Chapter – 1 Amway – history Products
INTRODUCTION.
what is Amway? Amway is a direct selling company and manufacturer that uses network marketing to sell a
variety of products, primarily in the health, beauty, and home care markets. Amway was founded in 1959 by Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company and family of companies under Alticor reported sales growth of 9.5%, reaching US$9.2 billion for the year ending December 31, 2010 Its product lines include home care products, personal care products, jewelry, electronics, Nutrilite dietary supplements, water purifiers, air purifiers, insurance and cosmetics. In 2004, Health & Beauty products accounted for nearly 60% of worldwide sale] Amway conducts business through a number of affiliated companies in more than a hundred countries and territories around the world. Amway was ranked No.114 among the largest global retailers by Deloitte in 2006, and No.32 among the largest private companies in the U.S. by Forbes in 2010. Amway's business practices have been the subject of controversy and the company has been involved in several court cases in the United States, Canada, and elsewhere.
1.1 Amway-Global Leader in Direct Selling
Amway is a global leader in direct selling, with over three million Independent Business owners (IBOs) in over 80 countries and territories around the world.nomber one company other direct selling company can compare with our longevity, stability, and global reach.
For more than 45 years, Amway Corporation has enabled people to have a business of their own. Originally known for direct selling of our household cleaningproducts, such as SA8 Laundry Detergent and L.O.C. Liquid Organic Concentrate, our business opportunity is now supported by
INTRODUCTION.
what is Amway? Amway is a direct selling company and manufacturer that uses network marketing to sell a
variety of products, primarily in the health, beauty, and home care markets. Amway was founded in 1959 by Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company and family of companies under Alticor reported sales growth of 9.5%, reaching US$9.2 billion for the year ending December 31, 2010 Its product lines include home care products, personal care products, jewelry, electronics, Nutrilite dietary supplements, water purifiers, air purifiers, insurance and cosmetics. In 2004, Health & Beauty products accounted for nearly 60% of worldwide sale] Amway conducts business through a number of affiliated companies in more than a hundred countries and territories around the world. Amway was ranked No.114 among the largest global retailers by Deloitte in 2006, and No.32 among the largest private companies in the U.S. by Forbes in 2010. Amway's business practices have been the subject of controversy and the company has been involved in several court cases in the United States, Canada, and elsewhere.
1.1 Amway-Global Leader in Direct Selling
Amway is a global leader in direct selling, with over three million Independent Business owners (IBOs) in over 80 countries and territories around the world.nomber one company other direct selling company can compare with our longevity, stability, and global reach.
For more than 45 years, Amway Corporation has enabled people to have a business of their own. Originally known for direct selling of our household cleaningproducts, such as SA8 Laundry Detergent and L.O.C. Liquid Organic Concentrate, our business opportunity is now supported by
an excellent portfolio of hundreds of High-quality products and brands that can only be purchased through our IBOs .
History of Amway.
Jay Van Andel and Richard DeVos, friends since school days, had been business partners in various endeavors including a hamburger stand, air charter service, and a sailing business. In 1949 they were introduced by b y Neil Maaskant (Van Andel's second cousin) to the Nutrilite Products Corporation. Nutrilite was a California-based direct sales company founded by Dr. Carl Rhenborg, developer of the firstmultivitamin firstmultivitamin marketed in the United States. In August 1949, after a night-long talk, DeVos and Van Andel signed up to become distributors for Nutrilite food supplements. They sold their first box the next day for $19.50, but lost interest for the next two weeks. Shortly thereafter, at the urging of Maaskant, who had become their sponsor, they traveled to Chicago to attend a Nutrilite seminar. The meeting was at a downtown hotel, with over a hundred people in attendance. After seeing promotional filmstrips and listening to talks by company representatives and successful distributors, they decided to pursue the Nutrilite business opportunity with enthusiasm. They sold their second box of supplements on their return trip to Michigan, and rapidly proceeded to develop their new business further. In 1949, DeVos and Van Andel had formed Ja-Ri Corporation (abbreviated from their respective first names) for importing wooden goods from South American countries. After their trip to the Nutrilite seminar, they droped this business and Ja-Ri became their Nutrilite distributorship. In addition to profits on each product sold, Nutrilite also offered commission on the sales of products by new distributors introduced to the company by existing distributors — a system today known as multi-level marketing or network marketing. By 1958, DeVos and Van Andel had built an organization of over 5,000 distributors. However, following concerns about the stability of Nutrilite, in April 1959 they and some of o f their top distributors formed The American Way Association to represent the distributors and look for additional products to market. market.[11] Their first product was called Frisk, a concentrated organic cleaner developed by a scientist in Ohio. DeVos and Van Andel bought the rights to manufacture and distribute Frisk, and later
changed the name to LOC. They subsequently formed Amway Sales Corporation to procure and inventory products and to handle the sales and marketing plan, and Amway Services Corporationto handle insurance and other benefits for distributors (Amway being an abbreviation of "American Way").In 1960 they purchased a 50% share in Atco Manufacturing Company in Detroit, the original manufacturers m anufacturers of LOC, and changed its name to Amway Manufcturing Corporation In 1964 the Amway Sales Corporation Amway Services Corporation, and Amway Manufacturing Corporation merged to form a single entity, Amway Corporation[15] Amway bought control of Nutrilite in 1972 and full ownership in 1994.
