|Type of paper:||Essay|
|Categories:||Leadership analysis Organizational behavior Business management|
Avon Products is in the midst of a managerial change, and it stands to be seen whether the incoming manager, Sheri McCoy, will be a success. The company announced that Andre Jung would be stepping down as CEO in 2011after the company was hit with a raft of challenges, including bribery allegations. McCoy is faced with the uphill task of restoring Avon to its former glory as an iconic brand and a global leader in direct sales.
Sheri McCoy is the right person to guide Avon through this path of recovering its lost glory. She is a Dartmouth graduate with a master's from Princeton and an MBA from Rutgers. She was at Johnson & Johnson for 30 years before landing the opportunity to spearhead the revitalization efforts at Avon. Sheri served in the consumer and pharmaceuticals business Executive Committee in the capacity of Vice Chairman. The pharmaceuticals and consumer divisions are responsible for 60% of the revenues at Johnson & Johnson, which shows that she is experienced in running the core part of a global corporation. Sheri has also led organizational reinventing, integration, and restructuring efforts at Johnson & Johnson hence she knows what it takes to instigate fundamental changes to improve the performance of a corporation. When she came on, she worked with Jung, who was retained in a consultancy capacity. She also engaged other representatives during a world tour to familiarize herself with all aspects of the company. It shows that Sheri is ready to work with others to find the best solutions for the firm. These qualifications set her apart as a qualified and highly capable CEO.
The activities of Sheri McCoy are going to bring significant improvements at Avon as it looks into the future. The announcement to downsize by slashing 1500 jobs and pulling out of the Vietnamese and South Korean markets imply that the operating expenses are reduced. During a restructuring like this, it is best to limit the bleeding of funds by eliminating inefficiencies. These markets are not major contributors to the revenues of Avon and hence it is wise to concentrate efforts, and money, in the high priority markets. Further, exiting Africa, Europe, and the Middle East will save about $400 million which will be reinvested in other areas.
Sheri plans to invest $200 million in updating the company's information systems to embrace social and digital media as contemporary selling outlets. This move will give the company access to a broad market at a significantly low cost of customer acquisition compared to media advertising. The pull strategy previously employed by Jung proved to be quite costly, which is counterproductive. The future is going digital as more consumers gravitate to this platform. Investing in digital and social media will boost sales now and in the future.
The global corporate strategy under Andrea Jung led to the standardization of products, which made it difficult to optimize the potential of local markets. Avon will adopt a localized strategy under Sheri McCoy, where the company will manufacture products to match local tastes and preferences. It is vital to address the cultural and ethnic differences in the various country Avon operates since it competes with local firms. Different geographical regions and cultures have diverse cosmetic requirements, and hence localization will help in identifying them and using the information to tailor products accordingly. This strategy will minimize wastage, uncertainty, and increase the revenues. Evidence of this improvement is seen in Russia and Brazil where it recorded sales increases of 3% and 10% respectively in the first quarter of 2013 after responding to local preferences.
Sheri McCoy will be an excellent fit for Avon, and her initial actions have proved that she is keen to reduce the unnecessary operating expenses by shaving the deadweight. Targeting high priority markets and online marketing will result in cost-efficiency and increased revenues.
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