雅芳中国战略分析英文版.docx
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雅芳中国战略分析英文版
Avon(China)StrategicAnalysis
I.Introduction
1.Overview
Avon,foundedin1886inNewYork,theUSA.Atpresentithavedirectlyinvestedin45countriesandregions,withmorethan300millionindependentsalesrepresentativeandoperationsin137countriesandregions,withannualsalesof5.2billiondollars.Morethan20,000kindsofproductsavailable,suchasskincareproducts,cosmetics,personalcareproducts,incensegoods,modernjewelry,femaleunderwear/fashionclothes,healthfood,etc.Itisthelargest500enterprisesofAmerica.
Sincethebeginningof1990,AvonbringitshistoricalmissionandculturetoChina,committingtoshapingauniquebeautyfortheChinesewomen,forthemajorityofChinesewomenopenedthedoortotheircareer.Morethan10years,ChinaAvonhassuccessfulbuiltshopsaroundthenationalsalesnetwork-74branchoffices,nearly6,000salesandserviceoutletsandabout700beautycounters,whicharegivingChinesewomenfrom23provinces,fiveautonomousregionsandfourmunicipalitieshigh-qualityproductsandservices.
2.DevelopmentProcess
January23,1990,Avoninvest27.95milliondollars,joinGuangzhouCosmeticsCompanytosetup“Sino-USjointventure·GuangzhouAvonCo.,Ltd.”
November14,1990,AvonputintooperationinChina.
June15,1998,theoriginalapproachtodirectsalesmainlyofAvonbecomeChina'sfirstapprovalfromthegovernmentrestructuringofenterprises,introductionofthewholesale,retailsalesofproducts.InSeptember,AvonhasbecomethefirstStateoftheMinistryofForeignTradeandEconomicCooperationapprovedbytheshopandemployingasalesmansellingaproductofthesystemofenterprises.
November1998,Avoninvested43milliondollars,inGuangzhouConghuaTaipingIndustrialZonetobuildaproductionbaseofficiallyputintooperation.
May1999,"GuangzhouAvonCo.,Ltd."changeditsnameto“Avon(China)Ltd.”
May1998,AvonsetupaspecialcounterinDongguan;March1999,thefirstAvonProductsstorewasestablishedinGuangzhou;October2000,Avon'sfirstflagshipstorewasestablishedinBeijingDongfangPlaza;in2002,thefirstconceptbatchofAvonShopsinBeijing,ShanghaiandGuangzhouwascompleted.
November2000,Avon(China)begansellingproductsonline.
March2,2006,Avon(China)Co.,Ltd.officiallyannouncedbythestateDepartmentofCommerceawardedthefirstdomesticdirectsalesbusinesslicense.April3,2006,Avon(China)Co.,Ltd.announced:
Launchanationwideconsumeradvisoryservicesactivitiestopromoteitsfullsuccessofthepilotsingle-layerdirectsalesmodel.
Ⅱ.TheExternalEnvironmentAnalysis
1.GeneralEnvironment
(1)DemographicSegment
Chinaisabigcountrywith1.3billionpeople,48.47percentofthemarewomen.Itissuchabigmarket!
Fromtheperspectiveofagestructure,thepopulationaged15-59is897.42million,accountingfor68.70percentofthetotalpopulation,fromtheperspectiveofgeographicandincomedistribution,generallyspeaking,peopleindenselypopulatedareashavehigherincome,sotheirconsumptiondesireandconsumptionlevelsarehigher.
(2)PoliticalSegment
Chinaisacountry,thatisamongthechangesintheruleofmantotheruleoflaw,andwhoselegalsystemisimproving.Thenationactivelyincreasetheintensitytocombatimitations,reducetheadministrativemeanstoregulatingtheeconomy,mainlyusingmarketregulation,andactivelypromoteprivatization,foreigninvestorsarewelcomed.Besides,regionalprotectionismisgraduallyreduced,openingattitudecanattractforeigninvestment,andalsobymeansofpreferentialtaxpolicies.Theintensityofbarriersisgraduallyreducedandeveneliminate.Intheareaofindustry,thenationmakesgreateffortstoregulatethequalityofcosmetics.
(3)EconomicSegment
SincejoiningtheWTO,China'smarketismoreandmoreopen,andonaglobalscaleChinahasachievedremarkableresults.Double-digitGDPgrowthforseveraldecades,substantialforeignexchangereservesincreasedyearbyyear,atthesametime,theinflationrateismaintainedatacontrollablerange,ithastosayisamiracle!
SincetheexchangeratereforminJuly2005,Recurrentitemisreleased,andeconomicexchangeisenhanced.Economictake-offcreatesanumberofwell-educated,highlevelsofconsumptiongroups.
Itisaverygoodopportunityforcosmeticcompany.
(4)Social-culturalSegment
Chinahasalargenumberofpopulations,sotherearelargedifferencesinquality.IntheeveryadministrativeRegion,the"sub-culture"isexisted;asaresult,manythingsarecompletelydifferent,suchascultural,lifestyles,values,aestheticstandardsandspendinghabits.
Womenareemotionalanimals;theyareoftenindulginginatmosphereanddetailswhichcannotsaydirectly.Chinesewomenenjoyelegantandpursueoffashion,thekindofcosmeticofskin-conservationistheirfavorite.
