Please have your answer be 250 words or more. This case study comes from International Business: Competing in the Global

[answerhappygod]

Please have your answer be 250 words or more.
This case study comes from International Business: Competing in the
Global Marketplace by Charles W.L. Hill. The case study reads as
follows:
For six years after Andrea Jung became CEO of Avon Products in
1999, revenues for the beauty products company famous for its
direct-sales model grew in excess of 10 percent a year. Profits
tripled, making Jung a Wall Street favorite. Then in 2005, the
success story started to turn ugly. Avon, which derives as much as
70 percent of its revenues from international markets, mostly in
developing nations, suddenly began losing sales across the globe. A
ban on direct sales had hurt its business in China (the Chinese
government had accused companies that used a direct-sales model of
engaging in pyramid schemes and of creating “cults”). To compound
matters, economic weakness in eastern Europe, Russia, and Mexico,
all drivers of Avon's success, stalled growth further. The dramatic
turn of events took investors by surprise. In May 2005 Jung had
told investors that Avon would exceed Wall Street's targets for the
year. By September she was rapidly backpedaling, and the stock fell
45 percent.
With her job on the line, Jung began to reevaluate Avon's global
strategy. Until this point, the company had expanded primarily by
replicating its U.S. strategy and organization in other countries.
When it entered a nation, it gave country managers considerable
autonomy. All used the Avon brand name and adopted the direct-sales
model that has been the company's hallmark. The result was an army
of 5 million Avon representatives around the world, all independent
contractors, who sold the company's skin care and makeup products.
However, many country managers also set up their own local
manufacturing operations and supply chains, were responsible for
local marketing, and developed their own new products. In Jung's
words, “they were the king or queen of every decision.” The result
was a lack of consistency in marketing strategy from nation to
nation, extensive duplication of manufacturing operations and
supply chains, and a profusion of new products, many of which were
not profitable. In Mexico, for example, the roster of products for
sale had ballooned to 13,000. The company had 15 layers of
management, making accountability and communication problematic.
There was also a distinct lack of data-driven analysis of
new-product opportunities, with country managers often making
decisions based on their intuition or gut feelings.
Jung's turnaround strategy involved several elements. To help
transform Avon, she hired seasoned managers from well-known global
consumer products companies such as Procter & Gamble and
Unilever. She flattened the organization to improve communication,
performance visibility, and accountability, reducing the number of
management layers to just eight and laying off 30 percent of
managers. Manufacturing was consolidated in a number of regional
centers, and supply chains were rationalized, eliminating
duplication and reducing costs by more than $1 billion a year.
Rigorous return on investment criteria were introduced to evaluate
product profitability. As a consequence, 25 percent of Avon's
products were discontinued. New-product decisions were centralized
at Avon's headquarters. Jung also invested in centralized product
development. The goal was to develop and introduce blockbuster new
products that could be positioned as global brands. And Jung pushed
the company to emphasize its value proposition in every national
market, which could be characterized as high quality at a low
price.
By 2007 this strategy was starting to yield dividends. The
company's performance improved and growth resumed. It didn't hurt
that Jung, a Chinese-American who speaks Mandarin, was instrumental
in persuading Chinese authorities to rescind the ban on direct
sales, allowing Avon to recruit 400,000 new representatives in
China. Then in 2008 and 2009 the global financial crisis hit.
Jung's reaction: This was an opportunity for Avon to expand its
business. In 2009, Avon ran ads around the world aimed at
recruiting sales representatives. In the ads, female sales
representatives talked about working for Avon. “I can't get laid
off, I can't get fired,” is what one said. Phones started to ring
off the hook, and Avon was quickly able to expand its global sales
force. Jung also instituted an aggressive pricing strategy, while
packaging was redesigned for a more elegant look at no additional
cost. The idea was to emphasize the “value for money” that Avon
products represented. Media stars were used in ads to help market
the company's products, and Avon pushed its representatives to use
online social networking sites as a medium for marketing
themselves.
The result of all this was initially good: In the difficult
years of 2008 and 2009, Avon gained global market share and its
financial performance improved. However, the company started to
stumble again in 2010 and 2011. The reasons were complex. In many
of Avon's important emerging markets, the company found itself
increasingly on the defensive against rivals such as Procter &
Gamble that were building a strong retail presence there.
Meanwhile, sales in developed markets spluttered in the face of
persistently slow economic growth. To complicate matters, there
were reports of numerous operational mistakes—problems with
implementing information systems, for example—that were costly for
the company. Avon also came under fire for a possible violation of
the Foreign Corrupt Practices Act when it was revealed that some
executives in China had been paying bribes to local government
officials. Under pressure from investors, in December 2011 Andrea
Jung relinquished her CEO role, although she will stay on as
chairwoman until at least 2014.
The question needing to answer is as follows:
In terms of the framework introduced in this chapter, what
strategy was Avon pursuing by the late 2000s?
Again, please 250 words or more to answer this question. Thanks
in advance!