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Amway Case Study Analysis

The paper will provide a brief a discussion of the Amway, specifically focus on relevant information, SWOT and pestle. Amway is often stance for the full name of the company such as “American Way".  .It is an American multi-level marketing business that retails   various health, beauty products which enhance the wellbeing and health of   health conscious population. The business was originated in 1959 by Jay Van Andel as well as Richard DeVos. The company is grounded in Ada, Michigan.  There are various sister concerns of this multi-level company which bring revenue around the globe. For example, Amway and its sister companies under Alticor stated auctions of $8.4 billion in 2019 by selling various high end products. It conduct business through a number of allied corporations majority of countries as well as territories. India is one of the major consumer of the company and major contributor of $8.4 billion in revenue. Amway has been examined in numerous countries and by organizations such as the Federal Trade Commission (FTC) for suspected pyramid scheme practices. However, despite the pyramid scheme practices,   it has never been found guilty. The payment is another fact which reduce the tendency for pyramid scheme practices. Therefore, it has paid tens of millions of dollars to settle these suits. Headquarters of the company is Ada Township, Michigan, United States which enable the company to develop products and sell around the globe for bringing revenue from various consumers.  However, the brand usually have various competitors such as Naked Poppy, Dollar Shave Club, Purplle.com, Avon Products and  Oriflame which  also bring  revenue in various  part of world with better marketing strategy.  The USP of the company is that “we provide various diversified product range”.  It is fundamental to assess the various aspect so that drawbacks can be addressed. For example, for company direct selling and thereby eliminating any interference from mediators. Amway was considered as one of the company delivering expensive products which affected its sale. The prices of its products were kept higher which discouraged the lower income groups from procurement the product. Hence, it is suitable for the company. However, the team realized the disadvantage of the company and worked on it by raising all its goods sell around the globe for bringing revenue from various consumers. Amway was established in the US, but it is a multi-national business with several different types of products and different lines and lengths of products. The current statistics highlighted that the business of Amway has total revenue of $8.4 billion for the year 2019 and is steadily rising. Amway rarely advertises for its goods and often gather information or revenue through mouth of word promotion which might be positive and negative from both the aspects.

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The following paper will provide a SWOT and pestle analysis of Amway in below paragraphs.

Discussion:

Strength of Amway:

  • It has a strong global influence on the around the globe.  It does not dependent on the single market revenue as over 80 countries with over 3 million business holders
  • The affiliation is major for the company. For example, Amway gained a significant number of awards for their high end products.  The awards like Asia Pacific Frost as well as Sullivan Filtration Company of the year Award along with LEED gold certification etc. increased their revenue around the globe.
  • The product range is also higher to lower for the company. For example, Amway proposed around 115 products in 5 dissimilar categories such as personal care, nutrition and wellness, home based care, cosmetics and gift catalogue.
  • They also engage with wide range of customers which can be considered as the major strength for the product. The   Amway’s product collection caters to an extensive range of consumers from the younger generation to older adults. However, considering the target market, women are the main consumers of Amway products with the middle aged women to younger women as the target market segment.

Weakness of the company:

  • It is highly expensive with charges a premium or high prices for its products. Hence, it exhibit low retention in the low-income consumers.  Hence, target market for the company is solely is limited to the premium segment of the company.
  • It has limited social media campaign which reduce their revenue. The current investigations highlighted that the company do not believe in advertisement on TV or through a brand ambassador. Therefore, even though they have highly expensive with charges a premium and gained revenue based on it,   the company is totally dependent on word of mouth publicity in order to gain their revenue.
  • Multi-level marketing is another weakness for the company.  The underlying reason is that Multi-level marketing is highlighted to be a risky business as well as the supply chain management for the product can collapse at any time when a top player leaves or creates any other issue.
  • The mode of obtainability of Amway’s product is through business agents. Hence they often miss the retail sale and the impact of those is small and restricted by the area.

Opportunities for Amway:

  • The company has a scope for increasing availability around the globe.  Amway should upsurge the obtainability of its products as well as   the product must explore more mediums to expand its client base.
  • The company has a scope for using dissimilar styles of communication in order to enhance consumer engagement.  Amway should also look to capitalize in communication as well as must explore options such as digital marketing to advertising internationally.
  • As the company develop various health products and other beauty care products, Tie-ups with salons as well as health experts. The company must also explore the various option of tying up with salons, beauty experts as well as health experts.

Threats of the company:

The major threat of the company is that   is the very nature of Amway’s business. For example, multi-level marketing is highlighted as the major threat to the Company. The volatility of consumer preferences and the limited channel of product selling should also be considered threats to Amway’s business. Moreover, low cost of product switching also acts as a threat to Amway’s global business.

Pestle of the company:

The PESTLE framework is highlighted as the major framework which enable the company to   identify the factors that is affecting its work externally.  The framework encompasses political, economic, social, technological, legal and environmental to provide greater insight in to the factors.  The pestle analysis of the company are following:

Political

  • The company usually have a strong market because it has payments provided by the government and hence, company   gain significant revenue.
  • It has a product base which influence various government policies and products.
  • The major changes were   done through the government in its policies and products.
  • The role of local government has fundamental role in enhancing strong market for the company.
  • Rules and regulations are extremely well developed and enhance the quality  of the product.
  • Political stability

Economic

  • It has a significant Fiscal and monetary policies which has invested in the economic factors.
  • Spending’s for the company was   made by the government
  • Income of the household are also enhanced the economic
  • Inflation and deflation rate
  • With the growing  year, the growth of the economy  enhances
  • Pricing in local and international market
  • Local production

Social

  • The attitude of the business as well as  the people employees are amazing
  • The company support in terms of finance and human and take part in various social
  • Understanding the contract between government and society
  • Population of the genders
  • Health standard upheld by the people
  • They also offer business helper programs. Similarly, the company often support societies as well as foster the health of individuals.

Technological

  • Setting up research as well as  expansion department in order to  bring  revenue
  • Developing products based on feedback of the consumers. However,Amway should also look to capitalize and gain the communication network through the social media.
  • Authorizing the supply chain associates in order to gain the revenue in multilayers.
  • Easy payment methods

Environmental

  • Type of weather prevailing
  • Change in the climatic conditions
  • Governments efforts to control pollution
  • Endangering any specie

Legal

  • Laws connected to knowledgeable property as well as data protection
  • Reasonable action  for all employees promote equity
  • Following the health and safety laws
  • Maintaining quality and affordable prices

Conclusion:

 On a concluding note, it can be said that Amway is the one of the highest revenue company. Sister concerns of this multi-level company which bring revenue around the globe. For example, Amway and its sister companies under Alticor stated auctions of $8.4 billion in 2019 by selling various high end products. It conduct business through a number of allied corporations majority of countries as well as territories. India is one of the major consumer of the company and major contributor of $8.4 billion in revenue. Amway was established in the US, but it is a multi-national business with several different types of products and different lines and lengths of products. The current statistics highlighted that the business of Amway has total revenue of $8.4 billion for the year 2019 and is steadily rising.  However, it has a various company competitor which has a  significant role in reducing revenue.

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