CASE STUDY

On

SUBJECT: Business Analytics SUBMITTED TO Monika Sehgal SUBMTTED BY Rohit Kumar CSE Btech (LEET) 1111 !"

Amway (#hort

$or American %a&) i# an American com'an&

u#ing multi(le)el marketing techni*ue#+ that #ell# a )ariet& o$ 'ro,uct#+ 'rimaril& in the health+ -eaut&+ an, home care market#. Am/a& /a# $oun,e, in 1010 -& 2a& 3an An,el an, Richar, De3o#. Ba#e, in A,a+ Michigan+ the com'an& an, $amil& o$ com'anie# un,er Alticor re'orte, #ale# o$ USD411.5 -illion $or the &ear en,e, Decem-er 51+ !1 ( the #e)enth con#ecuti)e &ear o$ gro/th $or the com'an&. 6t# 'ro,uct line# inclu,e home care 'ro,uct#+ 'er#onal care 'ro,uct#+ 7e/elr&+ electronic#+ 8utrilite ,ietar& #u''lement#+ /ater 'uri$ier#+ air 'uri$ier#+ in#urance an, co#metic#. Am/a& con,uct# -u#ine## through a num-er o$ a$$iliate, com'anie# in more than a hun,re, countrie# an, territorie# aroun, the /orl,.9:; Am/a& /a# ranke, 8o.11< among the large#t glo-al retailer# -& Deloitte in !!:+ an, 8o. 1 among the large#t 'ri)ate com'anie# in the U.S. -& =or-e# in !1 . =or the mo,ern -u#ine## organi>ation+ ,e)elo'ing goo,# or #er)ice# i# not enough. ?oo,# mu#t al#o -e a)aila-le in the right *uantit& an, at the right location in or,er to reach the cu#tomer. =or the organi>ation# them#el)e#+ ,i#tri-ution #trategie# #houl, ne)er -e un,er(rate,. De)elo'ing an e$$ecti)e /a& o$ reaching cu#tomer# ma& -e the corner#tone u'on /hich their #ucce##e# are $oun,e,. Take Rea,er@# Dige#t an, the uni*ue /a& in /hich it #ell# 'ro,uct# to it# cu#tomer#. %hat a-out 3i#ion EA're## an, the re)olutionar& re$orm# it ha# 'rom'te, in the #ale o$ gla##e#B Cne rea#on $or their #ucce## i# that the& reach their cu#tomer# in a -etter an, more a''ro'riate /a& than their com'etitor#. Thi# ca#e #tu,& $ocu#e# on Am/a& an, the #ucce## it ha# achie)e, u#ing the ol,e#t $orm o$ ,i#tri-ution ( ,irect #elling.

Am/a& culture

Am/a&@# co $oun,er#+ Rich De3o# an, 2a& 3an An,el+ -elie)e that 'eo'le e)er&/here ,e#ire the o''ortunit& to achie)e an, -etter their li)e#. Am/a& ha# ,e)elo'e, a #erie# o$ #tatement# /hich outline it# culture. A# /ith man& ,i$$erent t&'e# o$ #tatement# o$ cor'orate 'ur'o#e+ the#e #tatement# $all into a hierach&.

Am/a& mi##ion
@Through the 'artnering o$ Di#tri-utor#+ Em'lo&ee#+ an, the =oun,ing =amilie#+ an, the #u''ort o$ *ualit& 'ro,uct# an, #er)ice+ /e o$$er all 'eo'le the o''ortunit& to achie)e their goal# through the Am/a& Sale# an, Marketing Dlan.@

Am/a& )i#ion
@To be the best business opportunity in the world.'