(5)TechnologicalSegment
Continuousdevelopmentofbiotechnologyandaccelerationofinformationtechnologymakethestudyofskinandcolorimprovebetterandbetter.ConditioningmethodsofChinesemedicinehavearousedtheattentionofforeignresearchersandtheyevenusethem.
Allthesesituationsmaketheindustryofcosmeticadifferentiation:
betterorworse.
2.IndustryEnvironment(Five-ForceAnalysis)
(1)ThreatsofNewEntrants
Inthehigh-endmarket:
generallyspeaking,alarge-scaleofcapitalisnecessity,itisalsoahighinputinsalesandresearch.Thehighinputinsalesresultsofahighermarketshareandmaybeafamousbrand.Greatinvestmentinresearchanddevelopmentcanmakeproductsdifferent,andofcourseupgradeextensionorvalue-addedproducts.Itissuchahighbarrierforpotentialcompetitorstoenterinthemarket.
Inthelow-endmarket:
theenterprisesonthismarketneedlesscapitalinvestment,andtheyhavesimilarproducts.Entrybarrierislower,forpotentialcompetitorsitiseasiertoaccesstothismarket.Inthefuture,biological,chemical,beautysalonsmaybetherightdirections.
Withtherequestsofpeople'sattitudetohealthareincreasing,peoplepaymoreattentiontoqualityofthecosmeticsproducts.Asaresult,somepharmaceuticalcompaniesbegantoentercosmeticsindustry,becausetheirbiotechnologyresearchcanbeappliedintheresearchanddevelopmentofcosmetics,whichwillformthecorecompetence.TheChineseherbalmedicinecosmetic,whichismixedwiththeessenceofChineseherbalmedicine,isacombinationoftraditionalandmodern.Thatwillopenupnewmarketterritories.ThecompanieswhichsuccessfullytransformedfrompharmaceuticalcompaniestocosmeticscompaniesareMentholatum,TJOYandsoon.
(2)BargainingPowerofSuppliers
Thesuppliesarescattered,andtheydon’tprovidealargenumberofrawmaterials,asaresult,theirbargainingpowerisweak.Thenewmaterialsforcosmetics,whichmainlyarebiologicalpreparation,biologicalactivityofextracts,naturalplantadditives,isstilltheleadingproductdevelopmentandhigh-techsymbolofthedirectionofthemainstream.
(3)BargainingPowerofBuyers
Consumergroupsaregrowingdaybyday,multi-levelconsumptionpatternshavebasicallyformed.Consumptionontheconceptofcosmetichasbeenchanging,whichhasmadeconsumergroupsincreaselargely,growingfromthepastlimitedtoyoungwomentoyoungandmiddle-agedmen,andevensomeyoungpeopleandinfantsarealsousethem.Consumergroupscontinuetoexpand,whichnotonlychangedtheformofcosmeticsformanyyearstheconsumptionpatterns,butalsopromotetheruralcosmeticsmarket,particularlythelow-endcosmeticsmarket,youngwomeninruralareasarefondofthesethings.
Brandeffectonthemarketisincreasing.Residents'consumptionlevelandconsumptiongradearealsoelevatingyearbyyear.Judgingfromthecosmeticssalesunderthecurrentmarketsituation,high-grade,goodqualityandgoodhealthwithoutthesideeffectsofChina-madefamous-brandcosmetics,Sino-foreignjointventuresbrandcosmetics,theeffectofimportedbrandcosmeticsinthemindsofconsumersincreasinglyshow,thevalueofsalespromotedupsharply,andhavedominatedthecurrentmarketasthemaingrowthpoints.Inparticular,thecosmetics,whichcandelayskinagingandpreventwrinklesappear,promotebloodcirculationtomaintaintheskinvigorandvitality,whosequalityisguaranteed,priceisrelativelymoderate,aremostconsumers'favorite,andonthecontrary,theproductsthatarelow-grade,poor-qualityonthemarkethavenocustomers,andwillbesiftedoutbythemarket.
(4)ThreatsofSubstituteProducts
Temporarily,cosmeticshavenoalternativegoods,butinsidetheindustry,betweenkindsofbrand,ithassubstitutioneffect.DIYisnowquitehot,peoplerespectfornatureandkeenonDIYtocarryoutmaintenance.
(5)RivalryamongCompetingFirminIndustry
①ExistingCompetitorsAnalysis
CurrentlyinChina'scosmeticsmarket,thereareover3,000brands,largelyinhigh-endmarket;foreignjointventurescompaniesoccupiednearly80percentofthemarketshare.Severalinternationalgiants,suchasL'Oreal,Procter&Gamble,Shiseido,Avon,haveformedapowerfuloligopolycompetition,amongwhich,L’Orealhasthelargestmarketshareandthemostpowerful.Theremaininglow-end-market,theprofitisquitescanty,whichisstillcarvedupbythousandsofsmall-sizedandmedium-sizedfirms.However,theinternationalgiantsarecontinuingtoconsolidatethehigh-endmarket,besides,theyhavepowerfullypenetratedtothelow-endmarket.
②TheCostStructureAnalysis
Cosmeticsindustryisascienceandtechnologyindustry,andalsoakindofmodernculture.Intheimpactofthehigh-techwave,thisindustryisalmostafast-changingone.Technologytocosmeticsis