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UBI - Business Intelligence Concepts
Presented by:
Business Intelligence Concepts
IIM/EURO MBA Studies
Presented by:
Ivana Rajkov
Aleksandra Simsic
Ljiljana Radanov
Miroslav Pajic
Radomir Cupara
Milan Djeric
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Competitors
Customers
Distribution
Value and ethics
Market trends
Finance
Geography
Identity
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Avon
Avon is the largest direct selling beauty company in
the world.
Avon is the first company to be selected by the Chinese government to test direct selling.The first fragrance in the newly-launched Today.Tomorrow.Always trilogy wins a FiFi Award.
2005
Avon launches its First-ever Men s Catalog, called M
Avon Foundation launches new domestic violence program, Speak Out Against
Domestic Violence with celebrity spokesperson Salma Hayek2004
Avon signs tennis greats, Venus and Serena Williams, to be the company sFirst global celebrity spokespersons to promote Avon
2000
First ever global advertising campaign themed 'Let s Talk'1999
First Avon Running Global Women s Circuit - Avon Breast Cancer 3-Day fundraising walk.1998
Avon launches its first women's health care initiative program in the U.S. with the "Breast Cancer Awareness Crusade".
1993
Avon U.K. launches the company s first women s health care initiative to raise funds andawareness for breast cancer.
1992
Avon becomes the first beauty company to bring the alpha hydroxy (AHA) technology.1991
First major cosmetics manufacturer to announce a permanent end to animal testing.1989
Avon celebrates its centennial: 1886-1986 1986
First time sales top $1 billion. 1972
Avon listed on New York Stock Exchange, trading starts April 20. 1964
First television advertising launched.1953
California Perfume Company name changed to Avon Products, Inc.1939
First international office opened: Montreal, Canada. Manufacturing starts in 1915. 1914
First print ads published in Good Housekeeping Magazine and First color catalog1905
First laboratory built in Suffern, NY1897
First catalog issued1896
California Perfume Company (CPC) founded in New York City by David H. McConnell. First Avon Sales Representative, Mrs. P.F.E. Albee, now-famous direct-selling methodFirst product produced called the Little Dot Perfume Set included five fragrances
1886
Identity1
Women have been sellingAvon since 1886 - 34
years before women in the US won the right to
vote!
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To provide individuals to earn in support of their well-being and happiness.
To serve families throughout the world with products of the backed by a .
To render a service to customers that is outstanding in its and
To give to employees and Representatives, on whose contributions Avon depends.
To share with others the .
To meet fully the obligations of corporate citizenship by
To maintain and cherish the .
O U R G U I D I N G
T R U S TR E S P E C TB E L I E FH U M I L I T YI N T E G R I T Y
G L O B A L L Y
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A focus on as a key driver of sales growth,
New product lines such as products and .
Further expansion of ,
A career opportunity for ,
Exploration of geographic opportunities, in particular
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Within the following discussion and analysis, we utilize the key performance indicators ( KPIs )
defined below to assist in the evaluation of Avon business.
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which consists of cosmetics, fragrances, skin care and toiletries;
which consists of:
$100 million state-of-the art Research and Development Center in Suffern, New York
Opened in 2005 and constructed on the existing Suffern, New York site, this facility represents Avon s continuing commitment to deliver leading-edge, technology-based cosmetic products to the .
Product categories, include:
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Low
High
High Low
1Beauty
Net Sale Growth
Net Sale by Brand share
2Beauty
Plus
3BeyondBeauty
Legend:
1 Avon Beyond Color, Anew, Mark, Avon Solutions, Skin So Soft, Avon Wellness, Advance Technique Hair Care
2 Watches, Apparel, Accessories.
3 Home products and Gift&Decorative products.
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Strengthening and repositioning key mid-tier brands such as mass skin care brand, Avon Solutions and Avon Color.
Launch a new Avon Solutions franchise called Ageless Results, with anti-aging technology now formulated at a mass price point to capitalize on growing consumer interest in this segment.
Breakthroughs in the nail, lip and mascara categories
Focus on innovation will be supported by a significant acceleration in advertising. In 2006 alone, total company advertising will increase by 50%.