Am/a& #ale# an, marketing 'lan

The acti)itie# o$ each Am/a& ,i#tri-utor are ,etermine, -& the Am/a& Sale# an, Marketing Dlan. Am/a& 'ractice# ,irect #elling /hich i# @A metho, o$ #elling goo,# ,irectl& to the con#umer -& an in,e'en,ent Di#tri-utor. A Di#tri-utor can then intro,uce $urther Di#tri-utor# an, generate income $rom retail 'ro$it# #u''lemente, -& -onu# 'a&ment# -a#e, u'on the total #ale# o$ the grou' -uilt -& a Di#tri-utor'. 6ncome i# generate, -& a ,i#tri-utor throughE

the retailing o$ goo,# to con#umer#. Retail margin# (mark(u'#) on the -a#ic /hole#ale 'rice re're#ent income to the #elling ,i#tri-utor. a,,itional 'er$ormance an, lea,er#hi' -onu#e#+ 'ai, on the )olume o$ 'er#onal -u#ine## o$ the ,i#tri-utor an, the -u#ine## )olume o$ the ,i#tri-utor# he ha# intro,uce, to the -u#ine##. )ariou# le)el# o$ lea,er#hi' -onu#e#+ ,e'en,ent u'on the o)erall #i>e an, #ha'e o$ the -u#ine##+ 'ai, on achie)ing ,i$$erent le)el# o$ -u#ine## 'er$ormance. Thi# 'lan+ there$ore+ re#t# u'on the t/in $oun,ation# o$ retailing an, #'on#oring. Retailing ( the #elling o$ goo,# to con#umer# on /hich retail margin# are earne, an, 'er$ormance -onu#e# gaine,. S'on#oring ( the intro,uction o$ other in,i)i,ual# to e#ta-li#h an, ,e)elo' their o/n in,e'en,ent Am/a& ,i#tri-utor#hi'#. Direct #elling in)ol)e# #ale# 'eo'le #ho/ing an, ,emon#trating 'ro,uct# to o-tain or,er#. The o-7ecti)e in)ol)e# matching con#umer nee,# /ith the 'ro,uct. The -etter the match+ the more la#ting the 'otential $or the

relation#hi' -et/een the #eller an, the -u&er. The #elling 'roce## i# ai,e, -& Am/a&@# retail #trateg& to 'ro)i,e high *ualit&+ rea,il& 'urcha#a-le item# /ith a goo, en)ironmental 'o#itioning+ o$$ering con#umer# goo, )alue $or mone&.

Bu#ine## a/arene## cam'aign

Am/a& i# a mem-er o$ the Direct Selling A##ociation (DSA)+ the in,u#tr& -o,& re're#enting $ort& ,irect #elling com'anie#. All mem-er com'anie# ha)e to a-i,e -& it# Co,e o$ Dractice /hich i# en,or#e, -& the C$$ice o$ =air Tra,ing. 6n 2ul& 100 Am/a& (UK) Lt, launche, it# Bu#ine## A/arene## Cam'aign to 'er#ua,e the go)ernment to tighten u' the current '&rami, #elling legi#lation. The cam'aign ha, three aim#E 1. To u'gra,e the legi#lation an, intro,uce $urther #a$eguar,# to 'rotect -oth ,i#tri-utor an, con#umer. . To en#ure that the legi#lation clearl& ,e$ine# the ,i$$erence# -et/een illegal '&rami, #elling an, ,irect #elling an, to changethe name o$ the legi#lation+ #o that ethical com'anie# no longer ha)e the 'erniciou# la-el @legal '&rami,#@ 5. To e,ucate the general 'u-lic+ a# /ell a# o'inion $orming -o,ie# #uch a# Tra,ing Stan,ar,# De'artment# an, Citi>en#@ A,)ice BureauA+ a-out the ,i$$erence# -et/een re'uta-le ,irect #elling com'anie# an, unethical one#.

