supply or wasted marketing efforts on products that are of no interest in certain markets. In addition, with Avon’s large focus on door-to-door selling their diverse workforce is extremely helpful because these employees are fluent in their native languages and will be able to excel in conversing with their potential customers in efforts to produce sales. As stated in the case study, Avon’s 5.8 million independent representatives “are self-managed Host Country Nationals who know the culture and the ways to do their business in their home turf” (Deresky, 2010, p. 379). These representatives help to minimize the culture shock Avon employees would normally experience had they not had any previous experience dealing with a foreign country and were expected to conduct business there.
Since Avon has employees and representatives hailing from the countries in which they are conducting business it makes the sales aspect much easier since there is minimal cultural disconnect between the consumer and the sales personnel. Therefore, my recommendation is that Avon continues its efforts to hire employees from various cultures especially in areas in which Avon currently conducts or plans to conduct business. However, hiring a diverse workforce can prove difficult when poorly managed. Luckily, “Avon’s managers realized that becoming aware of intercultural differences and getting the appropriate training play an important role in the development of a productive sales force” (Deresky, 2010, p. 377). Avon understands that their employees are the key to success; therefore it is imperative that they maintain employee efficiency, productivity, and morale.
The company is able to ensure this via the four areas of compensation, fringe benefits, professional development, and workforce environment. Employees greatly enjoy these benefits as well as working for Avon, which helps fuel, the company’s outstanding performance. My recommendation is that Avon continues their pursuit of maintaining a diverse workforce. The company must ensure they are constantly training their employees in areas such as new product offerings, dealing with various cultures, and performing efficient sales. As Avon looks to continue its expansion they must ensure they understand each marketplace prior to moving in and beginning business. In order to expand their multicultural marketplace Avon must work to put together solid research teams that will be in charge of understanding and discovering all facets of a country’s economy and population. This will allow Avon to be well prepared and easily determine which products will be sold in which countries based on the population’s preferences.
4. Avon’s future global expansion is contingent on hiring and retaining the best workforce and salespeople in global markets. What training and cross-cultural practices would you recommend to the company to deal with this area?
In order for Avon to develop the best global workforce they must consider cultural sensitivity, motivation, ethical-standards, relationship building, and organizational skills (Deresky, 2010, p. 377). Avon can achieve the best global workforce by continuing to provide leadership programs and on-the-job training seminars on a regular basis. If Avon wants to continue expanding globally, they may consider continuing their global geographic (area) structure. This structure allows regional and local managers to address, and solve issues based on their knowledge of the local culture, government regulations, and business transactions (Deresky, 2014, p. 247).
The benefits of this structure were evident in the case where Avon’s China General Manager, Ms. Jung, noticed the need to change their distribution strategies in order to adapt to local costumers needs (Deresky, 2010, p. 379). Ms. Jung also noticed the need for international representatives to gain faster online access to improve training (Deresky, 2010, p. 379). Avon has done a great job thus far in hiring and retaining one of the best workforce and salespeople in the global market. A rising middle class in the emerging markets will help Avon reach people they have never reached before. If Avon wants to continue their success, they must consider their cultural environment and continue evolving their training technicstechniques and technology.
5. China is expected to be a major market for Avon. If you were to advise Avon, how would you develop a competitive IHR plan for the company?
Starting with assessing Avon’s successes in the international realm, it should be noted that Avon approximates “70 percent of the company’s revenues come from selling its products in international markets” (Deresky, 2010, p. 376). A second important factor that would need to be considered for developing a competitive IHR plan for the company would be to ensure a “brand identity” existed or could be created in China if it was not present as of theat the time Avon was planning to venture into the country. A brand identity, as defined by Investopedia is “how a business wants a brand’s name, communication style, logo and other visual elements to be perceived by consumers” (Brand Identity, 2014)). It would be obvious to state that Avon should begin to compare and contrast the brand identity of other major personal hygiene and makeup companies that have previously set up shop in China. Evaluating Estee Lauder and L’Oreal, for example could prove to provide fruitful information on which types of marketing and advertising campaigns may or may not work in global China.
While major companies such as these have previously completed the leg work in customer recruiting, Avon could gain much advantagesmany advantages from reviewing these strategies and applying some to their market model within China. Avon would also need to immediately define the knowledge and skill set models that managers and sales personnel would need to have in order to be successful in this major foreign market. Working in a country such as China will be much different in many cultural areas as compared to operating within America. Cultural sensitivity issues should be highlighted, as well as motivational factors of what might energize customers to purchase Avon’s products. Perhaps time sensitivity issues could be a point of training for managers and sales representatives as well. Questions such as how much time should be spent on trying to convince a customer to purchase products or when is a good time of day to try and sell to customers should be analyzed as well.?
