Essay about Avon Calls on Foreign Markets

Migrate from the current 18 annual sales campaign to 26 as per the US model in year 2006.

The economic environment is important as it could have far reaching impacts for an international company. The economic condition of a country, the inflation rate and interest rates largely influence the consumers’ buying power (Kotler & Keller, 2012). Since XYZ conducts its business globally, the currency fluctuation that is often experienced in the global market has a huge impact on the company’s sales. Countries such as U.K where the company operates have relatively stable economies; consequently, the company continues posting profits from sales in those countries.

1. What is competitive advantage, and how does it relate to a company’s business model?

Strong global growths from United States’ companies tend to produce better returns to shareholders. However, the United States has suffered from a slow growth. Therefore global expansion has become an essential strategic support for many companies. Regardless of the risk, uncertainties, other obstacles that come with international expansion, there are rewarding benefits that out shine the risk. Benefits include an overall revenue growth at an accelerated pace, diversified stream of revenue, and improved return on capital. Lastly, international growth is more valuable to shareholders. Not only for the countries whose markets are already developed but also for emerging markets. Many are less developed so increased growth is forecasted to remain lofty for longer periods of time.

Integral to Avon’s brand area are its key resources. Key resources contain conventions, customer events, enterprise awards, cause marketing, scholarships, websites, publications and parties/open houses. Thousands of thrilled, passionate sale representatives attend alongside alongside key administrators, top sellers and operatives alongside an atmosphere of company and fun. On the company side, there are motivational talkers, product and training seminars, product displays, alongside alongside the latest news on all of the upcoming adjustments in produce, association plans and e-commerce. On the fun side, there are celebrities, period displays, raffles and free products. On the weighty side, news considering the cause marketing efforts is relayed but the vibe stays affirmative and energizing.

As far as marketers are concerned, there are few American companies with marketing campaigns that rival those of Coca-Cola and Pepsi. The longevity and prosperity of these two competitors is enough to inspire countless business’ to model their own companies after these icons. This paper will detail some of the business aspects that have helped Coke and Pepsi to thrive, as well as considering what mistakes have been made in their pursuit of success. Learning from the successes and failures of other companies can help a new business to know which roads of marketing, expansion, etc. to explore and which might best be avoided.

Doing business internationally is not the same as doing business locally (Lambert, 2000). There are new, interesting and exciting opportunities that face the management. However, in some cases, there are inevitable challenges. The challenges are more prevalent when it comes to management of risks and keeping the business running (Dally, 2007). To do this effectively, there are significant skills to learn; also it’s necessary to adopt certain strategies and understand the different environments within which the business operates.

Firms should look out for global market opportunities to expand their business into various markets and also to estimate the demand for products and services in various economies. There are many markers that could indicate favorable opportunities for companies to export, invest, source or partner in foreign markets, and these could be promising mixtures of circumstance, locations and timing (Cavusgil et al. 2014). Firms can carry out a global market opportunity assessment to analyze a market’s suitability to the firm. There are six tasks for the global market opportunity assessment. Firstly is the organizational readiness to globalize. This could gauge a firm’s preparedness to conduct international business with an initial assessment, which includes its financial resources and management’s commitment. Secondly is the suitability of products and services for foreign market. Products that sell well in the domestic market might not be suitable to sell in other markets, so firms need to determine how

Ball, D., McCulloch Jr., W., Geringer, J., Minor, M., & McNett, J. (2005) (11th ed.) International Business: The Challenge of Global Competition. McGraw-Hill.

1. Referring to this chapter and chapter 9, evaluate Avon’s Strategic International Human Resources practice in global market regarding development of a global management cadre, HCNs, and building company associates and independent representatives in host countries.

Word-of-mouth from previous customers helps to introduce the products to others - friends, families, or social groups. Also, selling in global markets with less competition has promoted Avon’s competitive advantage. Global branding enables Avon to gain loyal customers that are proud to associate with the company’s international brand. Customizing products, prices and language to meet local needs enables customers to consider their needs fulfilled, further promoting Avon’s brand loyalty. Use of celebrities such as Salma Hayek in marketing enables Avon to have more customers that like to emulate the celebrity. Avon’s production, market penetration and distribution strategy enables it to sell to a wider market while having minimized costs of production, which is good for profits.

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.

Companies are constantly reinventing themselves in the name of profit. International business strategies are one form by which companies are able to successfully compete. There are numerous strategies capable of generating abnormal profits or taking a company into bankruptcy. The spectrum holds no magic formula as a variety of resources and capabilities is necessary to successfully compete. What works or is frowned upon in one market can become a cash cow in another. This was demonstrated by Lenovo, who has continued to grow despite declining sales in the U.S. computer market. Their ability to grow has been driven by capturing share in emerging markets such as China (Gupta, 2012).

He goes on to imply that business must make global strategies that would involve making investments in as much countries as possible. Rajdeep, Murali & Robert (2008) agrees with Tallman, as he extends his view that these strategies must become more flexible and effective to comply with needs of the changing environment.

In what way does Avon follow a global strategy? Does this experience indicate that it should pursue a different strategy? Avon pursues economies of scale by choosing facility location that minimizes the cost of manufacturing, logistics, etc, and it does so on a global basis. Avon also limited product variations which save the company from spending extra money and it also balances the cost-saving potential of standardization with responsiveness to individual market needs in pursuing both profits and market share. With $4.8 billion in sales each year and 65% of the sales coming from abroad, it’s clear to see that Avon does not need to change its overall