Marketing #trateg&

There are man& cleaning 'ro,uct# on the market. 3i#it &our local #u'ermarket an, &ou /ill *uickl& $in, the ai#le /hich i# $ille, /ith #imilar( looking cleaning $lui,#+ 'ro,uce, -& a relati)el& #mall num-er o$ com'anie#. Fo/e)er+ mo#t o$ the#e cleaning 'ro,uct# are #ingle 'ur'o#e one# an, are 'ro,uce, -& manu$acturer# to #tan,ar, #'eci$ication#. Man& cleaning 'ro,uct# lack )er#atilit&+ i.e. the& can onl& -e u#e, $or one 'articular ta#k an, in one 'articular /a&. Con#umer#+ there$ore+ -u& an, #tore a /hole range o$ in$leAi-le 'ro,uct#. You can check thi# out #im'l& -& eAamining the range o$ cleaning $lui,# that are #tore, in &our o/n home. Fo/e)er+ to,a&@# con#umer ,oe# not /ant to #'en, )alua-le lei#ure time #ho''ing $or ,o>en# o$ ,i$$erent cleaning 'ro,uct#.

Marketing o-7ecti)e#

A #trateg& i# a 'lan o$ action ,e#igne, to achie)e the goal# o$ the organi#ation. 6n creating a marketing #trateg& $or the Su'er Concentrate, Cleaning S&#tem+ Am/a& nee,e, to #et out the ke& o-7ecti)e# it /ante, to achie)e. The $ollo/ing o-7ecti)e# $or the -ran, /ere #etE to increa#e ,i#tri-utor 'ro$ita-ilit& an, 'ro,ucti)it& -& 'ro)i,ing a ne/ an, eAciting -u#ine## o''ortunit&

to o'timi#e con#umer con)enience an, )alue through enhance, 'ro,uct ,i$$erentiation /ith thi# eAclu#i)e an, re)olutionar& cleaning #&#tem

Product De elo!ment
Re#earch an, ,e)elo'ment 'la& a )ital commercial role creating -etter 'ro,uct# through im'ro)ing o'erational 'roce##e# an, hel'ing the /hole -u#ine## $ocu# u'on it# cu#tomer#.

Arti#tr& 'ro,uct# are the re#ult o$ &ear# o$ re#earch+ ,e)elo'ment an, te#ting+ #u''orte, -& mo,ern manu$acturing 'rinci'le#. Am/a&@# re#earch i# 'roacti)e+ taking the lea, in a market -& re#earching the ne/e#t ingre,ient# in the in,u#tr& $or continuing ,e)elo'ment o$ ne/ $ormulae u#ing #tate(o$(the(art manu$acturing techni*ue#. Thi# ca#e #tu,& $ocu#e# u'on ho/ Am/a& ha# recentl& in7ecte, li$e into the 'ro,uct li$e(c&cle $or it# Arti#tr& range to maintain thi# 'roacti)e 'o#ition an, kee' ahea, o$ it# com'etitor#.

?lo-al Marketing
Am/a& i# a glo-al organi#ation /hich market# 'ro,uct# in international market 'lace#. Dlanning $or glo-al market# i# a much more com'leA 'roce## than $or ,ome#tic market#. 6t 're#ent# man& more ri#k# than o'erating in a ,ome#tic market /here goo,# are #ol, in onl& one local area. ?lo-al marketing in)ol)e# recogni#ing that 'eo'le $rom all o)er the /orl, ha)e ,i$$erent nee,#+ i.e. )alue#G cu#tom#G language#G rule# an, currencie#.

Though it i# #ai, that con#umer nee,# aroun, the /orl, are con)erging+ there are commonl& acce'te, nee,# an, /ant# that go -e&on, national -arrier#. The marketing miA con#i#t# o$ a com'leA #et o$ )aria-le# /hich an

organi#ation com-ine# together in or,er to en#ure that -oth glo-al an, local cor'orate o-7ecti)e# are achie)e,. Man& a,)antage# ari#e $rom com'eting in a glo-al market'lace+ inclu,ingE

Economie# o$ #cale ( o)er a larger out'ut+ co#t# 'er unit are ,ecrea#e, to 'ro)i,e the #u''lier /ith a com'etiti)e a,)antage. Am/a& i# a-le to #'rea, it# re#earch+ ,e)elo'ment+ technolog& an, ,i#tri-ution co#t# #o that it can maAimi>e it# 'ro,uction e$$icienc&