WHAT ARE IT’S PRODUCTS? PRODUCTS?
Amway Products We are proud of our products, which generally fit into the health and beauty categories. Our focus has been on developing products that outshine the competition so that we can give our IBOs the competitive edge they need to build strong, thriving businesses.
ARTISTRY Cosmetics and Skin Care Our scientists and formulators have developed the complete line of ARTISTRY cosmetics, now ranked as one of o f the top five prestige cosmetic brands in the world. Along with the beautiful color products for eyes, e yes, cheeks, lips and nails, the aretistry line of skin care products offers entire skin care systems, customized for your own skin, as well as superior formulations to repair your skin, protect it, and prevent additional damage.
Eddie Funkhouser Cosmetics And, the exclusive, E.Funkhouser New York line of trendy, high-fashion color cosmetics created by makeup artist Eddie Funkhouser will bring out your inner star qualities.
NUTRILITE Nutritional Supplements NUTRILITE is the world's leading brand of vitamin, mineral and dietary supplements. (Based on 2006 sales). We are proud to be the only source of NUTRILITE nutritional products, a respected name in supplementation around the world. Our vitamin, mineral, and herbal supplements are made from plants grown on our own certified organic farms in California, Washington, Mexico, and Brazil and manufactured under the strictest of standards to ensure consistency, quality and safety. Our best known multivitamin, DOUBLE X (TRIPLE X in Japan) Multivitamin/Multimineral Supplement, provides the nutrients that might be missing from your diet. And, we combine natural phytonutrients, the beneficial nutrients found in plants, to create specific supplements targeted to address your individual needs, as well. We grow most of our raw materials on our own farms, and organization. we only use raw. materials grown on other farms if those farms adhere to our own strict standards.
Amway Personal Care Products Satinique and protique haircare products, body series and g&h soaps, lotions, and body shampoo, the tolsom line of men's skin care products, and the glister oral care system manage your personal care from head to toe.
Amway home care products if it is cleaner laundry, easier dishwashing, and immaculate household surfaces you seek, the sa8, dish drops, l.o.c. and pursue brands will do the job quickly and thoroughly, with stunning results. the espring water purifier, the atmosphere air treatment system, and the icook cookware line round out our portfolio, providing cleaner air, cleaner water, and healthier meals for families worldwide.
Amways Household cleaners Amway is best known in North America for its original multi-purpose cleaning product LOC, SA8 laundry detergent, and Dish Drops dishwashing liquid. In the January 2007 issue of Consumer Reports, SA8 with Bioquest was rated the best-performing laundry detergent, scoring 99 out of a possible 100 points.[27] Consumer Reports did, however, criticise SA8's pricing, a situation which was disputed by Amway] Consumer Reports conducted blind testing of detergents in 2010 and ranked versions of Amway's Legacy of Clean detergents 9th and 18th of 20 detergents tested. Consumer Reports program manager Pat Slaven recommended against buying the products because consumers can "go to the grocery store and get something that performs a whole lot better for a whole lot less mone y Amways Health and beauty products Amway's health and beauty brands include Artistry, Beautycycle, Time Defiance, Artistry Essentials, Pure White, Satinique, Tolsom, Body Series, Glister, Moiskin (South America), Nutrilite, Nutriway (Scandinavia
and
Australia/New
Zealand),
eSpring, Atmosphere and iCook as well as XL and XS Energy drinks. Nutrilite Amway's largest selling brand is the Nutrilite range of health supplements (marketed as Nutriway in some countries), and in 2008 Nutrilite sales exceeded US$3billion globally In 2001,
five Nutrilite products were the first dietary supplements to be certified by NSF International. Surveys by independent group Consumerlab.com since 2002 have rated Nutrilite as having the highest customer satisfaction rating (96% in 2006) in the direct selling/MLM brand category. In 2006, 2007, 2008, and 2009 in the nutrient and health food category, Nutrilite won "Platinum" and "Gold" awards in Malaysia, China, Taiwan, Thailand, and Asia overall in the Reader's Digest "Trusted Brands of Asia" survey In 2008 Nutrilite scientists, in partnership with Alticor subsidiary Interleukin Genetics won the 12th John M. Kinney Award for Nutrition and Metabolism for their research into the interaction between nutrition and genetic In January 2009, Amway announced a voluntary recall of Nutrilite and XS Energy Bars after learning that they had possibly been manufactured with Salmonella-contaminated ingredients from Peanut Corporation of America. The company indicated that it had not received any reports of illness in connection with the products Amways eSpring Amway's eSpring water filter, introduced in 2000, was the first home water treatment system to incorporate a carbon block filter and Ultraviolet disinfection unit, becoming the first home system to achieve certification for ANSI/NSF Standards 42, 53 and 55] The unit was also the first commercial product to include sister company Fulton Innovations eCoupled wireless power induction technology. Fulton Innovation introduced the technology in other consumer electronic products at the 2007 International Consumer Electronics Show. Companies licensing this technology include General Motors, Motorola and Visteon In 2006 eSpring was named Product of the Year by the Poland-based non-profit World Foundation of Health, Heart and Minimum eSpring has won numerous Gold and Platinum awards in the Reader's Digest Most Trusted Brand Asia surveys.
