finalpart2.doc - Avon Products Inc

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           1. Avon Products Inc., with world headquarters in New York, had been selling through house
calls almost since it founding in 1885. The company had revenues of 5.3 billion in 1998 and employs
34,000 people. Avon has an astounding total of 2.8 million independent sales representatives in 135
countries. Avon has extremely high turnover of, Avon sales reps., partially because of the problems
indirect sales. However; the high turnover is caused by other things as well, including the slow, frustrating,
and error filled, paper-based order entry system that most of the reps. must use. Most orders are
telephoned in to Avon’s call center distributed in various locations around the world. The call centers not
only take orders, but they are supposed to solve order fulfillment problems as well. In addition they are
charged with keeping sales representatives updated on product specials and sales incentives, and answering
the reps’ product questions. The call centers cannot cope with these responsibilities because many of them
still not have access to current information on the sales representatives or even on Avon’s products. For
reps the problem is compounded by the fact that the call centers are so busy with their 4000 calls per hour
that each rep is only allowed to call in her orders on certain assigned days of the week.
            Avon real problem when it comes to competitive forces is that sell door-to-door is becoming
increasing difficult partly because more women are working and so fewer potential customers are at home.
However, the issue is not only that more women are working, it is also about the fact that they have more
options for purchasing Avon’s and competitors’ products. The reason why Avon is highly competitive is
because the other products are being advertised world wide not only by catalogs, but by magazines, new
papers, commercials, radio, and even on Internet. Also the competitors products are being sold at well
know store such as Kmart, JC Penny , and many other well know shopping malls. If Avon were to expand
its products more world wide rather than having to go door to door they could easily sell there products as
the competitors do, and by doing so the public will recognize their products and will want to buy more of
their products. Also by analyzing this problem using the Value Chain model, I think Avon should improve
its old fashion way of doing their shipping and order taking so that way this company could grow more and
make it better for the company and for the people making this company grow.
           Avon management lacks the knowledge of control over its orders and also on the amount of
information they give out to their rep. Avon organization needs to get together and analyze a new and
better way to improve the company finances without having to cut down on it reps and employees and the
calling centers. Avon technology is very old and there is just too mush paper work to be done now in day
all the data is stored into computer software and has eliminated much of the paper and filing process and
Avon should consider doing the same; also their way of taking order must also improve.
           In analyzing Avon’s management system I think a solution to this and many other problems are as
follows: I notice the Avon need a stronger management system one that can take a good look at the whole
companies needs not just how to make money, but how to get that there product to sell. They should
develop a system like the think backward and forward analyzes, this method is a simple and very successful
method when it come to managing a companies weaknesses and failure. With this method you are able to
analyze the problem from many angles and find many useful solutions. As for the organization, I think that
the people involved in selling there products should appoint some chief Rep., and have them teach the other
reps., about the product and should be will and have the knowledge to answer their question and the way of
doing this is by setting or presenting seminars were they the reps., could gain knowledge of what new
product they should know about. Also they could leave the call center for just ordering business and not
having to call again when the next rep., is available to help.
Finally, about Avon’s technology Avon should have more and improve computers, fax machines and an
improved calling center. Avon as done it business working with way too much paper work now its time for
Avon to upgrade it technology; however, Avon has done some changes Avon has created it own web page
were reps can e-mail their questions and see what is new on the catalogs also, Avon estimates that it saves
between $1 and $3 for every order transmitted over its web sit which would amount to annual savings of
between $650 million and $1 billion if all of its orders worldwide were handled through the Internet. The
web site will also help the company combat new competitors selling beauty products through the web.
           If I were the system analyst for this project, I would ask how is Avon going to teach or inform
their reps., on what they are selling, because only about 30 percent of Avon’s sales reps have Web access.
Also only half of all independent sales reps in Latin America even have telephones, much less access to the
Internet? How is Avon going to improve their ordering method? Also In making this changes how much
will it cost the company to improve it technology with out having to raise it prices on their products?
          AeroGroup International, the Edison, New Jersey, producer of Aerosoles shoes, began in 1987
when Jules Schneider purchased the 7 million junior footwear division of Kenneth Cole Productions.
Schneider wanted to sell them for as low as $40 a pair! Schneider and a partner in Italy had discovered a
way to construct shoes using the soft, flexible method central to slipper manufacturing while giving them
the durability of a shoe. Using this technology, AeroGroup’s sales climbed to $150 million in 1998,
representing an annual growth of more than 30 percent during its 11-year history. The corporate plan is to
grow sales to $500 million by the year 2003. In 1997 AeroGroup was facing many problems. For
example, every pending order entered into AeroGroup’s computer system had to be printed for Schneider
to review so that he personally could decide which to fill. Schneider also had to sign off personally on all
wholesale returns. Aside from the installation of an e-mail system, the firm’s operation systems hadn’t
changed in five years. Because the sales force was only able to call in sales data nightly, sales information
was always one day behind. Both the sale force and the factory complained about the lack of sales histories
and projections. The company not only needed to modernize the computers to handle its current business,
but it also needed to increase resources so the company would be ready if the sales were to expand
according to the plan and projections. The project became real on March 30, 1998, when AeroGroup sent
out a Request for Proposal (RFP) for an ERP system. The R/3 package includes integrated financial
accounting, production planning, sales and distribution, cost-center accounting, order-costing, materials
management, human resources, quality assurance, fixed assets management, plant maintenance, and project
planning applications. Despite the problems with the consortium, AFS was introduced in April 1998. Only
two companies were using it by the beginning of 1999. One was the Greg Norman division of Reebok
International. The division had $100 million in sales within a company of $3.6 billion in revenues-not a
vote of confidence from Reebok. The other user was Justin Industries, a $440 million conglomerate, which
used it at its Fort Worth, Texas, footwear unit. By early January 1999, the project had run into many
problems, and AeroGroup abandoned AFS and R/3 and instead signed a contract to purchase the JBA
package. The reason for abandoning AFS given by Morris and Zonenshine was that it was incomplete and
too costly to be used to address Aerosoles’ problems.

