Type Industry Founded Founder(s) Headquarters Area served

Private. Direct selling. 1959 Rich DeVos Jay Van Andel Ada, Michigan, United States World ide Steve Van Andel !"hair#an$ Doug DeVos !President$ Al Koop !"hie% &'ec(tive$ Russell Evan !")*$

Key people

Revenue Employees Parent

USD +., -illion !.//9$ 10,/// Alticor

Introdu t!on" Am#ay is the largest direct selling co#1any and #an(%act(rer in the orld that (ses net or2 #ar2eting to sell a variety o% 1rod(cts, 1ri#arily in the health, -ea(ty, and ho#e care #ar2ets. A# ay as %o(nded in 1959 -y Jay Van Andel and Richard DeVos. 3ased in Ada, Michigan, the co#1any and %a#ily o% co#1anies (nder Alticor re1orted sales gro th o% ..04, reaching US5+., -illion %or the year ending Dece#-er 01, .//9.6ts 1rod(ct lines incl(de ho#e care 1rod(cts, 1ersonal care 1rod(cts, 7e elry, electronics, 8(trilite dietary s(11le#ents, ater 1(ri%iers, air 1(ri%iers, ins(rance and cos#etics. 6n .//,, 9ealth : 3ea(ty 1rod(cts acco(nted %or nearly ;/4 o% orld ide sales. A# ay cond(cts -(siness thro(gh a n(#-er o% a%%iliated co#1anies in #ore than ninety co(ntries and territories aro(nd the orld. 6t is ran2ed -y )or-es as one o% the largest 1rivate co#1anies in the United States and -y Deloitte as one o% the largest retailers in the orld.

S(ccess%(l -(sinesses do #ore than si#1ly 1rovide goods and services %or c(sto#ers. <hey also #a2e a real contri-(tion to the co##(nities in hich they o1erate. S(ccess%(l ethical enter1rises= "reate e#1loy#ent and 7o- sec(rity Provide 1rod(cts that give cons(#ers good val(e %or #oney "ontri-(te to creating a #ore caring and cared %or co##(nity and hence a -etter orld.

A# ay 1rovides a good e'a#1le o% a -(siness that recognises its ider res1onsi-ilities. 6t is one o% the orld>s largest direct sales co#1anies. A# ay or2s ith aro(nd 0 #illion inde1endent -(siness o ners !i-os$ in #ore than +/ co(ntries. <hese i-os are the lin2 -et een a# ay and the %inal cons(#er. <hey are also a# ay>s lin2s ith citi?ens and co##(nities across the glo-e. 6n the (2 a# ay distri-(tes a variety o% 1rod(cts, incl(ding=

As ell as its -(siness ai#s the co#1any has a range o% social ai#s that are 1art o% a >glo-al ca(se 1rogra#>. <hese are o(tlined -elo .

<he orld>s #ost res1ected co#1anies recognise that -eing a good cor1orate citi?en #eans s(11orting ca(ses that #atter to the co##(nities in hich they o1erate. A# ay !short %or a#erican ay$ is an a#erican co#1any (sing #(lti@level as %o(nded in 1959 -y 7ay van

#ar2eting techniA(es, that sells a variety o% 1rod(cts, 1ri#arily in the health, -ea(ty, and ho#e care #ar2ets. A# ay andel and richard devos. 3ased in ada, #ichigan, the co#1any and %a#ily o% co#1anies (nder alticor re1orted sales o% (sd511.0 -illion %or the year ended
6

dece#-er 01, ./1.Bthe seventh consec(tive year o% gro th %or the co#1any its 1rod(ct lines incl(de ho#e care 1rod(cts, 1ersonal care 1rod(cts, 7e elry, electronics, n(trilite dietary s(11le#ents, ater 1(ri%iers, air 1(ri%iers, ins(rance and cos#etics. A# ay cond(cts -(siness thro(gh a n(#-er o% a%%iliated co#1anies in #ore than a h(ndred co(ntries and territories aro(nd the orlda# ay as ran2ed no.11, a#ong the largest glo-al retailers -y deloitte in .//;, and no..5 a#ong the largest 1rivate co#1anies in the (.s. 3y %or-es in ./1..

$%RE VA&'ES

It !n ludes" Sa%ety C sa%ety serves as a -aro#eter o% o(r co#1anyDs overall s(ccess and is a s1eci%ic #eas(re o% o(r o1erating e'cellence. <r(st C tr(st is the #(t(al res1ect %or and con%idence in 1eo1le. <r(st recogni?es the i#1ortance o% individ(als and a11reciates their diverse o1inions. <r(st co#1els (s to share in%or#ation and enco(rage ne ideas. 6t reA(ires an o1en, honest, %orthright #anner. "on%idence C sel%@con%ident 1eo1le ta2e initiative, handle the (ne'1ected,
8

stand -ehind their convictions and s(11ort the e%%orts o% others. <hey ta2e -old, innovative, creative actions, ca1itali?e on o11ort(nities, #a2e so(nd decisions A(ic2ly, and #o-ili?e the -est reso(rces %or ra1id action tea# or2 C tea# or2 is 1ersonal involve#ent and colla-oration in a tea# environ#ent. 6t incl(des setting a co##on goal in s(11ort o% -(siness o-7ectives, #a2ing an individ(al co##it#ent to the tea#Ds s(ccess and recogni?ing the s(ccess o% the tea#. Acco(nta-ility C -eing acco(nta-le #eans every e#1loyee ass(#es o nershi1 and res1onsi-ility %or his or her o n or2, regardless o% the 7oacco(nta-le #eans #a2ing decisions and holding they 1er%or#. 3eing

