Essay on Mary Kay to Italy

8886 Words36 Pages
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COUNTRY MARKET REPORT
MARY KAY TO ITALY

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EXECUTIVE SUMMARY
Mary Kay, a corporation created and run by women, sells cosmetics and skin care products worldwide. The impact on the skin care and cosmetic industry has proved to be impressive at US $2.5 billion on an international level in 2010. Mary Kay’s headquarters and primary manufacturing facility is located in Addison, Texas. The corporation operates on a multi-level marketing structure, while implementing direct selling methods through hired beauty consultants. Mary Kay has enjoyed global expansion over the past 25 years in countries throughout Europe, South America, and Asia
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In 2008, as a result of the strain from the global economic recession, Italy suffered an economic decrease of 1.3% and followed in 2009 with a further decrease of 5.2%. Meekly entering a phase of economic recovery, Italy recorded a growth in GDP of 1.3% in 2010. Economic forecasts for future growth anticipate that Italy will continue to recover, albeit very slowly, and at a rate that is less than that of growth expected in the rest of the EU (U.S. Department of State, 2011). One must add, at this point, the most recent developments in the European debt crisis, particularly affecting Italy, are creating additional uncertainty for these assumptions. Mary Kay must consider whether Italy’s historical growth trends, as well as sluggish economic forecasts for the future, are significant enough in terms of sales and profit potential to warrant entry into this market. The business model, which relies on direct-selling to consumers, requires constant growth in order to garner continued interest from potential Independent Beauty Consultant candidates. The ability of Italy’s economy to produce enough wealth in order to allow for consumers to direct discretionary income towards purchasing Mary Kay’s beauty products is a vital component in
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