In quantitative analysis advertising delivers a greater payback for Avon because of its ability to motivate both consumers and Representatives.
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United States
Puerto Rico
Dominican Republic
Canada
Chile
Ecuador
Central America
Brazil
Bolivia
Argentina
Venezuela
Uruguay
Peru
Paraguay
Mexico
Thailand
Taiwan
New Zealand
Japan
Hong Kong
Chile
South Korea
Malaysia
Indonesia
Australia
Serbia & Montenegro
United Kingdom
Ukraine
Turkey
Spain
Poland
Moldavia
Macedonia
Lithuania
Latvia
Italy
South Africa
Slovenia
Slovakia
Russia
Romania
Portugal
Israel
Ireland
Hungary
Greece
Germany
France
Estonia
Czech Republic
Bulgaria
Finland
Croatia
Bosnia
Avon s
global markets
Geography
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Finance
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In Asia Pacific, total revenue was consistent with the prior year as declines in China and Japan were offset by increases in nearly all other markets in the region.
In Asia Pacific, total revenue was consistent with the prior year as declines in China and Japan were offset by increases in nearly all other markets in the region.
In Latin America, total revenue increased in 2005 with increases in all markets in the region, except Mexico.
The purchase of licensee in Colombia favorably impacted the region s revenue growth by 2 points.
In Latin America, total revenue total revenue increasedincreased in 2005 with increases in all markets in the region, except Mexico.
The purchase of licensee in Colombia favorably impacted the region s revenue revenue growth by 2 pointsgrowth by 2 points.
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In late February 2006, Avon was granted a direct selling license by China s Ministry of Commerce. That license will allow Avon to commence direct selling in China under the regulations issued by that government in late 2005
In late February 2006, Avon was granted a direct selling license by China s Ministry of Commerce. That license will allow Avon to commence direct selling in China under the regulations issued by that government in late 2005
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Future outlook
Lip balms, specialty hair care products,and skin care products for men will be among the fastest growing categories. Favorable demographics and technologically advanced products will drive sales.
Market Trend4
Sales will exceed, an average annual
increase of 2.9%2.9% from 2002.
Actual and Forecast Growth of the
Cosmetics&Toiletries IndustryActual and Forecast Growth of the
Cosmetics&Toiletries Industry
0,00%
0,50%
1,00%
1,50%
2,00%
2,50%
3,00%
3,50%
4,00%
4,50%
1997 2002 2007
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The U.S. cosmetics and toiletries market has experienced growth for 11 consecutiveyears, with sales reaching almost at the manufacturers' level in 2005.
the lowest level of growth since 1993. facial treatments, personal cleansing products,
fragrances for women, shampoos, and hand and body lotions account for about 40% of total industry sales.
Sale by product class, 2005
16.1%Wellness(weight loss products, vitamins, etc.)
8.3%Leisure/educational(books, videos, toys, etc.)
14.3%Services/other
30.5%Home/family care products(cleaning products, cookware, cutlery, etc.)
30.8%Personal care products(cosmetics, jewelry, skin care, etc.)
Percent of Sales by Major Product Groups
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Biggest producers and markets are . In 2004. Western European market summed in wholesale prices, and 58.10 billions EUR in retail More then
is consisted of 5 countries: Germany, France, Great Britain, Italy and Spain.
Western market consumption increased 3.5% in 2004, Spain had the biggest growth of 7%, the least growth had Germany with 1.5%, while Swiss market slops down to -1.1%
Moderate, consistent, and somewhat slowed down growth of production and market (2004- 4,8: 2001- 4,1%: 2002- 3,6% and 2003-3,5%)* Skin care products will have the fastest growth, following with hair care and bath products. Switching soaps with other newer products. Massive of man care products (20-30%) and teeth whitening products
will remain its high level in global costs, primarily for accomplishing goals in decreasing waste, protection of surroundings and human health. Even though markets are growing because of rationalization in industries, unemployment are expected to increase.
