AVON Products, Inc.

Key External Factors Opportunities 1. Introduction of green products which is a growing trend in the cosmetics industry. 2. Cosmetic industry tends to be countercyclical the industry for which the demand is not correlated with the business cycle. 3. Aveda cosmetics found that sixty eight percent of consumers will remain loyal to a company that has a social and environmental commitment. 4. Urban trendsetters markets 5. Geographic growth enormous growth opportunities existed in countries with huge populations such as China, Indonesia, and India. 6. The baby boomers are aging and they are more conscious on their appearance, beauty and also improving their looks. 7. Emphasize direct selling in emerging and developing market.
Threats

1. There is the emergence of new competitors worldwide such as Mary Kay and Revlon. 2. The number of people buying Avon products in markets like United States had been declining by 2 to 3 percent per year for 12 years. In terms of color cosmetics, environmental International Inc. predicted that many of these markets will see slowdown in volume demand. 3. There is a rejection of internet selling by sales representatives. 4. Global economic climate stifled new product development, innovation and sustainability programs in 2009. 5. The cost of commodities is rising. 6. They are a multilevel based company that sells inferior quality with a higher price tag than what it is worth. 7. The inflation rate is rising.

External Factor Evaluation Matrix (EFE) The table below shows the opportunities that are available and factors that threaten the success of the business. KEY EXTERNAL FACTORS Opportunities 1. Introduction of green products which is a growing trend in the cosmetics industry. 2. Cosmetic industry tends to be countercyclical the industry for which the demand is not correlated with the business cycle. 3. Eye make-up market 4. Urban trendsetters markets 5. Geographic growth enormous growth opportunities existed in countries with huge populations such as China, Indonesia, and India. 6. The baby boomers are aging and they are more conscious on their appearance, beauty and also improving their looks. 7. Emphasize direct selling in emerging and developing market. Threats 1. The emergence of new competitors worldwide Weight 0.08 0.06 0.07 0.09 0.07 0.07 0.06 0.08 Rating 4 3 3 4 4 3 2 2 3 3 2 2 2 3 Weighted Score 0.32 0.18 0.21 0.36 0.28 0.21 0.12 0.16 0.21 0.21 0.16 0.14 0.12 0.21 2.89

2. Market slowdown 0.07 3. Rejection of internet selling by sales representatives 0.07 4. Economic downtown 0.08 5. Rising cost of commodities 0.07 6. Selling inferior quality with a higher price tag than what it is worth 0.06 7. Rising inflation rate 0.07 TOTALS 1 1= the response is poor, 2= the response is average, 3= the response is superior, 4= response is superior