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Pestel Analysis

Autor:   •  August 3, 2015  •  Essay  •  1,627 Words (7 Pages)  •  1,973 Views

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  1. Introduction


This report uses Avon as the case study. Avon Products Inc. was founded in America in 1886 with its own approach selling woman’s cosmetics to enhance the beauty of women. This business idea was initiated by David McConnell from New York. The main trading business is not perfume and creams but at the age of sixteen McConnell started selling books through door to door sales. He found he was unable to attract users to buy books so he started a campaign by offering free gifts such as perfumes are produced with the cooperation of the pharmacist. Subsequently this turned out to be an incentive to become a major shipping product to Avon and the books was abolished, paving the way for the existence of Avon cosmetics. Door to door sales were made specifically for the specification and then by 1887 McConnell hired about 13 women representatives. In addition, with the passage of time the company began to grow and the name was changed from California cosmetic company Avon Products, Inc. currently ranked first in the nation in the cosmetic industry with high incomes.

The brand is now a global leader in large-scale growth and high income. As the world's largest direct seller, Avon has captured a large market in over a hundred countries with millions of sales representatives worldwide. Avon's product line is quite large in phase space; it includes beauty products, fashion jewelry, clothing and other. Avon sells its brands in areas such as North America, Latin America, Europe and Asia Pacific (Avon Company, 2015)

This report will basically conduct a strategic management analysis for Avon based on PESTEL analysis and Porter’s 5 Forces.

  1. PESTEL analysis
  1. Political factors

The political factors refer to the government legislation and changes in trade restrictions and tariffs.

Consumer protection conditions which also known as Distance Selling was recently came out by UK government. This is to make sure those online consumers who have no direct control by the dealer have a protection. This regimentation will only be effective to those consumers who buy goods or services from the dealer. It is not effective towards the business-to-business deal, purchase of property, purchase through vending machine and purchase through bid. Avon using a website to market their products around the world and that they follow the basic rights of the United Kingdom.

No one is treated in a different manner on the basis of their genders, age and religion. Every Employee may it be a male or female engaged in business if does not get their rights and employers fail to equally balance them can be fired and dismissed.

  1. Economic factors
    The main factors that influence consumers to buy Avon products is rate conditions, inflation and their economic interests.

Avon gets affected by fluctuations in currency rates. Avon has taken about 5.3 million representatives and this leads to the free and actively cosmetics market to sell and purchase Avon products.

  1. Social factors
    Social-cultural factors include attitudes, values, beliefs, behaviors and typical regional demographic trends.

Countries in different climatic and environmental conditions will praise the different cosmetic products for their people and this is a big concern for Avon to reach the goals that not only contains values and similarities between different clients but also to respect their needs and make a difference. The objective of Avon is to serve women throughout the world with its products to achieve the same ideals them - look their best at all places at all times.

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