*Source: Colipa
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• Environmental Management Systems
(ISO 14001 worldwide)
• Global Environmental Audit Program (All
manufacturing locations are audited every 3
years)
• Global Environmental Metrics
• Compliance
• Waste Management and Recycling
• Air
• Energy
• Water Consumption
• Greenhouse Gases
Avon policy requires:
Conduct operations in a manner that demonstrates respect for the environment through the
;
Meet or exceed all environmental laws and regulations of the countries and communities in which Avon operate;
Continue to that improve the environmental quality of
operations and products across their life cycle,from initial design to ultimate disposal;
Value and ethics5
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Product Safety & Integrity s role is to:
Ensure new & existing cosmetic products are and meet regulatory requirements;
Develop & implement cosmetic (ingredient/product specifications, test
methodology & manufacturing controls);
Ensure product claims based on are adequately substantiated.
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Breast Cancer Programs
Women s Empowerment Programs
Speak Up Against Domestic Violence
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Sales Representative Earnings
Training
Recognition and Awards Programs
INVESTING IN SALES REPRESENTATIVES
Area
Zone and
District managers.
Avon has one of the most compelling consumer sales channels in the world.
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Associates work in over 63 countries around the world, in: manufacturing; sales management and support; marketing;customer service; research and development; legal; finance and other departments.
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Distributing sale channels
Over the past decade, the market has been going through a . New channels of distribution have been capturing marketers' interest, forcing many to rethink their retailstrategies as well as rationalize product offerings.Mass merchandisers remained the leading outlet with a 27% share. Mass merchandisers were also one of the fastest growing channels in 2005, along with direct sales and salons.
Drug stores18%
Direct sale17%
Department stores16%
Speciality stores8%
Salons5%
Mass merchandise
27%
All others 9%
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79,90%
20,10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Female Male
54%
23%
8% 14%0%
10%
20%
30%
40%
50%
60%
35-54 18-34 65+ 55-64
76%
5% 18%0%
10%
20%
30%
40%
50%
60%
70%
80%
Married Other Single
32%
24%
8%
35%
0%
5%
10%
15%
20%
25%
30%
35%
Some college,technical ortrade school
High schoolgraduate or
less
Postgraduate CollegeGraduate
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Self-Indulgence - What do I do just for me? Physical Appearance/Aging - "Fountain of Youth Options"
93% of women globally saying they put some effort into improving theiroverall appearance
51%
49%
38%
38%
36%
0% 10% 20% 30% 40% 50% 60%
Eating healthy
Drink plenty of water
Exercising
Facial Skin care routine
Get plenty of sleep
More than half of women say the first thing they would do when signsof aging emerge would be to reach for an appropriate facial skin care product, preferably one that contains both natural herbs and medicinal plants, and modern science's most advanced ingredients.
Globally, 95 % of women say that they have not had any cosmetic surgery.
Concerns about the risk
27%
High cost40%
lack of interest
33%
Race against time" and skin care
Avon 2005 Global Women s Survey
buying make-up
30%
eating out30%
hair done40%
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All others37%
Limited Brands 5%
Estee Lauder9%
Avon13%
L'Oreal20%
Procter&Gamble16%
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Shiseido Co. Ltd.