All of these issues should be strategized and should be provided as in-depth training to employees and managers alike before deploying teams of representatives into the streets of China. It will be equally important, when developing a competitive IHR plan to ensure employees are consistently referring back to Avon’s five values and principles, which include “trust, respect, belief, humility, and integrity” (Deresky, 2010, p. 377). Having the ability to reach back to these core values and principles, sales representatives will succeed by remembering the values and traditions that helped to make Avon successful in other countries.
6. What is the role of IT in Avon’s markets, in particular in developing areas? What are the implications for training its representatives?
“The new information technology… internet and email… have practically eliminated the physical cost of communications” (Karlgaard, 2004). Business activities and marketing activities cannot be realized without the use of information technology, marketing managers cannot make quality decisions, and marketing strategies cannot be designed and cannot be oriented business policies. Therefore in the modern enterprises all important managerial positions must be connected to computer networks and use information technology. The evolution of e-marketing has enabled Avon to include all its marketing activities online and has enabled them to contact their customers quickly and easily in order to meet their needs, wishes and requirements. This has helped Avon to maintain a long relationship with their customers, and fulfill their needs, and increase their loyalty toward the products of the organization.
Furthermore, the availability of a great amount of information with in short period of time can be obtained at an instant through the use of information technology. In business, information is the most precious commodity in the market. A pPlethora of information can be acquired through electronic and communication media by using computers, information technology and information systemthrough information systems. Hence it is very resourceful to enterprises and therefore Avon is as well taking an advantage to gather the necessary data on the market about customers, their needs and habits and process data in to information. Consequently, usage of information. Information technology also helps Avon to lower down their costs, proper time managementimprove efficiency, producing produce quality products, and advancing advance the company’s innovation. This is contributed all is due to the consumer information collected that provides the knowledge on consumer behavior that which helps the company reducing reduce uncertainties for marketing decision making and thereby assist in price settings, promotions, selection of target market as well as sales channels.
The biggest strength of iInformation tTechnology is the ability to grow fast inquickly grow in developing markets. Avon use utilizes information technology for its training practices to its employeesemployee training programs. Instead of gathering all every representative in the office, Avon can upload training seminars videos online so that the employees can carry out training while they are home. “The company’s distribution strategies may have to be adopted to the local needs because of working women or other cultural and logistical considerations and include mail, phone, fax, retail outlets, and Web sites” (Deresky, 2010, p. 379). Therefore, UsageThe usage of technology in marketing has enabled Avon to grow rapidly and has led to marketing development through networks. It has ; it as well also enabled rapid and efficient communication, transfer of information over distance, creation of virtual organizations, shipment of goods, and direct payment via internet and so onas well as many others.
All these element of new form of business that e-business have been easily adopted due to the actions of the company activities surrounding and marketing conditions in order to meet better customers’ needs and requirements. It is now essential method for Avon to control its operations. In conclusion, the iInformation tTechnology strengths of Avon allows Avon the company to have communication and information access on the fly anywhere in the world at a low cost. The IT infrastructure also allows the Avon team to quickly train the local Salesforce sales force and process orders with very low cool down. The implication of training representative in development areas, such strategy allows to bring Avon’s products straight to the consumer. The new representatives help Avon to organize orders, distribute orders, promote products and therefore create a strongstrong brand name recognition worldwide.
7. What do you think are Avon’s prospects in India, given that the per capita spending on beauty there is only $1, compared to between $100 and $200 in developed markets?
Avon’s prospects in India look to be positive. India is one of the largest growing markets besides China, and they have a very large population when compared to other major counties such as Japan, United Kingdom, South Korea, Australia, Hong Kong, and Singapore. With the huge population in India, there are more than 370 million women between the ages of 15-64, which indicates a high customer base (Deresky, 2010, p. 379). The population in India is also growing at about a 1.3% each year. When compared to Singapore’s per capita spending, India has bright prospects despite their low per capita spending because of their. This is due to their huge population. Another reason India looks like a positive prospect is due to the untapped market, which can drive long-term growth. The company launched new anti-aging products aiming to reach 93% of the country’s population by 2015. The Avon also planplans to launch personal grooming products for men, which is another untapped market.
Brand Identity. (2014). Retrieved from Investopedia: http://www.investopedia.com/terms/b/brand-identity.asp Deresky, H. (2010). International Management: Managing Across Borders and Cultures, Text and Cases (7th ed.). Prentice Hall. Karlgaard, R. (2004, November 19). Peter Drucker On Leadership. Retrieved from Forbes: http://www.forbes.com/2004/11/19/cz_rk_1119drucker.html