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WIKI ANALYSIS
Avon (NYSE:AVP) makes beauty and personal care products, including various types of cosmetics - lipstick, eyeliner, mascara, basically anything that would make a wonderful Mother's Day gift - apparel and accessories, and home and decoractive products. Avon's products face intense competition, from companies like Estee Lauder Companies (EL) and Revlon (REV), in all of its markets from both global and regional mid-end brand personal care products. To combat competition and improve brand recognition in US and global markets, Avon launched a Turn-around Plan in that included strategic initiatives to reduce costs, increased advertising spending, improve product quality, and improve sales profitability.
While the majority of Avon's competitors distribute their products to resellers such as department stores, drugstores, or cosmetic stores, Avon sells its products solely through its direct-selling channel of independently-contracted Active Sales Representatives and through its online website. However, the company's direct-selling business model is at risk for incurring more costs due to Representative dissatisfaction and global legal restrictions. Due to the company's reliance on its direct-selling business model, earning potential and satisfaction of its Representatives and maintaining its business model are essential for the company's success in global markets.
Company Overview
Avon produces and sells consumer packaged goods worldwide through its direct selling boutique store channel and its online channel.
Business Segments
Avon's revenues come from three main categories:
- Beauty (79.0% of net sales): cosmetics, fragrances, and personal care products.
- Fashion (17.0% of net sales): jewelry, watches, apparel and accessories.
- Home (11.0% of net sales): Home products and decorative products.
Business Growth
===FY 2010 (ended December 31, 2010)[1]