Technological inno)ation
Am/a& ha# -een a market lea,er in re#earching an, ,e)elo'ing ne/ 'ro,uct# throughout it# 'ro,uct 'ort$olioan, ,e#igning ne/ manu$acturing 'roce##e#+ e##ential i$ it i# to kee' ahea, o$ it# com'etitor#. All 'ro,uct# mo)e through 'ha#e# ,uring their li$e #'an+ much like a 'er#on. 8e/ 'ro,uct# are $ir#t concei)e, an, ,e)elo'e, $or the market. Then their #ale# ho'e$ull& /ill gro/+ a# con#umer# -ecome a/are o$ them+ -e$ore le)elling o$$ a# the 'ro,uct reache# maturit&. Thi# i# /hen #ale# an, 'ro$it# are likel& to -e at a maAimum. =inall&+ the 'ro,uct #ale# ma& -egin to ,ecline a# it lo#e# 'o'ularit& or i# #u'er#e,e, -& a ne/+ more technologicall& a,)ance, item an, it ma& -e /ith,ra/n $rom the market (thi# i# calle, the 'ro,uct li$e c&cle).

Strategic anal&#i#
The 'roce## o$ #trategic anal&#i# hel'# an organi>ation to un,er#tan, more a-out it# #trategic 'o#ition an, to con#truct an#/er# to *ue#tion# #uch a#E

%hat i# ha''ening to our -u#ine## en)ironmentB %hat ,o /e nee, to kno/ a-out our market# an, cu#tomer#B %hat ne/ o'tion# #houl, /e con#i,erB Fo/ can /e ,e)elo' our com'etence# to meet all o$ the change# in the -u#ine## en)ironmentB B& a#king the#e *ue#tion# o$ it#el$+ a -u#ine## look# to match it# o/n o-7ecti)e# $or gro/th an, ,e)elo'ment /ith the realit& o$ the -u#ine## en)ironment. Bu#ine##e# nee, to -e reali#tic. The& mu#t -a#e ,eci#ion# not u'on /i#h$ul thinking or -lin, o'timi#m -ut u'on clo#e an, care$ul anal&#i# o$ 'ro,uct# an, market#.

Am/a& make# goo, u#e o$ market re#earch. Thi# ha# hel'e, Am/a& to antici'ate ,e)elo'ment# /ithin market# an, to intro,uce ne/ i,ea# that eA'loit o''ortunitie# an, re,uce an& a##ociate, 'ro-lem# to a minimum. Com'etition anal&#i# i# a ke& $actor /ithin market re#earch. 6t hel'# Am/a& to i,enti$& the nature an, eAtent o$ com'etition at a num-er o$ le)el#. =or eAam'le+ it hel'# marketer# /ithin Am/a& to $in, out ho/ /ell 'ro,uct# are meeting con#umer nee,# an, /hat a#'ect# o$ com'etitor#@ -ran,# a''eal to con#umer#.

Am/a& 6nternet #trateg&

Bu#ine## #trategie# are ,e#igne, to -e con#i#tent /ith an organi#ation@# o)erall 'ur'o#e or mi##ion. A# a /orl, lea,er in ,irect #elling+ Am/a& -uil,# o''ortunitie# an, 'artner#hi' /ith in,i)i,ual cu#tomer# #o that the& can #hare in it# #ucce##.

Making a #trategic ,eci#ion to ,e)elo' the 6nternet $or their 6BC# ena-le, Am/a& to match technolog& /ith a /hole range o$ $unction# #uch a# marketing+ o'eration# an, logi#tic# in a /a& that /oul, meet it# nee,# more clo#el&. A# 'art o$ a Dan Euro'ean ,eci#ion+ Am/a&@# #trategic 'lan /a# to increa#e it# u#e o$ the 6nternet -& @e(ena-ling@ all o$ it# Euro'ean market# in a 'ha#e, roll(out 'lan o)er < month#. 6n or,er to ,e)elo' an online 're#ence+ Am/a& grou'e, countrie# together /here)er 'o##i-le #o a# to link 'art# o$ the -u#ine## in a /a& that /oul, #er)e cu#tomer nee,#.