onesel% res1onsi-le %or the conseA(ences o% those choices. Doing hatDs right C doing hatDs right is -eing honest, ethical, and having 1ersonal and 1ro%essional integrity. 6t #eans consistently treating all 1eo1le %airly, delivering on 1ro#ises, and ta2ing 1ersonal res1onsi-ility %or yo(r actions. E(ality C A(ality is the 1ri#ary deter#inant o% c(sto#er satis%action and loyalty, and it reA(ires e#1loyees to contin(o(sly 1rovide internal and e'ternal c(sto#ers ith the right 1rod(ct or service...done right...the %irst ti#e. 6n todayDs increasingly co#1etitive -(siness environ#ent, -etter A(ality

translates into -etter val(e %or o(r c(sto#ers and, s(-seA(ently, -etter val(e %or their c(sto#ers@and this is the very essence o% co#1etitive di%%erentiation.

(!ss!on"

1rovides thr(st and direction to the organi?ation. cornerstone o% all strategic 1lanning. F.thro(gh the 1artnering o% distri-(tors, e#1loyees, and the %o(nding %a#ilies and the s(11ort o% A(ality 1rod(cts and service, e o%%er all 1eo1le the o11ort(nity to achieve their goals thro(gh the a# ay sales and #ar2eting 1lan. -road over riding state#ent o% 1(r1ose.

to %acilitate -est -(siness o11ort(nities. to deliver high@A(ality 1rod(cts to se#i@(r-an and (r-an ho#es in diverse areas o% ins(rance, ho#e tech, ho#e care, 1ersonal care, cos#etics and ellness.

10

)%A& %F A(*A+" <he develo1#ent o% ne -(siness o11ort(nities.

<o increase the co#1any>s role in relations to social res1onsi-ility. <o 1ro#ote a 1ro%ita-le and s(staina-le -(siness activity that #eets the c(sto#ersD needs.

<o increase the co#1any>s #ar2et share. <o gain the co#1etitive edge. to increase the co#1any>s role in relations to social res1onsi-ility.

to 1rovide e'cellent c(sto#er service

11

Found!ng

12

A(*A+ VIET,A( (H- $H. (I,H SI,$E /001)2 7ay van andel and rich devos, %riends since school days, had -een -(siness 1artners in vario(s endeavors incl(ding a ha#-(rger stand, air charter service, and a sailing -(siness. in 19,9 they ere introd(ced -y neil #aas2ant !van as a andel>s second co(sin$ to the n(trilite 1rod(cts cor1oration.n(trilite

cali%ornia@-ased direct sales co#1any %o(nded -y dr. carl rehn-org, develo1er o% the %irst #(ltivita#in #ar2eted in the (nited states. in a(g(st 19,9, a%ter a night@long tal2, devos and van andel signed (1 to -eco#e distri-(tors %or n(trilite %ood s(11le#ents. they sold their %irst -o' the ne't day %or 519.5/, -(t lost interest %or the ne't t o #aas2ant, n(trilite se#inar. the #eeting ee2s. shortly therea%ter, at the (rging o% ith over a h(ndred ho had -eco#e their s1onsor, they traveled to chicago to attend a as at a do nto n hotel,

1eo1le in attendance. a%ter seeing 1ro#otional %il#stri1s and listening to tal2s -y co#1any re1resentatives and s(ccess%(l distri-(tors, they decided to 1(rs(e the n(trilite -(siness o11ort(nity ith enth(sias#. they sold their second -o' o% s(11le#ents on their ret(rn tri1 to #ichigan, and ra1idly 1roceeded to develo1 their ne -(siness %(rther in 19,9, devos and van andel had %or#ed 7a@ri cor1oration !a--reviated %ro# their res1ective %irst na#es$ %or i#1orting ooden goods %ro# so(th a#erican
13

co(ntries. a%ter their tri1 to the n(trilite se#inar, they dro1 this -(siness and 7a@ri -eca#e their n(trilite distri-(torshi1.G9H in addition to 1ro%its on each 1rod(ct sold, n(trilite also o%%ered co##ission on the sales o% 1rod(cts -y ne distri-(tors introd(ced to the co#1any -y e'isting distri-(torsBa syste# today 2no n as #(lti@level #ar2eting or net or2 #ar2eting. -y 195+, devos and van andel had -(ilt an organi?ation o% over 5,/// distri-(tors. ho ever, %ollo ing concerns a-o(t the sta-ility o% n(trilite, in a1ril 1959 they and so#e o% their to1 distri-(tors %or#ed the a#erican ay associationto re1resent the distri-(tors and loo2 %or additional 1rod(cts to #ar2et. their %irst 1rod(ct as called %ris2, a concentrated organic cleaner develo1ed

-y a scientist in ohio. devos and van andel -o(ght the rights to #an(%act(re and distri-(te %ris2, and later changed the na#e to loc !liA(id organic cleaner$ they s(-seA(ently %or#ed a# ay sales cor1oration to 1roc(re and inventory 1rod(cts and to handle the sales and #ar2eting 1lan, and a# ay services cor1oration to handle ins(rance and other -ene%its %or distri-(tors !a# ay -eing an a--reviation o% Ia#erican ayI.in 19;/ they 1(rchased a 5/4 share in atco #an(%act(ring co#1any in detroit, the original #an(%act(rers o% loc, and changed its na#e to a# ay #an(%act(ring cor1oration. in 19;, the a# ay sales cor1oration, a# ay services cor1oration, and a# ay #an(%act(ring cor1oration #erged to %or# a single entity, a# ay cor1oration a# ay -o(ght control o% n(trilite in 19J. and %(ll o nershi1.

