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AVON Products, Inc.

Key External Factors

Opportunities

1. Introduction of green products which is a growing trend in the cosmetics industry.2. Cosmetic industry tends to be countercyclical the industry for which the demand is not correlated with the business cycle.3. Aveda cosmet ics found that sixty eight percent of consumers will rema in loyal to a company that has a social and

environmental commitment.4. Urban trendsetters markets5. Geographic growth enormous growth opportunities existed in countries with huge populations such as China, Indonesia,

and India.

6. The baby boomers a re aging and they are more consci ous on t heir appea rance, beauty and also improving theirlooks.

7. Emphasize direct selling in emerging and developing market. Threats

1. There is the emergence of new competitors worldwide such as Mary Kay and Revlon.2. The number of people buying Avon products in markets like United States had been declining by 2 to 3 percent per year for

12 years. In terms of color cosmetics, environmental International Inc. predicted that many of these markets will see

slowdown in volume demand.

3. There is a rejection of internet selling by sales representatives.4. Global economic climate stifled new product development, innovation and sustainability programs in 2009.5. The cost of commodities is rising.6. They are a multilevel based company that sells inferior quality with a higher price tag than what it is worth.7. The inflation rate is rising.

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External Factor Evaluation Matrix (EFE)

The table below shows the opportunities that are available and factors that threaten the success of the business.

1= the response is poor, 2= the response is average, 3= the response is superior, 4= response is superior

KEY EXTERNAL FACTORS Weight Rating Weighted Score

Opportunities

1. Introduction of green products which is a growing trend in the cosmetics

industry.

0.08 4 0.32

2. Cosmetic industry tends to be countercyclical the industry for which the

demand is not correlated with the business cycle.

0.06 3 0.18

3. Eye make-up market 0.07 3 0.21

4. Urban trendsetters markets 0.09 4 0.36

5. Geographic growth enormous growth opportunities existed in countries with

huge populations such as China, Indonesia, and India.

0.07 4 0.28

6. The baby boomers are aging and they are more conscious on their

appearance , beauty and also improving their looks.

0.07 3 0.21

7. Emphasize direct selling in emerging and devel oping market. 0.06 2 0.12

Threats1. The emergence of new competitors worldwide 0.08 2 0.16

2. Market slowdown 0.07 3 0.21

3. Rejection of internet selling by sales representatives 0.07 3 0.21

4. Economic downtown 0.08 2 0.16

5. Rising cost of commodities 0.07 2 0.14

6. Selling inferior quality with a higher price tag than what it is worth 0.06 2 0.12

7. Rising inflation rate 0.07 3 0.21

TOTALS 1 2.89