Chapter 2 Direct selling History Success of amway in direct selling
Idea of direct selling
Direct marketing is a channel-agnostic form of advertising that allows businesses and
nonprofits to communicate straight to the customer, with advertising techniques such as mobile messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, and outdoor advertising. Direct marketing messages emphasize a focus on the customer, data, and accountability. Characteristics that distinguish direct marketing are: 1. Marketing messages are addressed directly to customers. Direct marketing relies on being able to address the members of a target market. Addressability comes in a variety of forms including email addresses, mobile phone numbers, Web browser cookies, fax numbers and United States and international postal addresses. 2. Direct marketing seeks to drive a specific "call to action." For example, an advertisement may ask the prospect to call a free phone number or click on a link to a website. 3. Direct marketing emphasizes trackable, measurable responses from customers — regardless of medium. Direct marketing is practiced by businesses of all sizes — from the smallest start-up to the leaders on the Fortune 500. A well-executed direct advertising campaign can prove a positive return on investment by showing how many potential customers responded to a clear call-toaction. General advertising eschews calls-for-action in favor of messages that try to build prospects’ emotional awareness or engagement with a brand. Even well-designed general advertisements rarely can prove their impact on the organization’s bottom line
Popularity of Direct Advertising
A recent study [1] by the Direct Marketing Association reports that in 2010, marketers – commercial and nonprofit – spent $153.3 billion on direct marketing, which accounted for 54.2% of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures generated approximately $1.798 trillion in incremental sales. In 2010, direct marketing accounted for 8.3% of total US gross domestic product. Also in 2010, there were 1.4 million direct marketing employees in the US. Their collective sales efforts directly supported 8.4 million other jobs, accounting for a total of 9.8 million US jobs
History
Mail order pioneer Aaron Montgomery Ward knew that by using the technique of selling products directly to the customer at appealing prices could, if executed effectively and efficiently, revolutionize the market industry and therefore be used as an innovative model for marketing products and creating customer loyalty. The term "direct marketing" was coined long after Montgomery Ward's time. In 1967, Lester Wunderman identified, named, and defined the term "direct marketing". Wunderman — considered to be the father of contemporary direct marketing — is behind the creation of the toll-free 1-800 number and numerous loyalty marketing programs including the Columbia Record Club, the magazine subscription card, and the American Express Customer Rewards program. In 1872, Aaron Montgomery Ward produced the first mail-order catalogue for his Montgomery Ward mail order business. By buying goods and then reselling them directly to customers, Ward was consequently removing the middlemen at the general store and, to the benefit of the customer, drastically lowering the prices The Direct Mail Advertising Association, predecessor of the present-dayDirect Marketing Association, was first established in 1917 Third class bulk mail postage rates were established in 1928.
Benefits of direct selling
Direct selling is a good way to meet and socialize with people.
Direct selling offers flexible schedules.
Direct selling is a good way to earn extra income.
Direct selling is a good way to own your own business.
Anyone can do it – There are no required levels of education, experience, financial resources or physical condition. People of all ages and from all backgrounds have succeeded in direct selling.
You’re your own boss, which means you can: o
Work part-time or full-time – you choose when and how much you want to work.
o
Set your own goals and determine yourself how to reach them.
o
Own a business of your own with very little or no capital investment.
o
Receive training and support from an established compan y.
Direct marketing pie chart
Amway’s working employees in India
Total employees in india
men women couples
Amway’s working employees in USA
Total employees in USA
men women couple
Chapter 3 Success story of AMWAY The concept of direct marketing Benefits for distributors Organization type and business opportunity 7 secrets of marketing your Amway products. Amway IT deployment PEST OF AMWAY SWOT OF AMWAY
Success story of amway direct marketing
Amway India is using state-of-the-art technologies to ensure that all business information is available in real-time and all Amway offices and distributors are connected anytime, all the time Efficient information system is the heart of Amway operations. The objective of all our IT initiatives is to ensure that we have a strong heart to support other organs by providing real time information any time, any place Amway’s long-term IT vision and the deployment of relevant information technology systems to
make communication real-time, has enabled it to implement an effective business model For Amway India the Rs 553 crore subsidiary of US-based $5 billion Amway Corporation, Information Technology has played an integral part in making it one of the biggest success stories in the direct marketing space in the country. With 45 offices and 3.10 lakh active distributors (apart from other distributors), and third-party contract manufacturers spread across the
Rajeev Arya,
country, contemplating operations without an effective automated system was an unthinkable task for the company’s management. The company’s state-of-the-art IT infrastructure has prompted Rajeev Arya, director, information technology & business systems, Amway India Enterprises, to call it a ―min i technology company.‖ What makes the company worthy of this title is not just its strategic IT vision, but
also its intrinsic technology strength. The fact that Amway has a 25-member IT team, and that almost 60-70 percent of its total capital investment is directed towards funding IT initiatives, is proof that IT is serious business at Amway.
THE CONCEPT OF DIRECT- MARKETING
How does an amway distributer earns? whatever a person earns, he goes to spend it to the market, for example if a person goes to a market with rs. 4000 with him, there he purchase products of day-to-day uses. the cost price of that product is rs.1600 in the factory, but he gets it @ rs.4000 because of the middlemen (advertisers, wholesalers & retailers). 60% of the money is distributed among the middlemen. back to 45 years, there were two friends with a dream to give every individual a chance to do a business, which will be tension free and in the same way make rich. today they have achieved their dream.