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Direct Selling And S(11ly "hain

a s(11ly chain contains a set o% lin2s that -ring %inished 1rod(cts to end cons(#ers. as a direct selling co#1any, selling cons(#a-le 1rod(cts directly to cons(#ers and -y@1assing the traditional >retail> or >high street>. a# ay has its o n distinct chain, 1lacing a strong e#1hasis on i-os ho are a-le to %oc(s on individ(al c(sto#ers and their needs. a# ay #an(%act(res the #a7ority o% its o n -rand 1rod(cts at their #an(%act(ring 1lant in ada, #ichican. it then distri-(tes these directly to the i-os thro(gh a centralised areho(se in venlo, netherlands. having signed a contract to or2 ithin a# ay>s r(les o% cond(ct and code o% ethics, i-os are tr(sted to o1erate %le'i-ly ithin a >sel% reg(latory> environ#ent. they develo1

15

direct s(11ly channels and sell 1rod(cts to %riends and c(sto#ers that they 2no or #eet.

a# ay>s s(11ly chain is di%%erent %ro# a #ore conventional s(11ly chain that nor#ally sells goods to %inal cons(#ers thro(gh retail o(tlets. a# ay>s ay o% or2ing de1ends on -(ilding lasting connections ith the end cons(#er. %eed-ac2 1rovided -y cons(#ers and i-os hel1s to sha1e %(t(re changes in 1rod(cts and the service 1rovided. as a glo-al co#1any, a# ay has -(ilt (1 a strong regional str(ct(re aro(nd regional a%%iliates s(ch as a# ay (2 and the re1(-lic o% ireland. o1erating thro(gh the regional str(ct(re, a%%iliates are res1onsi-le %or=

%orecasting !ens(ring stoc2s are s(%%icient to #eet de#and$ c(sto#er service

16

e%%icient distri-(tion= ens(ring 1rod(cts reach i-os on ti#e and in to1 condition

1rod(ct 1ro#otion and i-o s(11ort e.g. s(11lying -roch(res to i-os. getting the i#age right is vital in a -(siness that relies on -(ilding relationshi1s ith individ(als and the ider co##(nity. i-os o%ten sell directly to %riends and it is essential to 1rovide high A(ality, val(e %or #oney 1rod(cts ith a 1//4 satis%action g(arantee. a# ay s1ends ti#e, #oney and e%%ort on creating an a11ro1riate design and a11earance %or a# ay 1rod(cts. it also develo1s ca#1aigns that s(11ort the -(siness and social ai#s o% the co#1any. vision o% a# ay= hel1ing 1eo1le live -etter lives. sho ing here the -(siness ishes to -e in the %(t(re.

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A(*A+ PR%D'$TS= A# ay o%%ers a range o% e'cl(sive, co#1etitive -rands that #eet 1roven c(sto#er needs aro(nd the orld. )ro# n(tritional s(11le#ents to ater treat#ent, cos#etics to cleaning 1rod(cts, these -rands are the solid %o(ndation %or a s(ccess%(l, inde1endent retail -(siness. Active li%estyle K artistry K at#os1here K -ea(tycycle K -ody series K -o(tiA(e K dish dro1s K eddie %(n2ho(ser K e##a 1age K es1ring K l.o.c. K gensona K glister K hy## K icoo2 K li%estyle -alanced sol(tions K nao cos#etics K #ois2in s2in care K n(trilite Kn(tri ay K 's energy K ocean essentials K 1ersonali?ed health K 1eter island K 1rotiA(e K 1ositri# K satiniA(e K sa+ K ti#e de%iance K tolso# K tri#

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Am#ay Personal $are Produ ts

8(triliteL is the %ar#s.

orldDs leading -rand o% vita#in, #ineral, and dietary

s(11le#ents, gro n harvested and 1rocessed on its o n certi%ied organic

ArtistryL is one o% the orldDs to1 %ive largest@selling 1restige -rands o% %acial s2in care and colo(r cos#etics. *(r scientists and %or#(lators have develo1ed the co#1lete line o% cos#etics,

All 1rod(cts o% Attit(de contain S2in Vitalising "o#1le' that synergistically co#-ine to cleanse, Re1lenish : Moist(rise the s2in #a2ing it so%t : s(11le.

19

Dyna#ite>s range o% #ale groo#ing 1rod(cts, %or#(lated internationally is designed to deliver the (lti#ate groo#ing e'1erience.

Mlister <ooth1aste is a revol(tionary M(lti@Action <ooth1aste that o%%ers seven -ene%its.

ith Sylodent

Persona Pre#i(# 0 in 1 Soa1 is a co#1lete soa1 %or the entire %a#ily 1ro#ises re%reshing con%idence.

SatiniA(e Advanced Range hair.

ith (niA(e "era#ide 6n%(sion Syste# (ses

nat(re>s o n rene ing technology to re7(venate, strengthen and 1rotect yo(r

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SA+ Mel?y#e is 6ndia>s only 0@in@1 la(ndry detergent and so%tens.

hich 1retreats, cleans

M:9 Range enriched

ith the goodness o% Mlycerine and 9oney, dee1ly

no(rishes and hydrates the s2in %or a healthy glo .