          Cluster Competitiveness is a small but rapidly growing consulting firm located in Barcelona but
operating throughout Europe and in North America. It recently opened a second office in Varese, Italy.
The company consults in a very specific area: the development of industry- specific geographic clusters,
such as the leather tanning cluster in northern Italy or the high-tech cluster Silicon Valley near San Jose,
Califorina. A cluster is an informal association of firms, which pursue deliberate practice of collaboration
and innovation to increase their competitiveness in regional, national, and international markets. Cluster
competitiveness is a relatively new company; it was founded in 1993 by Emiliano Duch. The company’s
business model is based on a fast-growth strategy and on finding ways to prosper in a niche market.
Cluster tend to generate the kind of independent, specialized, educational facilities that these people need.
Bob Breault, the chair of Tucson’s Breault Research Organization Inc., explains that his company is not
able to go global alone because it is too small. The problem for Duch and other cluster consulting firms is
that their clients- governments and small to medium-size business – can-not pay the high consulting fees
that big corporations do. In general, business consulting is a high-powered field that can be very lucrative.
The problem Duch faced was how to attract and hold affordable consultants when he could not compete
financially with the big firms. He solved the problem by analyzing and following the model of
apprenticeship that was central to European economies for several centuries before 1800. The system
Dutch developed begins with the recognition that junior staff assume a great deal of responsibility and
leadership right from the beginning. The system provides for only very minimal supervision from more
experienced staff. To accomplish this Dutch turned to computer systems. To solve its underlying problem
the company does use other technology as well. Quite naturally cluster Competitiveness relies on e-mail,
which consultants can access either through their laptops or through the cell phones they are issued.
Consultants all use Microsoft Project to plan and schedule meetings, interviews, presentations, and other
events. Cluster Competitiveness also has developed Poeta, software application based on Microsoft’s
Access and Outlook applications. With Poeta consultants track all of the relationship of all participants
with each project. Duch used metrics to measure the effects his approach has had on Cluster
Competitiveness during their first four years. He tracked the cost of training a consultant up to the level of
case leader, the number of consultants who can be trained simultaneously, and the number of client billings
generated by each consultant. With this new method, the company’s measured training capacity has risen
100 percent in four each consultant has more than doubled.