BENEFITS FOR DISTRIBUTER.
The company provides world class products to the distributers. They also gets profit from the sales model of the company which is beyond their imagination that’s because it is fully acceptable and honest so that you can believe and have
full trust and confidence on it.
1. Full information about the product. 2. Full instruction on how to use the product properly and get 100% advantages of it. 3. Qualities of products. Guarantee of full satisfaction from the use of the product by the company is one of the most important attractions of this business. These benefits of distributers are kept reserved by the company’s ―CUSTOMER PRODUCT REFUND POLICY‖. Some important attractions/ benefits for the distributers.
With the help of this business after being a distributer can establish his own (independent) business all over the INDIA.
To be successful in this business one need ―VERY LESS AMOUNT‖ and ―DESIRE TO BE SUCCESSFUL‖.
If any distributer wants to leave the business can leave get the money back by returning the BUSINESS KIT within 90 days of joining.
Organization type and Business Opportunity:
The Amway is private co operative organization. The Amway Sales and Marketing Plan put you in control, allowing you the flexibility to work where and when you want, giving you time for family and friends as well as the opportunity to earn a good income. It adapts easily to
your needs and ambitions, and grows with them, offering you all the personal support and assistance you require to become the Business Owner you want to be. With Amway you are Connected to the global leader in multilevel marketing, with over 40 years of experience, Supported by great products and people who will help you succeed, and finally In Control of
your life.
Sales and Marketing Plan:
The Amway Sales and Marketing Plan is a low risk, low start-up cost business opportunity that is open to everyone. It allows you to build your business through retailing products and sponsoring other people who, in turn, can retail products and offer the business opportunity to others. By passing your sales and marketing knowledge to your developing team, you not only build your own business network but also enable others to build one of their own. Marketing strategy:
A strategy is a plan of action designed to achieve the goals of the organisation. In creating a marketing strategy for the Super Concentrated Cleaning System, Amway needed to set out the key objectives it wanted to achieve. The following objectives for the brand were set:
To increase distribute or profitability and productivity by providing a new and exciting business opportunity
To optimize consumer convenience and value through enhanced product differentiation with this exclusive and revolutionary cleaning system
To provide innovative and unique products to enhance the image of Amway Home Care.
A New Strategy of Amway:
Agreement with the government and company
resumed operations
Goods will be sold in retail outlets and through
sales representatives
Income of sales distributors will be based on direct selling done b y them
Same Distribution centers served as retail outlets for the company
Localization of employees
Localization of production and Raw Material
Localization of research and development
Transparency and Credibility of company’s management
Functional pattern of Amway:
Following are the main departments of Amway: 1. Finance and accounts. 2. Marketing and Sales. 3. Human resource and administration.
Amway Global provides you with support like:
Customer care: If you have a question about anything - like registration, renewal,
Business, or product information - our Customer Care Associates can help you.
Business management: You can manage your business, check customer Volume, order
products, and renew your business, all at Amway Global.com.
Order management: You sell the products, and we'll do the rest, like process the order,
manages your customer accounts, and handles the shipping details.
Training: Online, video, and instructor-led training are some of the ways we can share
with you the knowledge to grow a successful independent business.
Marketing: We support your sales efforts with DVDs, online sites, Magazines,
brochures, and free websites you can personalize. And we help Build awareness of your products and brands with national advertising, promotions, and event sponsorship. Amway believe that quality improvement happens when people come together. This core belief is what all AOF initiatives are based upon and it holds true time and again. With a passionate and vigorous workforce ready to contribute their bit to the well-being of society, volunteering becomes a way of life in Amway. The 550,000 Amway distributors and 450 fulltime employees are all considered AOF volunteers. At 56 Amway offices across India, AOF has formed a team of 6 or more distributors and employees to form a Local Implementation Committee (LIC). LIC takes ownership of being the face of Amway’s CSR at the location. They
identify potential partners, form a project, and implement this with other volunteers. The LIC also plays a lead role in raising funds they wish to utilize. The beauty of this system is that the LIC raises the funds, and then decides how best to utilize this in their town or city.
Strategic analysis to overcome problems:
Today it is a global business that, along with its parent and sister companies, directly employs 10,000 people worldwide. The business also operates strategically at a Global, European and National level. Amway (UK) began operations in 1973 and has its own distribution and Product Selection Centers. Amway has helped millions of people around the world to start their own independent business, through which they engage in person-to-person marketing. This type of direct selling involves matching a consumer's needs with the goods and services on offer. The better the match, the more lasting the relationship between the seller and the buyer.
secrets to marketing your Amway products. 1. Word of Mouth:
The best way to market your Amway products is to get your friends and family involved and to tell them to spread the word. This is probably the cheapest and most effective way of getting people to buy from you and join your business. This can be done by holding conference calls and meetings or even hosting parties where everyone you know (and every they know) is invited. Hold conventions and workshops in your field or even host a charity event. 2. Buy Leads:
Buying leads from leads companies is probably the next most powerful offline strategy. This strategy basically involves calling up complete strangers and using your
telephonic sales skills to persuade prospects to trust you and to join your business. This strategy basically involves talking on the phone for hours at a time. 3. Print! Print! Print!
