Business Intelligence Concepts IIM/EURO MBA Studies Presented by

Business Intelligence Concepts
IIM/EURO
MBA Studies
UBI - Business
Intelligence Concepts
Presented by:
Presented by:
Ivana Rajkov
Aleksandra Simsic
Ljiljana Radanov
Miroslav Pajic
Radomir Cupara
Milan Djeric
Identity
Geography
Finance
Market trends
Value and ethics
Distribution
Customers
Competitors
1 Identity
Women have been selling
Avon since 1886 - 34
years before women in
the US won the right to
vote!
Avon is the largest direct
selling beauty company in
the world.
Avon
1886
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 method
First product produced called the Little Dot Perfume Set included five fragrances
1896
First catalog issued
1897
First laboratory built in Suffern, NY
1905
First print ads published in Good Housekeeping Magazine and First color catalog
1914
First international office opened: Montreal, Canada. Manufacturing starts in 1915.
1939
California Perfume Company name changed to Avon Products, Inc.
1953
First television advertising launched.
1964
Avon listed on New York Stock Exchange, trading starts April 20.
1972
First time sales top $1 billion.
1986
Avon celebrates its centennial: 1886-1986
1989
First major cosmetics manufacturer to announce a permanent end to animal testing.
1991
Avon becomes the first beauty company to bring the alpha hydroxy (AHA) technology.
1992
Avon U.K. launches the company s first women s health care initiative to raise funds and
awareness for breast cancer.
1993
Avon launches its first women's health care initiative program in the U.S. with the
"Breast Cancer Awareness Crusade".
1998
First Avon Running Global Women s Circuit - Avon Breast Cancer 3-Day fundraising walk.
1999
First ever global advertising campaign themed 'Let s Talk'
2000
Avon signs tennis greats, Venus and Serena Williams, to be the company s
First global celebrity spokespersons to promote Avon
2004
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 Hayek
2005
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.
GLOBALLY
TRUST
RESPECT
BELIEF
HUMILITY
INTEGRITY
OURGUIDING
To provide individuals
to earn in support of their well-being and happiness.
To serve families throughout the world with products of the
.
To render a service to customers that is outstanding in its
To give
depends.
backed by a
and
to employees and Representatives, on whose contributions Avon
To share with others the
.
To meet fully the obligations of corporate citizenship by
To maintain and cherish the
.
A focus on
as a key driver of sales growth,
New product lines such as
.
Further expansion of
A career opportunity for
products and
,
,
Exploration of geographic opportunities, in particular
Within the following discussion and analysis, we utilize the key performance indicators ( KPIs )
defined below to assist in the evaluation of Avon business.
Product categories, include:
which consists of cosmetics,
fragrances, skin care and toiletries;
$100 million state- of- the art Research and
Development Center in Suffern, New York
which consists of:
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
.
High
Legend:
1 Avon Beyond Color,
Anew, Mark, Avon Solutions,
Skin So Soft, Avon Wellness,
Advance Technique Hair Care
1
Beauty
2
Beauty
Plus
Net Sale
Growth
2 Watches, Apparel,
Accessories.
3 Home products and
Gift&Decorative products.
3
Beyond
Beauty
Low
High
Net Sale by Brand share
Low
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.
Geography
Bosnia
France
Italy
Portugal
Spain
Bulgaria
Germany
Latvia
Romania
Turkey
Czech Republic
Greece
Lithuania
Russia
Ukraine
Croatia
Hungary
Macedonia
Slovakia
United Kingdom
Estonia
Ireland
Moldavia
Slovenia
Finland
Israel
Poland
South Africa
Serbia &
Montenegro
Canada
Dominican Republic
Puerto Rico
United States
Mexico
Venezuela
Australia
Paraguay
Chile
Argentina
Hong Kong
Peru
Bolivia
Avon s
Indonesia
Japan
Uruguay
Malaysia
Brazil
New Zealand
Central America
South Korea
Chile
Ecuador
global markets
Taiwan
Thailand
Finance
AsiaPacific,
Pacific,total
totalrevenue
revenue
InInAsia
wasconsistent
consistentwith
withthe
theprior
prioryear
year
was
asdeclines
declinesininChina
Chinaand
andJapan
Japan
as
wereoffset
offsetby
byincreases
increasesininnearly
nearly
were
allother
othermarkets
marketsininthe
theregion.
region.
all
In Latin America, total revenue
In Latin America, total revenue
increased in 2005 with increases in all
increased in 2005 with increases in all
markets in the region, except Mexico.
markets in the region, except Mexico.
The purchase of licensee in Colombia
The purchase of licensee in Colombia
favorably impacted the region s revenue
favorably impacted the region s revenue
growth by 2 points.
growth by 2 points.
points
In late February 2006, Avon was granted a direct selling license by China s
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
Ministry of Commerce. That license will allow Avon to commence direct selling in
China under the regulations issued by that government in late 2005
China under the regulations issued by that government in late 2005
4
Market Trend
Actualand
andForecast
ForecastGrowth
Growthof
ofthe
the
Actual
Cosmetics&ToiletriesIndustry
Industry
Cosmetics&Toiletries
4,50%
Sales will exceed
, an average annual
increase of 2.9% from 2002.