De)elo'ing a #trateg&
The )ie/# o$ 6BC# are thu# )er& im'ortant in creating Am/a&@# #trategie#.

Am/a&@# #trategie# $or cor'orate #ocial re#'on#i-ilit& are ca#ca,e, through the organi#ation. Am/a&@# glo-al #trateg& in)ol)e# creating re#'on#i-le 'lan# that make a ,i$$erence in e)er&one@# li)e#. Fo/e)er+ the #trateg& i# $leAi-le. 6n other /or,# in ,eci,ing on a cau#e that 6BC# coul, 'artner it /a# e##ential to re#earch their )ie/#. =rom the out#et+ Am/a& #et out #ome clear o-7ecti)e# $or it# #trateg&. The#e /ere toE

-uil, lo&alt& an, 'ri,e among 6BC# an, em'lo&ee# enhance Am/a&@# re'utation a# a caring organi#ation make a real ,i$$erence to human li)e#.

Per"ormance Mana#ement System

%e ha)e a #trong )alue -a#e, Der$ormance management 'roce## /herein /e recogni>e #igni$icant contri-ution# ma,e -& our a##ociate# in an o-7ecti)e an, tran#'arent manner -a#i# ,emon#trate, com'etenc& le)el#. %e $o#ter a culture o$ HDa&($or('er$ormanceI to align em'lo&ee#J goal /ith the -u#ine## o-7ecti)e#. 6t hel'# to kee' our em'lo&ee# engage, an, moti)ate, -& un,er#tan,ing ho/ their ,ail& acti)itie# hel' ,ri)e o)erall Bu#ine## health.

At Am/a&+ /e recogni>e em'lo&ee# /ant to contri-ute in a /a& that i# meaning$ul to them an, to the -u#ine##+ #o career an, ,e)elo'ment con)er#ation# are encourage, throughout the com'an&. Thi# ena-le# em'lo&ee# to ha)e more in'ut into their $uture an, $in, more meaning in their career.

H%hether an em'lo&ee /oul, like to eA'an, their #kill#+ $ocu# on a #ingle area or e)en tran#$er to another ,e'artment+ tho#e thing# can -e ,i#cu##e,+I #ai, Lin,#e& Leonar,i#+ lea, talent ,e)elo'ment #'eciali#t. HCareer an, ,e)elo'ment con)er#ation# are inten,e, to allo/ $or $leAi-ilit& an, mo-ilit& accor,ing to the em'lo&eeJ# #trength# an, 'a##ion#.I The#e con)er#ation# K an, the o''ortunitie# that $ollo/ L encourage em'lo&ee# to -e more committe, to the com'an& an, it# )alue# in the 're#ent. Em'lo&ee# are al#o encourage, to acti)el& look $or area# /here the& can a,, )alue to the organi>ation in the $uture. 6tJ# an a''roach that 'ro)i,e# multi'le -ene$it# $or all in)ol)e,.

BI in Amway
Am/a& -egan it# glo-al B6 7ourne& in !!: an, #ince then the com'an& ha# migrate, $rom ha)ing multi'le technolog& 'ro)i,er# an, integration 'oint# to an integrate, #trategic )en,or a''roach. To,a&+ the com'an& ha# #tan,ar,i>e, on Cracle technolog& $or B6. Am/a& ha# achie)e, co#t #a)ing# through the retirement o$ re,un,ant technolog& 'lat$orm#. 6n a,,ition+ MikeJ# organi>ation ha# le, the charge to align ,i#'arate B6 organi>ation# into a B6 Com'etenc& Center. The $ollo/ing ,iagram highlight# the #im'licit& o$ the #tan,ar,i>e, architecture o$ Am/a& to,a&.