Estee Lauder
ColgatePalmolive
AvonProdutcs
RankMarket
Cap
RankProfit
Margin
RankGrowth
Sales
RankEmployees
RankRevenue
Company
Colgate-Palmolive
Avon
Shisheido
EsteeLauder
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4-point turnaround planto restore sustainable growth
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41%
20%
13%
7%0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Nivea Avon Dove Oriflame
23%
12% 14%
7%
0%
5%
10%
15%
20%
25%
Nivea Avon Dove Oriflame
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MBI and Target Group Index
5 top brands of body care products, most often used in 2005. Sample: urban population in Serbia (without Kosovo) - 3024 participants use products from TGI base of 10028 participants
49%
28%
14%
6%0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Nivea Avon Dove Oriflame
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Continuing of spreading production selling program
under penetrated in the market at mid-tier price segments
Cooperation with competitive companiesin humanitarian actions
Spreading of selling network
Growth on Central & Eastern Europe
Development of education for employees
Perfecting new keys of selling
Development of products for women of other races according to their skin types
Perfection alternative for estetic hirurgy
Untrained selling personnel in some regions
Bad prediction of sales volume
Bad marvet network on certain markets(Japan,Pacific)
Bad management of stocks & supplies
Poor marketing activities
Marketing orientation toward determines markets
Included sales shortfalls in China and deceleration of growth in Central and Eastern Europe, as well as Latin America
SWOT analysis
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High quality wide range of products
Innovation of products
Qualitative & successful management
Long tradition of the company
Market leadership in direct sales field
Ways of selling
Not testing products on animals
Developed selling network companied to competition
Motivating discounts for costmors
Motivating extra earnings based on increased volume of sales
Different politics of the countries on which markets we are involved
New regulative in cosmetics industry
New competitors
Business depends on different needs
Continues decreasing of customers from USA
Aggressive competitor's marketing
Well educated staff from competitive companies
Launched market actual product from competitive retail network well developed
Global economic recession
SWOT analysis
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1. Product innovation
2. Simplifying business system
3. Harmonizing process
4. Increasing shared service centers
5. Reducing total number of products
6. Hold fixed costs flat to down
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Under penetration of mid-tier brand price segments.Innovation of anti-aging technology formulated at mass price pointAcceleration in advertising, which will increase by 50%High focus on international markets Global Direct Selling team, a multi -level marketing program that enables Representatives to earn through personal sale, as well as through bonuses and training.Avon direct selling Uni, to institulize world class training, ensuring consistency and focus across all markets.Capitalizes on very strong marketsCommercial Business Unit CBU are key commercial strategy along with new Global operating structure.Maximizing Brand power and respond quickly and effectively by supporting CBUs by Business Units and Global Supply ChainReduce 50% of layersReduce number of management positions by 20%-30%
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0 50 100 150 200COUNTRIES
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AVON
YVES ROCHER
MARY KAY
AMWAY
NU SKIN
HERBALIFE
BEAUTICONTROL
Take adventage for being the world s biggest direct seller of beauty products for break through into new markets. Avon has called China , the fastest-growing cosmetics market in Asia,its No.1 opportunity and key to its growth prospects.
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In November 2005 Avon announced a four-point turnaround planto restore sustainable growth in business.
Plan builds on:
1. key equities
2. focuses on unleashing the full power of unique brand and channel.
This plan includes:
In total, restructuring initiatives will deliver over $300 million in savings annually, which will be largely reinvested in growth.
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Accelerate world-class product innovation.
Significant increase of investment in product innovation and more than doubling advertising spending by 2008.
Brand-building strategy. Focus on major breakthroughs in Skin Care and Color.
Dramatically improve merchandising excellence andshopping appeal with enhanced brochure and more compelling consumer promotions.
Investment in direct-selling channel and establishing a centrally managed Global Direct Selling function.
Relaunch direct selling in China, largest growth opportunity market.
Realign total cost structure and leverage assetsmore strategically to fuel bigger investments and drive revenue growth.
Implement projects focused on realigning global manufacturing base;
Securing additional supply chain efficiencies in the areas of procurement and distribution processes; and
Regionalizing, centralizing and outsourcingcertain activities and transactional processes.
Become leaner, faster-moving, more empowered organization and increase training and development for employees.
New global operating structure that increases the number of geographic business units.
Flatten the organization and reduce management layers to bring senior leaders closer to markets, and markets closer to Representatives and consumers.
Rename geographic regions to Commercial Business Units, or CBUs, as key commercial strategies.
Empowered Global Business Units, GBUs Brand Marketing and Global Supply Chain.
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Strategy proposal
for Serbian market
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Sources:
Business Intelligence Roadmap: The Complete Project Lifecycle for Decision-Support Applications, By Shaku Atre, Larissa T. Moss , Publishedby Addison Wesley, 2003
www.avoncompany.com
www.youravon.com
www.avon.co.yu
www.nyse.com
www.reuters.com
www.dsa.org
www.colipa.com
www.in-cosmetics.com
www.euromonitor.com