Which of the approaches (portfolio and core competence) to corporate strategy would fit best for an organization like Avon? Are all organizations competitive? If so why? How might you be able to synthesize the two approaches to corporate strategy?
4 Answers | Add Yours
On the question of competitiveness, one of the advantages of Avon has always been competitive convenience. Many who purchase cosmetics purchase from Avon because the product comes to the buyer. The buyer has the advantage of trying the product in their own home before buying and is saved a trip "to town" to do their shopping. Remember that Avon (1886) was strengthened when suburbs in America began: after World War II; Avon bridged the remoteness and isolation of the suburbs by connecting "town" convenience with suburb living. The Internet does this today thus reducing some--or much--of Avon's (and Mary Kay's) competitiveness, so they may not be as competitive as other cosmetic corporations. (Although, of course, Avon now has an Internet presence of its own, though Internet transactions limit Avon's in-person experience.)
The other posters agree, and so do I. If your product is demonstrably superior, people will be more likely to buy it again. In-home demonstrations are more rare these days. People do not want to let strangers into their homes, which is one reason infomercials are so effective; instead of giving a stranger access, you just watch the duplicate demo on your TV, and there you are! However, infomercials are set up for success, and can't be fully trusted. In-home demos are much more informational because you can ask direct questions and try it for yourself. I think the demonstrable quality of the product is more important than the variety.
As regards competition, Avon has to be competitive with other organisations because it does not have the same presence through its lack of stores. As #2 highlights, what it needs to focus on is the quality of products so that people will want to buy them from salespeople rather than go to a store to buy them.
As I understand it, Avon works by contracting out sales to individuals. Avon does not have stores per se. Its salespeople are kind of small business owners. Since Avon cannot control every little thing these contractors do, I would think it would be best to focus on core competency and make sure that their products are the best out there, so that the products basically sell themselves.
We’ve answered 318,945 questions. We can answer yours, too.Ask a question