Du--e, Di#tri-utor Con#ulting+ Am/a& ha# ,e)elo'e, a B6 #olution u#ing the Cracle technolog& #tack to hel' Di#tri-utor lea,er# gro/ their -u#ine##e#. The Di#tri-utor Con#ulting #olution 'ro)i,e# o)er <! metric# $or Sale# #ta$$ to 'ro)i,e ,ata(,ri)en in#ight# on the Di#tri-utor# an, organi>ation# the& #u''ort. U#ing Cracle B6 EE+ EAa,ata+ an, Cracle Data 6ntegrator+ Am/a& 'ro)i,e# cu#tomi>e, an, 'er#onali>e, -u#ine## intelligence+ an, the Cracle B6 EE ,a#h-oar,# /ere ,e)elo'e, -& the Am/a& Sale# organi>ation+ /hich ,emon#trate# -u#ine## em'o/erment o$ the technolog&. Am/a& i# al#o le)eraging the 'o/er o$ B6 to ,ri)e -u#ine## gro/th in all o$ it# market#. A ne/ #et o$ Di#tri-utor Segmentation metric# are ena-ling a -etter un,er#tan,ing o$ ,i#tri-utor -eha)ior#. A ?lo-al Scorecar, that Am/a& ,e)elo'e, 'ro)i,e# ke& metric# at a market an, glo-al le)el $or

eAecuti)e(le)el ,i#cu##ion#. Dro,uct Anal&#i# team# can no/ highlight re'eat 'urcha#e rate#+ 'ro,uct 'enetration an, the #ucce## o$ CRM cam'aign#.

$PIs in Today%s Direct Sellin#

An& com'an&+ a$ter ,etermining it# goal#+ /ill nee, to mea#ure the 'rogre## to/ar,# the#e goal#. HKe& 'er$ormance in,icator#I or a# o$ten the& are calle, HKD6#I+ are the mean# $or tho#e mea#urement#. The& hel' an organi>ation un,er#tan, ho/ it# 'er$ormance i# a# com'are, to the goal#. Some al#o name them Hke& #ucce## in,icator#I or HKS6#I. There are t/o im'ortant characteri#tic# o$ all KD6#E 1) The& o-)iou#l& ha)e to -e *uanti$ia-le.

) The& ha)e -e in the area# that are critical $or the com'an&. The #econ, $eature a-o)e i# *uite crucial a# thi# 'roce## i# a-out mea#uring /hat matter# to the com'an& the mo#t+ -ut not e)er&thing. Thi# i# a tra' #ome com'anie# $all into. %hen thi# ha''en#+ the /hole 'roce## turn# into a chao#+ taking much more management time than nece##ar&+ en,ing u' /ith e)er&-o,& *ue#tioning it# nece##it&. There are numerou# mea#ura-le in,icator#+ -ut not all are Hke&I to the -u#ine##. =or the mea#urement# to -e meaning$ul+ the KD6# #houl, not change on the roa, unle## that change i# reall& nece##ar&. Con#i#tenc& here allo/# meaning$ul 'erio,(to('erio, com'ari#on#. 6n the ,irect #elling in,u#tr&+ the in,icator# that lea, to #ucce## can -e $ir#t categori>e, -& ,i)i,ing the $iel, organi>ation into t/o #egment# a# Hne/ ,i#tri-utor#I an, Hnot(#o(ne/I ,i#tri-utor#. Thi# i# im'ortant -ecau#e mo#t

o$ten+ the#e t/o grou'# -eha)e *uite ,i$$erentl&. The ,e$inition# o$ the#e grou'# (that i#+ until /hen &ou /ill call a ,irect #eller+ Hne/I) /ill ,e'en, on the #trategic goal# an, ho/ the com'an& /ill 're$er to #ee an, treat them. SAS& dri es IOS im!ro ement

The in)entor& o'timi>ation #&#tem (6CS) e$$ecti)el& e#timate# an, mo,el# o'timum in)entor& le)el# -a#e, on #er)ice le)el#+ ,eli)er& time# an, co#t# #et u' -& the u#er. U#ing SAS+ Am/a& China ha# u#e, SAS to ,ri)e im'ro)ement in 're,icting ,eman,+ tran#'ort+ in)entor& re'leni#hment an, ke& 'er$ormance in,icator (KD6) alert#.