          The Federal Aviation Administration (FAA), through its air traffic controllers, controls all
commercial planes in the United Sates. With many thousands of flights daily, the air space of the United
States is very crowded, and without the air traffic controllers, airplane crashes would probably occur daily.
The controllers give permission for landings and take offs, they approve flight paths, and they monitor al
airplanes in flight. The air traffic controllers have a simple goal – flight safety. With so many airplanes,
computers systems are vital to the success of the controllers. The issue in the minds of most observers and
many travelers concerns how well the FAA manages its computer systems. One other problem cited by
several labor representatives of the controllers’ union is the communications gap between the FAA
management and the users of the air traffic control systems. That the gap exists perhaps is no surprise.
Problems developed between management and controllers in the 1970s and became a disaster when the
controllers went out on strike in 1981. Ultimately, President Reagan dismissed more than 11,000
controllers. The current communications gap is evident when management claims positive results on the
Stars project and the controllers apparently disagree. Controllers often have spoken out in meetings, saying
that Stars is cumbersome, that the controls are complex, and the terminal displays are unclear.

          The three projects that I discovered to be knowledgeable and informative where power point,
creating my own web page and working with search engines. Leaning to use power point has helped me to
improve my computer skills now I’m not limited to know only certain thing. I was able to create a good
presentation, the technical skills it took to create my power point presentation were many; however, the
knowledge I gain are going to help me in my future carier as an accountant. I creating my own web page
has made me discover may exciting and very useful information not only was I able to create my own
resume, but I was able to publish it. I really enjoy this project I did gain a lot from this. I know that maybe
the knowledge I learned during the semester will be useless some time in the future because at the rate were
going we might learn to fly. Maybe in a near by future my teacher will be my own children, they will be
tough new and improved skills different to the skills I know today. I guess that’s just life. I have more
knowledge and skills then my parents have and some day my children will have more skill then I will. We
just have to keep up with time and not let it get the best of us. I learned to use Search engines, which
helped me find Web sites that were little known, search engines contains software that looks for Web pages
containing one or more of the search terms, then they display matches ranked by a method that usually
involves the location and frequency of the search terms. The Internet, intranets, and extranets are
becoming the principal platforms for electronic commerce and electronic business because this technology
provides so many benefits. The internet’s global connectivity, ease of use, low cost, and multimedia
capabilities can be used to create interactive applications, services, and products. As it has help to ease to
create interactive projects which were very informative and I gained so much from this course.

When large amounts of data are stored in electronic form they are vulnerable to many more kinds of threats
than when they exist in manual form. Threats to computerized information systems.
(1) Hardware failure        Fire
(2) Software failure        Electrical problems
(3) Personnel actions       User errors
(4) Terminal access         program changes
(5) Theft of data, Services, - Telecommunications Problems

         These are the most common threats against computerized information systems. They can stem
from technical, organizational, and environmental factors computerized systems are especially vulnerable
to such threats form the following reasons:
      A complex information system cannot be replicated manually
      Computerized procedures seem to be invisible and are not easily understood or audited
         Although the chances of disaster in automated systems are no greater than in manual systems, the
          effect of a disaster can be much more extensive. In some cases all of a system’s records can be
          destroyed and lost forever.
      On-line information systems are directly accessible by many individuals. Legitimate users may
          gain easy access to portions of computers data that they are not authorized to view. Unauthorized
          individuals can also gain access to such systems.
These failures are considered to be environmental failures, because most of the failures are caused by
environmental changes, changes that happen with out notice, but always have a solution of repair. Always
try to have some kind of back up will make this failures seem minor and less expensive to repair.


                           Prototyping       Traditional system                  End-User
                                             Development Life Cycle              Development

Project Structure          High              High                                Low

Project Technology         Low               High                                Low

Project size               Large             Small                               Medium

A development methodology is a collection of methods, more or more for every activity within every phase
of a systems development project. Some development methodologies are suited to specific technologies,
whereas others reflect different philosophies of systems development. The most widely used
methodologies and tools include the traditional structured methodologies, object-oriented software
development, computer-aided software engineering (CASE), and software reengineering structured
methodologies refers to the fact that techniques are carefully drawn up, step by step, with each step
building on a previous one. Object-oriented software development that shifts the focus from modeling
business processes and data to combining data and procedures to create objects. Computer-aided software
engineering (CASE) the automation of step-by-step methodologies for software and systems development
to reduce the amount of repetitive work the developer needs to do. Software reengineering a methodology
that, addresses the problem of aging software by salvaging and upgrading it so that the users can avoid a
long and expensive replacement project.

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