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Amway Case Study Analysis

The paper will provide a brief discussion of Amway, specifically focusing 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 and beauty products that enhance the well-being and health of the 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 brings revenue around the globe. For example, Amway and its sister companies under Alticor started auctions of $8.4 billion in 2019 by selling various high-end products. It conducts business through a number of allied corporations majority of countries as well as territories. India is one of the major consumers of the company and a major contributor to $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.

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Payment is another fact that reduces the tendency for pyramid scheme practices. Therefore, it has paid tens of millions of dollars to settle these suits. The headquarters of the company is in Ada Township, Michigan, the United States which enables the company to develop products and sell around the globe for bringing revenue from various consumers.  However, the brand usually has various competitors such as Naked Poppy, Dollar Shave Club, Purplle.com, Avon Products, and  Oriflame which also bring revenue in various parts of the world with better marketing strategies.  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 one of the companies delivering expensive products which affected its sale. The prices of its products were kept higher which discouraged the lower-income groups from procuring 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 its goods and often gathers information or revenue through the mouth of word promotion which might be positive and negative from both aspects.

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The following paper will provide a SWOT and pestle analysis of Amway in the 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 its 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, wellness, home-based care, cosmetics, and gift catalog.
• They also engage with a wide range of customers which can be considered the major strength of the product. 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 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 exhibits low retention in low-income consumers.  Hence, the target market for the company is solely limited to the premium segment of the company.
• It has limited social media campaigns which reduce its revenue. The current investigations highlighted that the company does not believe in advertisements on TV or through a brand ambassador. Therefore, even though they have highly expensive with charge a premium and gain revenue based on it,   the company is totally dependent on word-of-mouth publicity in order to gain revenue.
• Multi-level marketing is another weakness of 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 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 the scope for using dissimilar styles of communication in order to enhance consumer engagement.  Amway should also look to capitalize on communication as well as must explore options such as digital marketing to advertising internationally.
• As the company develops 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 for tying up with salons, beauty experts as well as health experts.

Threats to the company:

The major threat to the company 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, the 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 enables 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 into the factors.  The pestle analysis of the company is following:

Political

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

Economic

• It has significant Fiscal and monetary policies which have invested in the economic factors.
• Spending for the company was   made by the government
• The income of the household is also enhanced by the economic
• Inflation and deflation rate
• With the growing  year, the growth of the economy  enhances
• Pricing in the 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 takes part in various social
• Understanding the contract between government and society
• The population of the genders
• Health standards upheld by the people
• They also offer business helper programs. Similarly, the company often supports societies as well as fosters the health of individuals.

Technological

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

Environmental

• Type of weather prevailing
• Changes in the climatic conditions
• Government's efforts to control pollution
• Endangering any specie

Legal

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

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Conclusion:

On a concluding note, it can be said that Amway is one of the highest revenue companies. Sister concerns of this multi-level company which brings revenue around the globe. For example, Amway and its sister companies under Alticor started auctions of $8.4 billion in 2019 by selling various high-end products. It conducts business through a number of allied corporations majority of countries as well as territories. India is one of the major consumers of the company and a 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 various company competitor which has a  significant role in reducing revenue.

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