4,00%
3,50%
3,00%
2,50%
2,00%
1,50%
1,00%
0,50%
0,00%
1997
2002
2007
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.
Sale by product class, 2005
Percent of Sales by Major Product Groups
Personal care products
(cosmetics, jewelry, skin care, etc.)
Home/family care products
(cleaning products, cookware, cutlery, etc.)
Wellness
(weight loss products, vitamins, etc.)
30.8%
30.5%
16.1%
Services/other
14.3%
Leisure/educational
8.3%
(books, videos, toys, etc.)
The U.S. cosmetics and toiletries market has experienced growth for 11 consecutive
years, 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.
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
5
•
Value and ethics
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;
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
adequately substantiated.
are
Breast Cancer Programs
Women s Empowerment Programs
Speak Up Against Domestic Violence
Avon has one of the most compelling consumer sales channels in the world.
INVESTING IN SALES
REPRESENTATIVES
Sales Representative Earnings
Training
Recognition and Awards Programs
Area
Zone and
District managers.
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.
All others
9%
Salons
5%
Speciality stores
8%
Department stores
16%
Mass
merchandise
27%
Drug stores
18%
Direct sale
17%
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 retail
strategies 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.
80%
60%
70%
50%
60%
40%
50%
40%
79,90%
30%
54%
30%
20%
20%
20,10%
10%
0%
8%
14%
65+
55-64
0%
Female
Male
35-54
18-34
35%
80%
35%
70%
30%
60%
50%
25%
40%
23%
10%
32%
24%
20%
76%
30%
15%
20%
10%
5%
18%
0%
Married
Other
Single
10%
5%
8%
0%
Som e college,
technical or
trade school
High school
graduate or
less
Postgraduate
College
Graduate
Avon 2005 Global Women s Survey
More than half of women say the first thing they would do when signs
of 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.
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 their
overall appearance
buying
make-up
30%
hair done
40%
eating out
30%
36%
Get plenty of sleep
Facial Skin care routine
38%
Exercising
38%
49%
Drink plenty of water
51%
Eating healthy
Race against time" and skin care
Globally, 95 % of women say that they have not had any
cosmetic surgery.
lack of
interest
33%
High cost
40%
Concerns
about the risk
27%
0%
10%
20%
30%
40%
50%
60%
Procter&Gamble
16%
All others
37%
L'Oreal
20%
Limited Brands
5%
Avon
13%
Estee Lauder
9%
Company
Rank
Revenue
Rank
Employees
Rank
Growth
Sales
Avon
Produtcs
Colgate
Palmolive
Estee Lauder
Shiseido Co.
Ltd.
ColgatePalmolive
Estee
Lauder
Avon
Shisheido
Rank
Profit
Margin
Rank
Market
Cap
4-point turnaround plan
to restore sustainable growth
45%
25%
40%
35%
30%
20%
41%
15%
25%
20%
10%
15%
23%
20%
10%
12%
13%
5%
14%
5%
7%
7%
0%
0%
Nivea
Avon
Dove
Oriflame
Nivea
Avon
Dove
Oriflame
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
50%
45%
40%
35%
30%
49%
25%
20%
28%
15%
10%
14%
5%
6%
0%
Nivea
Avon
Dove
Oriflame
SWOT analysis
Untrained selling personnel in som e
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 determ ines
markets
Included sales shortfalls in China and
deceleration of growth in Central and
Eastern Europe, as well as Latin America
Continuing of spreading production
selling program
under penetrated in the market at mid-tier
price segments
Cooperation with competitive companies
in humanitarian actions
Spreading of selling network
Growth on Central & Eastern Europe
Development of education for employees
Perfecting new keys of selling
Developm ent of products for wom en of
other races according to their skin types
Perfection alternative for estetic hirurgy
SWOT analysis
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 custom ers from
USA
Aggressive competitor's marketing
Well educated staff from com petitive
companies
Launched m arket actual product from
competitive retail network well developed
Global economic recession
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 com panied
to competition
Motivating discounts for costmors
Motivating extra earnings based on
increased volume of sales
1.
2.
3.
4.
5.
6.
Product innovation
Simplifying business system
Harmonizing process
Increasing shared service centers
Reducing total number of products
Hold fixed costs flat to down
Under penetration of mid-tier brand price segments.
Innovation of anti-aging technology formulated at mass price point
Acceleration 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 markets
Commercial 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 Chain
Reduce 50% of layers
Reduce number of management positions by 20%-30%
Sales %
50
AVON
40
YVES ROCHER
MARY KAY
30
AMWAY
20
NU SKIN
10
HERBALIFE
0
0
50
100
COUNTRIES
150
200
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.
In November 2005 Avon announced a four-point turnaround plan
to 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.
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.
Investment in direct-selling channel and establishing
a centrally managed Global Direct Selling function.
Relaunch direct selling in China, largest growth
opportunity market.
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
Marketing and Global Supply Chain.
Dramatically improve merchandising excellence and
shopping appeal with enhanced brochure and more
compelling consumer promotions.
Brand
Realign total cost structure and leverage assets
more 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 outsourcing
certain activities and transactional processes.
Strategy proposal
for Serbian market
Sources:
Business Intelligence Roadmap: The Complete Project Lifecycle for
Decision-Support Applications, By Shaku Atre, Larissa T. Moss , Published
by 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