oraine BUSI 101 – Case 1 Avon’s Troubles

oraine BUSI 101 – Case 1 Avon’s Troubles

Subject: Business    / General Business
Question
[Type text]
Cases: MG 800, Winter, 2017
Case 1: Avon’s Troubles
Avon is facing some very bad news. Its stock is down. Consumers are shifting to online
and away from the personal touch Avon built over the years. Their products may not be
so exciting now that so many products are available online and in stores. Senior
management has had a hard time moving the company forward.
Your task is to recommend a STRATEGIC solution for Avon. You need to find out (from
research) the following: What is Avon’s strategy? Good to look at class notes and the text!
What should it be? The same? Something different?
How can you show that your solution makes sense?
Be specific. Companies in trouble do not appreciate vague ideas and superficial
recommendations. You must first understand the situation by reading articles in The Wall Street Journal and
other publications. This situation calls for a clear STRATEGIC plan. Hence, you cannot
take the view that the situation is too complex or that you do not have enough
information. That would be unworthy of an MBA candidate!
Here are some major issues to consider:
1. The company has been losing money for years but generates decent revenue. Top
management is frustrated that they have not been able to turn things around.
2. Avon is thinking about working with – selling part of itself – to a large private
equity firm. But top management fears this will not improve the company’s
reputation or profitability. It may break even financially, but will not expand
products or markets. Overall quality may decline.
3. The company seems unwilling or unable to make an online splash. There may be
good strategic reasons for this. Any recommendation regarding online must be
thought through carefully.
4. Avon has had some success stretching its selling approach to other product lines.
But its financial woes make further expansion of this kind more difficult.
5. This is a course in strategy. The solution to all cases must be strategic not
operational. Therefore, pumping more money into the company, which they do
not have, or developing a marketing plan will not suffice. Students must apply
concepts from the course – both the class discussions and the text.
Further Instructions:
There are many issues to look at in this case. You must read about the topic and
formulate a credible “solution” that will please top management of. MG800 Cases Winter 2017 1. When you identify a solution, evaluate all alternatives. Select one – the best –
alternative and develop a comprehensive plan to carry it out.
2. Be specific. Give facts. Do not rely on opinion. Quote credible sources.
Don’t use expressions such as “People say…”
3. Use the Problem—Solution —Benefits format to solve the problem. Do not
create a paper that merely describes the problem. Your problem description
should not exceed one page. Do not waste time defining the problem or the
history of the company as told in Wikipedia. You must SOLVE the problem.
4. Write, rewrite and proofread the paper for excellence. Include a specific
bibliography. If you quote from a source, show that you are quoting.
5. Papers must be turned in on the due date. They must be typed, proofread
and must contain a bibliography of works cited. Failure to turn in on the
scheduled date will incur a penalty.
6. Papers that are turned in but do not earn a grade will be returned to the
student. The paper must be resubmitted in two weeks following the guidance
provided by the Instructor.
A few tips for sharp MBAs:
1. Remember that you are working for company management. Do not set yourself
up as smarter than they are. Do not fall into the trap of telling them to shift to
online. This would not be smart or strategic. They do not have the money or skill
for such a shift.
2. Avoid expressions such as “I think” and “I feel.” This is a Master’s level course in
a business program. Personal feelings are less important than FACTS and the
ability to protect the company.
3. Read over the case several times. Begin to work on your paper well before the
deadline. It would not be a good idea to react to the case. Think about it;
understand the issues involved. Make sure your final product takes into account
the issues that Avon executives are worried about. Use feedback from case 1.
4. This is a course in Strategic Management. In a course on strategy, the cases you
are asked to work on deal with strategy. Apply strategic concepts from class
discussion and from the textbook. As you work on your solution, ask yourself if
you are taking a strategic approach.
5. It is strongly advised that students grasp the central problem in the case. This is
the single most important issue the company is facing. Maybe they should provide
cheap fragrances or cheap refills. But this is not the central issue for a multibillion dollar international corporation that is worried about its future.
6. Keep these ideas in mind for all papers in the course including the Integrative
Project. 2

Write 3-4 pages with reference on clear STRATEGIC plan of AVON company.