N*" 9igh S(ds is a #(lti1(r1ose ho(sehold liA(id cleaner.

Dish Dro1s is a concentrated hand dish ashing liA(id I<riadic Detergency Syste#I.

ith a 1o er%(l

Mreat Val(e Prod(ct Range o%%ers yo( Mreat E(ality, Mreat Per%or#ance, Mreat Price and a Money 3ac2 M(arantee
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A(*A+3s $%(PETIT%RS" 1$ direct co#1etitors= avon #ary 2ay s(nrider .$ indirect co#1etitors= local indian co#1anies. changing 1olitical : econo#ic at#os1here 1rod(cts (sed as sa#1les to 1ers(ade relatives and %riends to 7oin a# ay %oc(s shi%ted %ro# selling 1rod(cts to recr(iting.

22

Develop!ng a glo4al strategy

6n the sa#e ay that a# ay has a glo-al strategy %or 1rod(cing, distri-(ting and #ar2eting its 1rod(cts orld ide, its strategy %or 1ro#oting csr is also glo-al. A# ay de%ines a glo-al ca(se as >a social iss(e a%%ecting #any 1eo1le aro(nd the orld engaged in a str(ggle or a 1light that arrants a charita-le res1onse.> the co#1any recognises that as a s(ccess%(l enter1rise it #(st -(ild its -(siness -ased on the 1rinci1les o% >relevance, si#1licity and h(#anity>. A# ay>s vision is >hel1ing 1eo1le live -etter lives>. Develo1ing the glo-al ca(se 1rogra#=

9el1s a# ay to -ring this vision to li%e Declares hat the organisation stands %or 3(ilds tr(st and res1ect in a# ay -rands &sta-lishes cor1orate social res1onsi-ility as a high 1riority. A# ay develo1ed its glo-al ca(se 1rogra# in .//.. 6t is the res(lt o% e'tensive research. <his involved st(dying relevant iss(es and holding disc(ssions ith organisations involved in 1roviding hel1 to the needy and (nder1rivileged in co##(nities orld ide. So#e research as 1ri#ary research, e.g. 6ntervie ing 1otential 1artners. *ther research as secondary, e.g. &'a#ining 1(-lished so(rces a-o(t glo-al trends in 1overty, lac2 o% ed(cational o11ort(nities etc. )ro# the o(tset, a# ay esta-lished so#e clear o-7ectives. <hese ere to= 3(ild loyalty and 1ride a#ong i-os and e#1loyees
23

&nhance a# ay>s re1(tation as a caring organisation Ma2e a real di%%erence to h(#an lives.

%(rther research indicated that 1eo1le lin2ed to a# ay had a clear %avo(rite area %or the glo-al ca(se 1rogra# to cover. they anted it to develo1 initiatives concerned ith children and the %a#ily. they %elt that there are #illions o% co#1elling reasons to %oc(s on hel1ing children incl(ding. %or e'a#1le=

24

A# ay is a -(siness o ned -y and o1erated -y %a#ilies. "hildren are the orld>s %(t(re. "hildren e#-ody ho1e. With children it is 1ossi-le to #a2e a li%elong di%%erence. Research sho ed that= 9al% o% the orld>s 1oor 1eo1le are children. &very year 1. #illion children die -e%ore their %i%th -irthday. 5,/ #illion children live in crisis sit(ations. *ver 1.5 #illion children have no access to -asic ed(cation. &ven in the #ost develo1ed co(ntries so#e children are le%t -ehind. Research also sho ed, ho ever, that children>s needs di%%er %ro# one 1art o% the orld to another. A# ay there%ore recognises that i% its glo-al ca(se 1rogra# is to have #a'i#(# i#1act it ill need to -e tailored to the s1eci%ic needs o% 1artic(lar regions and areas.

25

(EETI,) )&%5A& RESP%,SI5I&ITIES 5+ $ARI,) F%R $%((',ITIES6A, A(*A+ $ASE ST'D+ A# ay>s >one-yone> ca#1aign 1rovides a good e'a#1le o% the ay in hich -(sinesses can #a2e a di%%erence in the co##(nities in hich they o1erate.

Research sho ed that a# ay>s sta2eholders are co##itted to activities hich -etter the lives o% %a#ilies and children. <he co#1any has there%ore -een a-le to %or#(late a 1lan and a ell targeted 1rogra##e to harness the co##it#ent o% its 1eo1le to hel1 others and to create a #ore 1ros1ero(s orld. 3y or2ing ith (nice% it is 1artnering one o% the orld>s #ost highly regarded children>s organisations. <ogether they are a-le to hel1 children en7oy a -etter %(t(re.
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SP%,S%R7s RESP%,SI5I&ITIES <he a# ay -(siness 1rovides o11ort(nities %or 1eo1le %ro# all al2s o% li%e, -(t li2e anything o% val(e, ith o11ort(nity co#es res1onsi-ility. 3y s1onsoring others and hel1ing the# yo( ill in%l(ence the s(ccess o% their -(siness and #(lti1ly yo(r o n e%%orts and -(siness t(rnover. When yo( s1onsor ne inde1endent -(siness o ners those 1eo1le have e'1ectations a-o(t the level o% s(11ort they sho(ld receive as they, in t(rn, see2 to -(ild their %(t(res ith a# ay. <he r(les o% cond(ct o(tline the res1onsi-ilities that each s1onsor (nderta2es hen they -ring a ne i-o into the -(siness. <he %(l%ill#ent o% these res1onsi-ilities can -e the di%%erence -et een a ne i-o staying and 1rod(ctively or2ing in the -(siness or leaving ith their as1irations (n%(l%illed.