Printing out business cards, flyers, post cards, automobile wraps and a lot more is a great way to spread the word about your business. Printing ads in newspapers and magazines can be a bit more expensive since you’ll have to pay for ad space. However, if the
newspaper in question is widely acclaimed and has a large circulation coverage, you’ll get instant recognition. 4. Send out Promotional Releases:
This is another print technique but it isn’t as pricey. However, it is just as
dynamic as selling through newspapers and magazines. And although you’ll be marketing your opportunity, you will also be giving the press folk a topic to write about. 5. Broadcast yourself:
If you have the money, then using live broadcasts in radio and television will advertise your business in the best way. You can pay television and radio stations for airing time to showcase your commercials. Your audience and future customers will come from all areas of life and from diverse generations.
6. Give out freebies:
Everybody loves to take away freebies! Use this technique to market your site. Give away stuff that have your website URL printed on them. Anything from pen drives to caps will work for you.
7. Take your business online:
Once you have a website or blog, you can utilize many of the online strategies to increase your downline. Submit articles and blogs about your business opportunity. Create classified ads and take part in discussion forums. Sign up with a social networking site and start a community
Amway’s IT Deployment
ERP:
The ERP system of Amway India was developed in-house. Though generic, the system has been adequately customised to suit Indian conditions. The main modules of the system include order management, inventory management, financial management and bonus calculation, purchase order, HR and payroll systems. According to Arya, some of the modules are also integrated with the global ERP system in order to track the Indian business as part of the global entity.
According to Arya, this system takes care of its distributor accounting, inventory, freight and logistics issues too. Once a distributor acquires a customer, the company has to ship the product to the customer’s location, which is tracked by the ERP system. For instance, if the order needs
to be delivered in Patna, the system will find out the closest warehouse from which the order can be shipped. The system’s inventory management control ensures that stocks are always available.
In the event of a sale, the system does all the tracking and automatically issues and disburses the cheques to the recipients down the supply chain. It even credits the money to their individual accounts, even though they may be in different banks. The complete HR process, from recruitment to salaries, is online. The fully automated HR and payroll system, is a browser-friendly solution, which runs on ASP technology. According to Arya, HURIS, the human resource software, is the complete hub of information for the employee. The system facilitates features like online attendance, mid-year appraisals, annual appraisals and leave. The system’s e -paymaster, is an intensive payroll system, that facilitates employee-related remuneration. Amway’s HR system, and to some extent the payroll system, are currently running on it’s intranet. The company soon plans to include the purchase order and
travel approval systems, on the Intranet. From five offices and a reach of 150 location in May 1998, Amway now has 45 offices catering to around 400 cities and towns across the country. By 2002, it plans to increase this number to 47 servicing spread over 450 cities and towns. The sheer magnitude of Amway’s operations required
an efficient information system. All Amway warehouses, pick-up centres (PUCs) and offices are connected online, so that inventory planners have access to real-time sales and inventory data. Amway is now focussing on integrating the back-end operations of its supply chain (manufacturing and material planning), into the overall process. The vision is to have a fully integrated and seamless supply chain, whereby a product sale at one end generates an IT Vision of amway.
Amway’s direct selling business model, warranted the need for in-house expertise. In this, the
company was fortunate enough to leverage the technology expertise of its parent company. This gave the company a strong foundation to build upon. Ever since it set up operations in 1988, Amway has stressed on the importance of IT. The early hardware systems and IT processes including the indigenously developed ERP system were part of the package acquired from the parent company. With the initial systems in place Amway went on to fortify it, with one vision in mind ―Networked for the 21st century.‖
According to Arya, the need for a robust IT system was imminent considering the nature of Amway’s work processes. Under the direct -selling model, the company has a chain of
distributors, vertically as well as horizontally, selling its products. Since one distributor cannot sell all the products, he sponsors another who is below him on the chain. In Amway’s
distribution system, the chain can go as deep as possible. Furthermore, the benefit of every sale happening down the line goes to each level of the top line, on the basis of a certain formula. These sales have to be tracked on a monthly basis as the points achieved have to be reimbursed by the month-end itself, and cannot be carried over to the next month. What makes the managing of such a system a Herculean task is the sheer spread of the business operations. With over three lakh active distributors, the chain ripples as low as the 100th and 1000th level in the system, furthermore the person could be based anywhere in the country. ―There is a lot of complexity involved in tracking the sales and
accounts of each of the distributors at every level of the chain, as the sum due at each level is calculated on the basis of volumes generated by the distributor, as well as all his down lines,‖ explains Arya. Amway’s long-term IT vision and the deployment of relevant information technology systems to
make communication real-time, has enabled it to implement an effective business model. According to Arya, ―Amway India is using state-of-the-art technologies to ensure that all
business information is available in real-time and all Amway offices and distributors are
connected anytime, all the time.‖ This, in fact, is the mission stat ement guiding the choice of IT
systems (hardware and software), applications right from ERP, Interactive Voice Response System (IVRS), SMS, disaster recovery management and e-business, VoIP and the advanced communication system.
