Business 497A - Strategic Management System » Summer 2023 » You Make the Decision Avon Ch 10.

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Question #1
During collaboration with the Board of Directors there are two options that seem viable. One option is to focus on satisfying the needs and wants of the sales representatives and customers. This idea has a lot of traction because all of the board members agree that a larger focus on customers and representatives would increase sales as they are the true drivers of the company. This is much like the priorities of David H. McConnell, the founder of Avon. The other option is to focus on the goal of satisfying shareholders by focusing on profitability. This option has its opponents and supporters as well. Which option is aligned with the goal of bringing Avon back to its core mission and values?
A.   Satisfy sales representatives and customers
B.   Satisfy shareholders
Question #2
The Board is pleased with your decision and wants to know exactly how you will prioritize Avon’s efforts and resources. In Avon’s history, sales representatives have been priority number one and the selling of beauty products second. The majority of the Board believes this solution is perfect. But times have changed, and the customers have different needs. Some members of the Board wonder if customers need more focus rather than the sales representatives. Which choice is most closely aligned with the company’s stated goals?
A.   Prioritize sales representatives
B.   Prioritize customers
Question #3
The Board of Directors is excited to hear this news and wants to know the strategy of how Avon will serve the needs of the sales representatives. One suggestion is to give even more incentives for successful sales. This can be done by increasing incentives and commission rates. The associates have been demanding higher commission rates for a number of years, and they should respond well to the news. Another way to prioritize representatives is to give them more product options to sell. An increase in variety may fill voids on sales that were lost because there was no product to meet customer needs. This will require a considerable investment in research and development. Which strategy do you think will better empower Avon’s sales representatives?
A.   Invest in R&D and provide more products to sell
B.   Increase incentives and commissions
Question #4
The sales representatives have responded very well to the incentives and are extremely motivated. They are more active in their selling and sales revenue is trending up. However, the representatives have voiced concern. They feel that they could be earning more with a few tweaks. You explain this to the Board and deliver two options. One option is to raise the price of the current collection to gain a higher margin. The other option is to cut some products and focus on product rationalization, making sales a simpler process for the sales representatives so they can serve more customers within the same timeframe. This will have a focus on the core products that have been tried and true throughout the history of Avon. Which direction is more likely to assist the sales representatives in their efforts to increase sales?
A.   Higher prices
B.   Product rationalization

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