I. BACKGROUND OF THE COMPANY
Avon was founded in year 1886 by a New York book salesman named David H. McConnel and it was originally known as California Perfume Company. McConnell immediately began to build a door-to-door sales force for his new company and hired Mrs. P.F.E albee as its first sales agent. Its first office located in New York. By 1906, CPC had 10,000 representatives and selling 117 articles in 600 styles and package sizes. Montreal, Canada. In 1937, David Jr. became the president of the company and he changed the name to Avon Products Inc. in 1938 after the British town, Stratford-upon-Avon. Among the earliest products offered under the brand name Avon were a toothbrush, talcum and a vanity set. Now, the company home office moved to Fifth Avenue, New York. Since then, after 1950s, the company had expanded its business to Puerto Rico, Venezuela and in 1970s, expanded to Japan. In 1979, Avon purchased the jeweler Tiffany’s to add varieties to its line of products. In 1990, Avon became the first manufacturer company to stop using animal testing in its products. Now, Andrea Jung has become the first woman to be Chairman in 2001 and CEO of Avon since 1999.

Avon Products Inc. is a cosmetics, accessories, and home products manufacturer and marketer. It has a greatly expanded product line that includes jewelry, wearing apparel, and home decor items. It now operates in North America, Latin America, Europe, the Middle East, Africa, the Asia Pacific, and the People's Republic of China. Avon is one of the diversified cosmetics company in USA and they have implemented several strategy in order to attract more customers for their products. They have the best strength i.e. channel of distribution, loyal customers and the marketing segment which contribute more on the success of sales. However, they have certain problems such as bad-debt, new trend for green products and their not so good homey image. Avon need to implement the strategic plan laid out in this study if they are going to remain relevant to their loyal customers and simultaneously keeping a good reputation and making their name synonymous with glamorous image and good quality products. II. STATEMENT OF THE PROBLEM
There Avon uses a weak selling strategy that results to a poor market attraction and higher debt ratio.

III. OBJECTIVES a. To strengthen direct selling strategies and reaching markets globally through online advertising. b. To invest on Research and Development ‘green” products. c. To increase internal financing by issuance of new shares to lower debt ratio.

IV. MACROENVIRONMNETAL ANALYSIS
Political analysis a. Trade restrictions and tariffs are different forever country hence lead to high/low variable costs. b. Political stability is an important factor when thinking for diversifies. c. Tax Expense was increasing
Economic Analysis
Moving work to countries with low labor cost. In cosmetics Industry the products tend to be countercyclical. Demand for such products normally remains constant and unaffected by economic distress. In the first two quarters of 2009 negative impact of currency exchange has been noticed due to foreign exchange pressure. Social analysis
AVON focuses on environmental management practices. Manufacturing plant in Mexico received the Clean Industry Certification from the federal Environment Protection Agency in 2008 Focusing on reduction of GHG emissions in the company’s logistics and operations.
Avon Foundation for women: working for the betterment and well-being of Women’s health and empowering them to achieve economic independence.

Technological Analysis
Research and development (R&D) is essential in order to improve refines and to launch new products. A growing trend in the cosmetic industry is the introduction of “Green products”. Technological advancements are important to attract more customers through use of high-tech media and innovative marketing campaigns.

V. INDUSTRY ANALYSIS EXTERNAL ASSESSMENT | 1. THREATS | a. Foreign Economic & Currency Issues b. Rivals and Competition c. High Operating Costs d. Recession/ National Economy e. Changing Tastes and Trends | 2. OPPORTUNITIES | a. Expand Product Line b. Retail Chain Stores c. Department-Store Sales d. International Markets e. Technology f. Customer Satisfaction |

INTERNAL ASSESSMENT | 3. WEAKNESSES | d. Internal Operating Problems e. Obsolete Products f. Focused Product Line | 4. STRENGHTS | a. Strong Advertising and Promotion b. Globalization c. Brand Name Recognition d. Product Innovation e. New Product Developments f. Competitive Capabilities | The Avon belongs to a cosmetics industry. Avon used focused cost strategy in a sense that this strategy does not necessarily charge the lowest prices in the industry. Instead, it charges low prices relative to other firms that compete within the target market. Avon also used focused differentiation in way that they improved their product to have unique features to fulfill the demand of the market.