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*H+ $%RP%RATE RESP%,SI5I&IT+ (ATTERS8 3(ilding a strong, s(staina-le -(siness #eans 1(tting 1eo1le, 1rod(cts and 1er%or#ance at the centre o% everything e do. A -(siness li2e a# ay is %o(nded on 1eo1le C hether they live in o(r co##(nities, distri-(te *(r 1rod(cts or or2 in o(r o%%ices. *(r n(trilite 1rod(ct range has relied on s(staina-le %ar#ing %or decades. We also recognise that in todayDs orld o% scarcer reso(rces and in the %ace o% increasing ris2s o% cli#ate change, o(r 1er%or#ance needs to -e s(staina-le C (sing energy and ater #ore e%%iciently, recycling #ore, and red(cing o(r car-on %oot1rint. 3y -(ilding cor1orate res1onsi-ility 1rinci1les into o(r 3(siness #odel, o(r c(sto#ers can -e con%ident that they Are dealing ith an ethical, tr(sted co#1any. 6n ./1., Neader in cor1orate res1onsi-ility -y ./15 and -eyond. <o achieve that, e ai# to 1rovide li%e@long learning *11ort(nities to o(r co##(nities and s(11ort the three Pillars o% o(r cor1orate res1onsi-ility activities C 1eo1le, Prod(cts and 1er%or#ance. A# ay relies on o(r e#1loyees and distri-(tors to Oee1 o(r -(siness strong and gro ing. We al ays

28

strive to 1rovide o11ort(nities %or o(r 1eo1le to live (1 to their %(ll 1otential. a# ay also -elieves that entre1rene(rshi1 is a gate ay to ne o11ort(nities and individ(al e#1o er#ent, hich is hy e ai# to s(11ort entre1rene(rshi1 in e(ro1e C 1artic(larly at a ti#e hen e(ro1e needs a gro ing econo#y and #ore 7o-s. e have -een s(11orting 1eo1le in the co##(nity %or the last ,/ years C o(r one -y one ca#1aign %or children -rings together e#1loyees and distri-(tors to #a2e a di%%erence in the lives o% children. e also recognise that e can #a2e a di%%erence thro(gh o(r 1rod(cts C hether they are s(staina-ly 1rod(ced or hether they can s(11ort 1eo1le and co##(nities directly. one e'a#1le is n(trilite little -its C a 1rod(ct designed to %ight chronic #aln(trition in children (nder %ive years old. little -its is a %ood s(11le#ent containing essential vita#ins and #inerals that are o%ten lac2ing in childrenDs diets in the develo1ing orld. e or2 in colla-oration ith care international and the glo-al alliance

29

)or i#1roved n(trition !gain$ to hel1 #a2e childrenDs lives -etter.o(r 1er%or#ance is also %(nda#ental to hether, as a co#1any, e #eet -est hich e live, 1ractice in s(staina-le #anage#ent, 1rod(ction and distri-(tion. A# ay -elieves that -(ilding (nderstanding a-o(t the environ#ent in 2ey to creating a s(staina-le %(t(re. and the 1ositive contri-(tion that individ(als and co##(nities can #a2e, is

30

Pro4lems" A# ay>s organi?ation is highly decentrali?ed, and it>s #anage#ent %(nctions are delegated to %irst line s(1ervisors. <hese %irst line #anagers are called #ain distri-(tors in the organi?ation. A #a7or 1art o% the sales reven(e is -ased on the 1er%or#ance o% these distri-(tors. )or a %e the orld. <his as a very e'1ensive 1rocess, as it years ago, 1rod(cts as #ore e'1ensive to hich the ere sent to distri-(tors all over the (sa and in si'ty other co(ntries all over send s#all vol(#es rather than sending #a7or -(l2s o% 1rod(cts to holesalers and retailers. 6 -elieve that this as a #a7or 1ro-le# cor1oration %aced in a controlla-le #anner, -(t a 1ro-le# that co(ld -e #ore detri#ental to the cor1oration in the %(t(re. <he cor1oration co(ld %ace severe 1ro-le#s in the 1rocess o% -eing a-le to e%%ectively co#1ete de1art#ental stores, s(1er#ar2ets, and disco(nt stores. < o years ago, to1 e'ec(tive #anagers at the a# ay cor1oration reali?ed that they had to do so#ething a-o(t the distri-(tion 1rocess that the co#1any %aced. <hey reali?ed that they lost #a7or #ar2et shares, #ainly -eca(se o% (nsatis%actory s1eed, and the cost o% the delivery o% 1rod(cts %ro# only three #ain distri-(tion centers serving the orld.!1hichitsiri= 1.$ a%ter st(dying the as too co#1licated, distri-(tion 1rocesses %ro# the #an(%act(rer to the direct distri-(tors, and %inally to the c(sto#er, they reali?ed that this 1rocess and there than needed. <he old distri-(tion syste# 1roced(res, or distri-(tion %(nctions. <hese ere at least t o ti#es as #any ste1s in the distri-(tion channel as divided into %o(r #ain ere %or non@a# ay 1rod(ced
31