International expansion
Amway expanded overseas to Australia in 1971, to Europe in 1973, to parts of Asia in 1974, to Japan in 1979, to Latin America in 1985, to China in 1995, to Africa in 1997, to India and Scandinavia in 1998, to Russia in 2005, and to Vietnam in 2008. Quixtar
In 1999 the founders of the Amway corporation established a new holding company, named Alticor, and launched three new companies: a sister (and separate) Internet-focused company named Quixtar,Access Business Group, and Pyxis Innovations. Pyxis, later replaced by Fulton Innovation, pursued research and development and Access Business Group handled manufacturing and logistics for Amway, Quixtar, and third part y clients. The main difference was that all "Independent Business Owners" (IBO) could order directly from Amway on the internet, rather than from their upline "direct distributor", and have products shipped directly to their home. The Amway name continued being used in the rest of the world. After virtually all Amway distributors in North America switched to Quixtar, Alticor elected to close Amway North America after 2001. In June 2007 it was announced that the Quixtar brand would be phased out over an 18 to 24 month period in favor of a unified Amway brand (Amway Global) worldwide. In 2006, Quixtar published The Quixtar Independent Business Owner Compensation Plan, in which the company reported that the average monthly gross income for "Active" IBOs was $115.
Global markets According to the Amway website, as of 2011 the company operates in over 80 countries and territories, organized into regional markets: the Americas, Europe, greater China, Japan and Korea, and SE Asia/Australia. In 2008, Alticor announced that two-thirds of the company's 58 markets reported sales increases, including strong growth in the China, Russia and India markets…
Amway China
Amway grew quickly in China from its market launch in 1995. In 1998, after abuses of illegal pyramid schemes led to riots, the Chinese government enacted a ban on all direct selling companies, including Amway After negotiations, some companies like Amway, Avon, and Mary Kay continued to operate through a network of retail stores promoted by an independent sales force.[21] China introduced new direct selling laws in December 2005, and in December 2006 Amway was one of the first companies to receive a license to resume direct sales. However, the law forbids teachers, doctors, and civil servants from becoming direct sales agents for the company and, unlike in the U.S., salespeople in China are ineligible to receive commissions from sales made by the distributors they recruit. In 2006, Amway China had a reported 180,000 sales representatives, 140 stores, and $2 billion in annual sales. In 2007 Amway Greater China and South-east Asia Chief Executive Eva Cheng was ranked No.88 by Forbes magazine in its list of the World's Most Powerful Women.[23] In 2008, China was Amway's largest market, reporting 28% growth and sales of ¥17 billion (US$2.5billion) According to a report in Bloomberg Businessweek in April 2010, Amway had 237 retail shops in China, 160,000 direct sales agents, and US$3 billion in revenue. ….
Brands Amway's product line grew from LOC, with the laundry detergent SA8 added in 1960, and later the hair care product Satinique (1965) and the cosmetics line Artistry (1968). Today Amway manufactures over 450 products, with manufacturing facilities in China, India and the United States, as well as Nutrilite organic farms in Brazil, Mexico and the United States (California and Washington State). In addition, Amway affiliates market products from hundreds of other manufacturers offering everything from books (e.g. Barnes & Noble, North America) to wine (World of Wine, Europe).
Politics and culture Political causes
In the 1990s, the Amway organization was a major contributor to the Republican Party (GOP) and to the election campaigns of various GOP candidates. Amway and its sales force contributed a substantial amount (up to half) of the total funds ($669,525) for the 1994 political campaign of Republican congresswoman and Amway distributor Sue Myrick (N.C.). According to two reports by Mother Jones magazine, a liberal news organization, Amway distributor Dexter Yager ―used the company’s extensive voice-mail system to rally hundreds of Amway distributors into giving a total of $295,871‖ to Myrick’s campaign. According to a campaign staffer quoted by the
magazine, Myrick had appeared regularly on the Amway circuit, speaking at hundreds of rallies and selling $5 and $10 audiotapes Following the 1994 election, Myrick maintained ―close ties to Amway and Yager‖, and raised $100,000 from Amway sources, ―most notably through fundraisers at the homes of big distributors‖, in the 1997– 98 election cycle.
In October 1994, Amway gave the biggest corporate contribution recorded to that date to a political party for a single election – $2.5 million to the Republican National Committee – and was the number one corporate political donor in the U.S. In the 2004 election cycle, the organization contributed a total of $4million to a conservative 527 group, Progress for America.
In July 1996, Amway co-founder Richard DeVos was honored at a $3 million fundraiser for the Republican Party, and a week later, it was reported that Amway had tried to donate $1.3 million to pay for Republican "infomercials" and televising of the GOP convention on Pat Robertson's Family Channel, but backed off when Democrats criticized the donation as a ploy to avoid campaign-finance restrictions. In April 1997 Richard DeVos and his wife, Helen, gave $1 million to the Republican National Committee, which at the time was the second-largest soft-money donation ever, behind Amway's 1994 gift of $2.5 million to the RNC. In July 1997, Senate Majority leader Trent Lott and House Speaker Newt Gingrich slipped a last-minute provision into a hotly contested compromise tax bill that granted the DeVos family’s company, Amway, a tax break on its Asian branches, saving
it $19 million. In a column published in the Fort Worth Star-Telegram newspaper in August 1997, reporter Molly Ivins wrote that Amway had "its own caucus in Congress...Five Republican House members are also Amway distributors: Reps. Sue Myrick of North Carolina, Jon Christensen of Nebraska, Dick Chrysler of Michigan, Richard Rombo of California, and John Ensign of Nevada. Their informal caucus meets several times a year with Amway bigwigs to discuss policy matters affecting the company, including China's trade status." A 1998 analysis of campaign contributions conducted by Businessweek found that Amway, along with the founding families and some top distributors, had donated at least $7 million to GOP causes in the preceding decade. Political candidates who received campaign funding from Amway in 1998 included Representatives Bill Redmond (R-N.M.), Heather Wilson (R-N.M.), and Jon Christensen (R-Neb). According to a report by the Center for Public Integrity, in the 2004 election cycle, members of the Van Andel and DeVos families were the second, third and fifth largest donors to the Republican party Dick DeVos, son of Amway founder Richard DeVos and past president of the company, served as Finance Chairman of the Republican National Committee and his wife Betsy DeVos served as chair of the Michigan Republican Party from 1996 to 2000 and 2003 to 2005
In May 2005, Dick DeVos ran against incumbent Governor Jennifer Granholm in Michigan's 2006 gubernatorial election. DeVos was defeated by Granholm, who won 56% of the popular vote to Devos' 42%.
