Avon is a one of the world’s leading beauty companies and today’s article is from the book called Avon, Building the World’s Premier Company for Women, by Laura Klepacki, John Wiley & Sons, Hoboken, New Jersey, 2005. The book with approval from Avon is both a history of the company and some of the reasons why Avon which started in 1886 is still in business. There are a wide variety of distribution channels – to sell merchandise and Avon has been successful with women selling women – first door to door now face to face. Along the way the markup has been good with Avon controlling and doing a very good job from the research and development to bringing out the products. The beauty industry introduces many products to complement the fashion industry. For example scents or fragrances are introduced in the fall to allow for holiday sales. The new products are designed to entice buyers to see the products and allows the ability to buy other company offerings.

Avon offers a new brochure every two weeks in the US which means they retool their offerings 26 times a year. It can do this because of the strength of its product development machine – which introduces over a 1,000 products every year. To be fair many of them are novelty items, but comparing it to the competition – their newness is 15%, Avon is 40%. This means Avon which has a history or a culture of innovation does much of the development in house, following a very tight matrix of development.

Linking to dividend paying stocks, Avon pays a dividend and one of the methods to continually analyze the company is its ability to execute and bring out new products which are in demand. Every company has a competitive edge which they bring to the market, for there are other companies doing similar things, but the best ones do it better. Similar to every organization sometimes everything goes right, sometimes the obstacles in the system pop up, defining the competitive advantage of your company’s helps you determine how long you should own it.

There are more questions than answers, till the next time – to raising questions