ith

ite#sP !1$%ro# #an(%act(rer to agentQ7o--er, !.$%ro# the agent to a# ay>s #ain distri-(tion center near grand ra1ids in #ichigan, !0$%ro# the grand distri-(tion center to the 1rivate, contract or co##on carrier !to ;J4 (s #ail$, !,$ and %inally to the direct distri-(tors, c(sto#ers. !-enar= 9,$ this 1ath ay co(ld easily -e #ade. a# ay>s to1 #anage#ent disc(ssed the 1ro-le# ithin the organi?ation, and %o(nd a sol(tion to the distri-(tion 1ro-le#s, hich o(ld decrease the costs -y at least 0/ 1ercent, decrease delivery ti#e to the c(sto#er, and %inally increase the relia-ility !A(ality$ o% the distri-(tion 1rocess. this -asic conce1t o% the sol(tion as to c(t o(t t o, and in so#e cases three ste1s in the distri-(tion 1rocess. the t o 1ri#arily ste1s that ere c(t o(t ere the agent !the 7o--er$ and the grand distri-(tion center. also, in a %e isolated cases, the #an(%act(rers %or only a# ay 1rod(cts s(ch as detergents, and other ho(sehold 1rod(cts, shi11ed the goods directly to the direct distri-(tors. this as a #a7or advantage, as it saved the cor1oration even #ore #ore #oney and ti#e. in addition to this change in the distri-(tion syste#, a ay>s #anagers decided to try to locali?e the distri-(tion centers all over the cor1oration>s geogra1hical #ar2et share. instead o% only having a %e large, and centrali?ed distri-(tion centers, it as chosen to decentrali?e the distri-(tion net or2, and concentrate on setting (1 s#aller distri-(tion centers. these local I areho(sesI only stoc2 -(l2y, and very 1o1(lar 1rod(cts. -y decentrali?ing, a# ay has -een a-le to Ic(t the delivery ti#e o% nor#al
32

ho distri-(ted the goods to the

as very ti#e cons(#ing, and errors

distri-(tor goods %ro# t o ee2s to an average o% three or2ing days.I according to rich devos, co@o ner o% the cor1orationP Io(r c(sto#ers are #ost i#1ortant, and e have to satis%y their needs, other ise, e ill no -e a-le to co#1ete ith other organi?ations dealing ith si#ilar conce1ts to those o% the a# ay cor1oration.I !2ie-ni2ov .,+$ -y decreasing the ti#e o% delivery, a# ay has given a #ore co#1etitive c(sto#er ti#e (tility %or it>s 1rod(cts. it has also -een a-le to save large a#o(nts o% #oney -y (sing less ste1s in the distri-(tion channel.

33

F'RTHER I(PR%VE(E,TS P%SSI5&E S%&'TI%,S= <he #ain 1ro-le# ith any 2ind o% distri-(tion is that co#1anies that relies

(1on 1hysical distri-(tion o% 1rod(cts is that there is these organi?ations have no or very little control over the cost o% trans1ortation. <here are too #any e'ternal %actors involved in this 1artic(lar sit(ation. S(ch e'ternal %actors incl(desP stri2es, increase in %(el costs, and te#1orarily increase in the de#and o% trans1ortation d(ring certain ti#e 1eriods. 6 -elieve that the a# ay cor1oration has done a good 7o- in trying to %ind a good sol(tion to it>s distri-(tion 1ro-le#s. <his can -e de#onstrated -y the i#1rove#ents in cor1orate 1er%or#ance. 6 still -elieve that there are %(rther i#1rove#ent that can -e done to the syste#. 6t #(st al ays -e ta2en into consideration that the c(sto#ers end @(1 1aying s1ecial shi11ing %ees on goods, that (s(ally eA(ali?es the di%%erence -et een a# ay>s retail 1rices and the 1rices A(oted in nor#al sho1s. A# ay does not ant to -e co#1ared to nor#al retail itho(t stores, s(11orted -y the %ir#>s sloganP Isho1 itho(t going sho11ingI. <his is a great conce1t as long as 1eo1le have eno(gh #oney to do sho11ing going to their neigh-orhood de1art#ental store, and are a-le to s1end #ore #oney %or a door@to@door service. 6 -elieve that there are -asically three di%%erent sol(tions to the 1ro-le# ith distri-(tion o% 1rod(cts. <hese areP increasing the a#o(nt o% s#all distri-(tion centers thro(gho(t the geogra1hical #ar2et share, second, start (sing a# ay>s hole sellers as direct distri-(tors to the c(sto#er, and %inally to shi1 1rod(cts directly %ro# #an(%act(ring to the c(sto#er.
34