Religion
Several sources have commented on the promotion of Christian conservative ideology within the Amway organization Mother Jones magazine described the Amway distributor force as "heavily influenced by the company's dual themes of Christian morality and free enterprise" and operating "like a private political army." In The Cult of Free Enterprise, author (and former Amway distributor) Stephen Butterfield wrote ―[Amway] sells a marketing and motivational system, a cause, a way of life, in a fervid emotional atmosphere of rallies and political religious revivalism.‖ Philadelphia City Paper correspondent Maryam Henein stated that ―The language
used in motivational tools for Amway frequently echoes or directly quotes the Bible, with the unstated assumption of a shared Christian perspective.‖[ Businessweek correspondents Bill Vlasic and Beth Regan characterized the founding families of
Amway as ―f ervently conservative, fervently Christian, and hugely influential in the Republican Party‖, noting that ―Rich DeVos charged up the troops with a message of Christian beliefs and
rock-ribbed conservatism.‖] High-ranking Amway leaders such as Richard DeVos and Dexter Yager were owners and members of the board of Gospel Films, a producer of movies and books geared towards conservative Christians, as well as co-owners (along withSalem Communications) of a rightwing, Christian non-profit entity called Gospel Communications International. Rolling Stone' s Bob Moser reported that former Amway CEO and co-founder Richard DeVos is
connected with the Dominionist political movement in the United States. Moser states that DeVos was a supporter of the late D. James Kennedy, giving more than $5 million to Kennedy's Coral Ridge Ministries. DeVos was also a founding member and two-time president of the Council for National Policy, a right-wing Christian-focused organization.
Sociologist David
G.
Bromley calls
Amway
having sectarian characteristics. Bromley
and Anson
a
"quasi-religious
Shupe view
Amway
corporation" as
preaching
the Gospel of Prosperity.[70] Patralekha Bhattacharya and Krishna Kumar Mehta, of the consulting firm Thinkalytics, LLC, reasoned that although some critics have referred to organizations such as Amway as "cults" and have speculated that they engage in "mind control", there are other explanations that could account for the behavior of distributors. Namely, continued involvement of distributors despite minimal economic return may result from social satisfaction compensating for diminished economic satisfaction.
BENEFITS OF ASSOCIATION With Amway, you are never in business alone. In addition to the support you will receive from your sponsor, Amway provides you with world-class training, marketing, products, and customer support. When you become an Amway Independent Business Owner (IBO), you are connected to over 3 million
other
IBOs
in
more
than
80
countries
and
territories.
You are also represented by the Independent Business Owners Association International (IBOAI). For over 50 years, the IBOAI has been the official advocacy organization for IBOs. It’s your trade association and your voice with Amway. The IBOAI Board – IBO leaders elected to represent your interests – works closely with Amway to make productive changes to the business so it remains the best business opportunity in the world. You’re also connected to a local team of
affiliated IBOs who are there to support, encourage, and advise you as part of your business group. A vital part of this team is your sponsor who will help you get started and provide you with help and training along the way.You’re in business on your own, but you are never alone. With
Amway
at
your
side,
you
can
reach
the
goals
you
set
for
yourself!
Customer care: If you have a question about anything – such as registration, renewal, business,
or product information – our Customer Care Associates have answers to help you. Marketing: We support your sales efforts with DVDs, online sites, magazines, brochures, and
free websites you can personalize to grow your business. And we help build awareness of your
products and brands with national advertising, promotions, and event sponsorship. Order management: You retail the products, and we'll do the rest, such as process the order, manage
your customer accounts, and handle the shipping details.Training: Free and easy to use online, video, and instructor-led training are some of the ways we can share with you the knowledge to grow a successful independent business.You set the goals. You set the pace. We’re here to help you succeed. Whether success means earning additional income for you and your family, a
greater sense of fulfillment, creating a better life for your loved ones, or something entirely different,
your
goals
are
completely
up
to
you.
It’s your business – you’re in control. You can manage your business, check customer volume,
order products, and renew your business, all at your personalized business management center at Amway.coM
PEST ANALYSIS OF AMWAY
Amway conducts business through a number of affiliated companies in more than ninety countries and territories around the world.[7] It is ranked by Forbes as one of the largest private companies in the United States[8] and by Deloitte as one of the largest retailers in the world.[9]
PEST ANALYSIS POLITICAL
Government allowance. Production base in china for export to Asian countries Supportive for china’s entry into WTO.
ECONOMICAL
localization of production and raw materials. Own production plant in china 50% of raw materials acquired itself from china Localization of employees More than 2000 employees were Chinese or overseas Chinese.