VI. ENVIRONMENTALANALYSIS

PORTER’S FIVE FORCES MODEL
THREATS OF NEW ENTRANTS IS LOW
THREATS OF PRODUCT SUBSTITUTES IS LOW

BARGAINING POWER OF BUYERS IS LOW
BARGAINING POWER OF SUPPLIERS IS LOW
INTENSITY OF RIVALRY AMONG EXISTING COMPETITORS IS HIGH
THREATS OF NEW ENTRANTS IS LOW
THREATS OF PRODUCT SUBSTITUTES IS LOW

BARGAINING POWER OF BUYERS IS LOW
BARGAINING POWER OF SUPPLIERS IS LOW
INTENSITY OF RIVALRY AMONG EXISTING COMPETITORS IS HIGH

VII. ALTERNATIVE COURSES OF ACTION 1. Decrease debt ratio through increasing internal financing by issuance of new shares. 2. Strengthening direct selling strategies and reaching markets globally through online advertising. 3. Investing on Research and Development of “green” products. 4. Factoring of receivables. VIII. RECOMMENDATIONS
Among the alternatives presented above, the second alternative is the best possible solution. Strengthening direct selling strategies will help the company to increase its market price per share. Direct selling is one of the core competencies that the Avon Products Inc. has. The company is the world’s largest direct seller with 5.4 million Avon representatives in over 100 countries. Avon’s business model provides for the company to sell its products to its representatives on credit, so that for most part, the representatives do not pay the company until they get paid by their customers. For promoting direct-sales through consumer and the business; one is to offer incentives to its customers and second is to motivate the business to promoting its products by advertisements, establishing sales competition for employees, participating in conventions, personal and entrepreneurial skills development trainings.
Promoting Avon’s products and high chance of increasing direct-sales is to offer incentives to its consumers. Incentives provide a positive motivational influence to encourage and excite buyers to buy the products. Such incentives, appropriate for this situation, are coupons, rebates, product samples and awards. Coupons can be attached in mail, beauty magazines, newspapers, and advertisements on mail or on the internet company’s official website. Rebates can be offered also to attract more buyers to buy the products. Rebates can be advertised also on coupons through mail or the internet.
Another successful way of attracting consumers is by offering samples of Avon’s cosmetic products, which can be done door-to-door or attached on an advertisement through mail. Finally, awards through prizes and contests can offer consumers the chance to win something small or big like cash or free-trips. Also, prizes can be offering a free gift whenever a consumers purchase one of Avon’s products.
Motivate the Avon business to reach its goals of promoting its products and gaining sales through advertisements, sales competition and participating in conventions. Advertising is the key to attracting consumers and the outcome is high sales. Such advertisement is done through media (television), mail, or the internet. The more awareness from the public of the company likely to attract more buyers and the outcome is high sales.
The next strategy is to encourage Avon’s sales representatives with awards/prizes that reached their sales goals within a period of time. Another is participating in conventions and this is more likely to increase sales through direct contact with customers.
Another is to provide regular training to representatives that will help to further develop their communication skills and entrepreneurial abilities which could contribute in increasing the company’s sales. These programs should include proper product usage, policies to be implemented like credit and collection policies as well as recruitment benefits they may get in conducting the business.
Through these strategies, sales can be increased thereby increasing profits as well. As profit increases, the company’s earnings per share will increase thus enabling them to declare higher dividends. Higher dividends normally, give confidence to potential investors attracting them to purchase more shares. Having new investors will help increase the market price per share that will have a big impact on the maximization of shareholder’s wealth which is the ultimate goal of the company. New investors give the company enough funds that they can utilize for future use.