<he %irst sol(tion o(ld -e to %(rther develo1 the distri-(tion net or2. 6t is cr(cial %or a cor1oration s(ch as a# ay to -e the -est in this %ield o% doing -(siness, and according to richard devos Ithere is al ays roo# %or i#1rove#ents.I !-enar= ,+$ 1resently, #ost o% the goods that the co#1any sell go thro(gh three o% a# ay>s #ain distri-(tion centers, hich also serve as -eing areho(ses %or so#e o% the 1rod(cts. 6% a# ay o(ld set (1 even #ore local, distri-(tion centers, and increase co##(nications -et een all the ste1s in the distri-(tion 1ath ay %ro# #an(%act(ring o% the good to the c(sto#er, it o(ld -e easier and less e'1ensive to serve the c(sto#er. 6n the %(t(re, #ore local distri-(tion centers -e -(ilt, and these sho(ld not only have the #ost 1o1(lar 1rod(cts in stoc2, s(ch as toiletries, and ho#e a11liances, -(t also a ide variety o% goods. 3y the (se o% s(ch distri-(tion centers, the co#1any co(ld also %(rther i#1rove the s1eed o% delivery o% the 1rod(cts to the direct distri-(tors, so that they can distri-(te the goods to their c(sto#ers. a second 1ossi-le sol(tion o(ld -e to develo1 a distri-(tion net or2 in hich #an(%act(rers and holesalers o(ld actively or2 together ith the a# ay cor1oration in the distri-(tion 1rocess. as this 1rocess o(ld to rely #ore (1on holesalers, that o(ld decrease the ca1ital cost %or the a# ay cor1oration, and decrease the a#o(nt o% %(nds s1ent on trans1ortation %ro# the a11ro1riate 1ort to the destination destination !the c(sto#er$. this does not #ean that all the distri-(tion centers sho(ld -e closed do n, as these co(ld deal only ith directly 1rod(ced a# ay 1rod(cts. it o(ld not -e very 1ro%ita-le to #a2e holesalers -(y 1rod(cts 1rod(ced -y the cor1oration, as
35

a# ay ill act as a sole #an(%act(rer in this second e'ternal ste1 in the distri-(tion 1rocess. (s(ally, a #an(%act(rer does not #a2e as #(ch #oney o(t o% the 1rod(ct, as hat a 7o--er !agent$, holesaler, and retailer do. also, the cor1oration has to 2ee1 (1 it>s co#1any 1ro%ile, -y -eing the sole distri-(tor %or it>s o n goods. no , the reader #ay A(estion ho the holesalers get in to the 1ict(reR holesalers o(ld -e res1onsi-le %or the distri-(tion 1rocess %or less n(#ero(s #erchandise goods !goods that do not sell in too large A(antities$. s(ch goods o(ld -e #ore e%%ective to shi1 directly %ro# the holesaler here a# ay acA(ire the 1rod(cts, instead o% sending these to one o% the distri-(tion centers %irst. a# ay o(ld -ene%it in -asically t o di%%erent ays i% this 1rocess is i#1lanted. %irst, it o(ld c(t do n on the trans1ortation e'1ense and the delivery service o(ld -e %aster. second, the cor1oration o(ld -e a-le to c(t do n on the cost o% 2ee1ing e'1ensive inventory in areho(ses, and decrease the ris2 o% r(nning o(t o% 1rod(cts i% the de#and is great, or on the o11osite, having a s(r1l(s o% 1rod(cts. %inally, the third, and the #ost revol(tionary sol(tion o(ld -e to #a2e the #an(%act(rers act as distri-(tors. as a# ay can 1rovide a large n(#-er o% %aith%(l c(sto#ers, there are 1resently over t o tho(sand co#1anies that are interesting in 7oining the a# ay %a#ily. there%ore, it sho(ld -e 1ossi-le %or the cor1oration to de#and %or increased service %ro# the #an(%act(rers. a# ay>s 1rod(cers that are located ithin the (s co(ld send goods ordered directly to the c(sto#er. this o(ld in #ost cases s2i1 t o ste1s in the 1resent
36

distri-(tion 1rocessP holesalers or agents, and a# ay>s o n distri-(tion centers. i (nderstand that this o(ld -e a too co#1licated 1rocess %or very large a#o(nts o% goods, as this o(ld reA(ire the #an(%act(rer to set (1 a ne distri-(tion de1art#ent, -(t %or s#aller a#o(nts o% -(l2y goods, this o(ld -e an e'cellent 1ro1osal. %or instance, i% a c(sto#er o(ld li2e to -(y a re%rigerator %ro# a# ay>s #ail order catalog(e, this re%rigerator 1resently has to go %ro# the #an(%act(rer to the holesaler, to one o% a# ay>s grand distri-(tion centers, and then to the c(sto#er. in #y %inal 1ro1osal, this 1artic(lar 1rod(ct o(ld only go thro(gh one ste1, %ro# the #an(%act(rer to the c(sto#er.

37

Re ommended solut!on" i strongly -elieve that the %irst sol(tion descri-ed in this 1a1er is the #ost s(ita-le sol(tion %or the a# ay cor1oration today. -y setting (1 #ore distri-(tion centers, the cor1oration ill -e a-le to co##(nicate ith the c(sto#ers and the direct distri-(tors. the 1rocess o% distri-(tion ill -e less e'1ensive, as individ(al goods !in orders$ do not have to -e carried as %ar as -e%ore. it is less e'1ensive to trans1ort 1rod(cts in -(l2, rather than sending a %e 1rod(cts at a ti#e. -y i#1lanting this 1ossi-le sol(tion, the cor1oration ill -e a-le to trans1ort large A(antities o% 1rod(cts to the distri-(tion centers, and there-y save trans1ortation costs, and %(rther#ore, increase the s1eed o% delivery o% the 1rod(cts to the c(sto#ers. today, it is cr(cial t satis%y c(sto#er>s needs. the ti#e and 1ossession (tility o% 1rod(cts are very i#1ortant to satis%y, as c(sto#ers o(ld not -(y a 1rod(ct that is too e'1ensive !trans1ortation costs$, or a 1rod(ct that is not availa-le ithin a !%or the c(sto#er$ reasona-le ti#e 1eriod.