SOCIAL
Active involvement of community Financial and human support in areas of human services education ,art ,culture etc. Invested $ 4 million for this purpose
TECHNOLOGICAL
setup R&D department Invested $ 1.5 million developed new and tailored products like whitening make up for Chinese women.
SWOT analysis
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying
the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strategic Planning, has been the subject of much research.[
Strengths: attributes of the person or company those are helpful to achieving the
objective(s).
Weaknesses: attributes of the person or company that is harmful to achieving the
objective(s).
Opportunities: external conditions those are helpful to achieving the objective(s).
Threats: external conditions which could do damage to the objective(s).
Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses, opportunities and threats. It is particularly helpful in identifying areas for development.
Why SWOT?
It helps you carve a sustainable niche in your market by taking the best advantage of your resources, talents, capabilities and opportunities. SWOT builds alignment. SWOT is a ground up approach allowing everyone in the exercises to have a voice thus, increasing buy-in and resulting in a higher level of execution. In general, Strengths and Weaknesses are internal to your organization while Opportunities and Threats often relate to ex ternal factors.
SWOT Benefits.
What makes SWOT particularly powerful is that it helps you uncover opportunities that you are well- placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that could affect you negatively. Using the SWOT framework to assess your strengths and that of your competitors’, you can analyze the competitive landscape and
develop a strategy that helps you differentiate yourself from your competitors, so that you can compete successfully in your market.
SWOT analysis of Amway: STRENGTH:
Based on direct selling operations. Hence it can be A home based business. Every can participate in business. It’s easy to get admission in Amway with easy rout like intent.
Training to staff.
Functions are performed by IBOs.
Organize meetings and events time to time.
Have good customer service system.
Backed by a 100% Customer Product Refund Policy produce faith and reselling attitude in customers.
Quality Products that Inspire Confidence. Almost no risk of money as world class quality Minimal start up costs gives strong base to the initiation of business. So everyone can participate
in business. The person who wants do something can be make profit with investment of low cost. Products are easy to sell.
A business with national and international scope gives more opportunity to the costumers.
The
possibility
of
financial
security
and
freedom
of
time
to
enjoy
life.
WEAKNESS:
More power to IBOs gives critical structure to organization.
Initially high entry cost leads to somewhat restrictions for business development.
Rumors for direct selling operations.
Focus shifted from selling products to recruiting. OPPURTUNITIES:
Setup a manufacturing plant in all countries leads to better platform for company.
Population of INDIA gives better opportunity to compan y to receive more profit.
As the company name itself gives reliance and faith for the customer and buyer produce greater opportunity for marketing which leads to decrease in total expenditure of company.
THREATS:
Too much freedom to IBOs.
Change in government policy may affect to the profit and freedom of company.
Competitors like AVON, MARY KAY; SUNRIDER creates lot of competition in market which leads to strong marketing competition in market.
FINDING:
I’ve written about Amway based entirely on factual, confirmable sources. If you’re researching Amway, especially on the Internet, chances are you’ve encountered people who claim Amway is some kind of scam business, it’s illegal, the products are poor quality, or some other information
that has made you think twice about being involved. Skim through these finding and decide for yourself whether those kinds of opinions really have a lot of credibility in the face of all of these facts. Have all these major companies and organizations that have recognized Amway for excellence been conned? For fifty years? Or perhaps the opinions you read on the internet have been formed from limited or even no experience – from encountering some new or inexperienced Amway rep that never bothered to learn how to act professionally or properly explain the concept, and probably never did much more than dabble for a few months. Or perhaps the experience was with just one of dozens and dozens of different Amway affiliated organizations, each with different ways of doing things that may not all appeal to everyone? Or perhaps their opinions driven by business interests working or being paid by competitors or potential competitors to Amway? CONCLUSION:
Amway is which is one of the largest direct selling company in the world. The main objectives of Amway are to profit there distributers by eliminating the middlemen and provide the products to the distributers in cheaper price. The products of Amway are world class product quality. They are made up of natural a thing that’s why they are good for health and environment. Amway
covers a wide range of products from beauty care. Health care, to clothing, and daily use products etc. the products are costly as compared to other branded products available in market but if we compare the quantity while using the products require less amount and thus can be used for longer time. Successful business today depends upon a company's ability to quickly adapt to changes in the marketplace. At Amway, they pride it selves on knowledge of the dynamic networking market that is quickly becoming central to modern business. This knowledge, and its willingness to act upon it, has enabled us to become one of the industry's technological leaders.
Through they continued pursuit of new product ideas, and by consistently refining our existing product line, they have become one of the top providers of cutting-edge networking products in the global market. If you're looking for high quality products and solid customer support at rockbottom prices, then choosing Amway really does make sense SUGGESTIONS:
Trial packs should be used because customer must have to introduce the product. Once customer gets idea about product he comes to know advantages of products.
The products should be cheap the home delivery system takes at least two days to deliver the products so the delivery should be instant.
There must be multiple options for purchasing the products for distributers like online, tale and instant purchasing.
In every city, the Amway office should be situated in such a location so that it is in reach of all distributers.
Bibliography:
http://www.amway.in/Articles/Article. http://en.wikipedia.org/wiki/Amway http://en.wikipedia.org/wiki/Organisation http://www.scribd.com