38

S*%T A,A&+SIS %F A(*A+= S*%T A,A&+SIS" S ot analysis is a strategic 1lanning #ethod (sed to eval(ate the strengths, ea2nesses, o11ort(nities, and threats involved in a 1ro7ect or in a -(siness vent(re. 6t involves s1eci%ying the o-7ective o% the -(siness vent(re or 1ro7ect and identi%ying the internal and e'ternal %actors that are %avora-le and (n%avora-le to achieve that o-7ective. STRE,)TH" -ased on direct selling o1erations. hence it can -e a ho#e -ased -(siness. every one can 1artici1ate in -(siness. itDs easy to get ad#ission in a# ay ith easy ro(t li2e intent. training to sta%%. %(nctions are 1er%or#ed -y i-os. organi?e #eetings and events ti#e to ti#e. have good c(sto#er service syste#. -ac2ed -y a 1//4 c(sto#er 1rod(ct re%(nd 1olicy 1rod(ce %aith and reselling attit(de in c(sto#ers. A(ality 1rod(cts that ins1ire con%idence. al#ost no ris2 o% #oney as orld class A(ality #ini#al start (1 costs gives strong -ase to the initiation o% -(siness. so everyone can 1artici1ate in -(siness. the 1erson
39

ho ants do so#ething can -e #a2e 1ro%it ith invest#ent o% lo cost. 1rod(cts are easy to sell. a -(siness ith national and international sco1e gives #ore o11ort(nity to the cost(#ers. the 1ossi-ility o% %inancial sec(rity and %reedo# o% ti#e to en7oy li%e.

W&AO8&SS= More 1o er to i-os gives critical str(ct(re to organi?ation. 6nitially high entry cost leads to so#e hat restrictions %or -(siness develo1#ent. R(#ors %or direct selling o1erations.

)oc(s shi%ted %ro# selling 1rod(cts to recr(iting.

*11(rt(nities= Set(1 a #an(%act(ring 1lant in all co(ntries leads to -etter 1lat%or# %or co#1any. Po1(lation o% india gives -etter o11ort(nity to co#1any to receive #ore 1ro%it. As the co#1any na#e itsel% gives reliance and %aith %or the c(sto#er and -(yer 1rod(ce greater o11ort(nity %or #ar2eting hich leads to decrease in total e'1endit(re o% co#1any.
40

 <hreats= <oo #(ch %reedo# to i-os. "hange in govern#ent 1olicy #ay a%%ect to the 1ro%it and %reedo# o% co#1any. "o#1etitors li2e avon, #ary 2ayP s(nrider creates lot o% co#1etition in #ar2et hich leads to strong #ar2eting co#1etition in #ar2et.

41

S'))ESTI%,S" <rial 1ac2s sho(ld -e (sed -eca(se c(sto#er #(st have to introd(ce the 1rod(ct. *nce c(sto#er gets idea a-o(t 1rod(ct he co#es to 2no advantages o% 1rod(cts. <he 1rod(cts sho(ld -e chea1 the ho#e delivery syste# ta2es at least t o days to deliver the 1rod(cts so the delivery sho(ld -e instant. <here #(st -e #(lti1le o1tions %or 1(rchasing the 1rod(cts %or distri-(ters li2e online, tale and instant 1(rchasing. 6n every city, the a# ay o%%ice sho(ld -e sit(ated in s(ch a location so that it is in reach o% all distri-(ters.

42

"*8"NUS6*8= A co(1le o% years ago, a# ay %aced decreasing in 1ro%its d(e to an ine%%ective distri-(tion net or2. <he e'ec(tive #anage#ent develo1ed a ne conce1t o% distri-(tion channel this as %acilitated -y decreasing the a#o(nt o% ste1s needed in the distri-(tion 1rocess o% a good %ro# the #an(%act(rer to the c(sto#er. 6nstead o% sending everything %ro# three grand distri-(tion centers, s#all distri-(tion centers ere -(ilt over a large geogra1hical area. 3y doing that, a# ay as a-le to increase the coverage o% it>s 1rod(cts, decrease the ti#e needed %or trans1ortation, and decrease the cost o% distri-(tion. As ti#e and 1ossession (tility are cr(cial to the c(sto#er, and that the cor1oration as a-le to 1artly satis%y these %or a greater #a7ority o% the 1eo1le, the a#o(nt o% sales increased. 6 -elieve that there are -asically three di%%erent sol(tions to the 1ro-le# concerning the distri-(tion 1ath ay o% 1rod(cts %ro# #an(%act(ring to c(sto#er. <hese areP increasing the a#o(nt o% s#all distri-(tion centers thro(gho(t the geogra1hical #ar2et share, second, start (sing a# ay>s hole sellers as direct distri-(tors to the c(sto#er, and %inally to shi1 1rod(cts directly %ro# #an(%act(ring to the c(sto#er. As the c(rrent #ar2et is very co#1etitive in a# ay>s %ield o% o1erations, it is cr(cial to -e a-le to #aintain a 1o er%(l #ar2et share. <his can only -e done -y satis%ying c(sto#er needs.

43

6 -elieve that these needs can -e satis%ied -y ens(ring that ti#e and 1ossession (tility are availa-le %or the 1rod(cts.

44