EXECUTIVE SUMMARY

This executive summary will give you key facts concerning the Amway. These facts will help
to find out how well the Amway opportunity can match your business goals. Lets start from
main component that is business. A business' purpose is to attract and keep customers. Its one
basic function is to reliably solve customer problems. Management in all business areas and
organizational activities are the acts of getting people together to accomplish desired goals
and objectives efficiently and effectively. Also Management is the act or function of putting
into practice the policies and plans decided upon by the administration. Hence Administration
makes the important decisions of an enterprise in its entirety, whereas management makes the
decisions within the confines of the framework, which is set up by the administration. The
important factor important to study is Organization. It is the foundation upon which the
whole structure of management is built. Organization is not an end it itself but a means to
achieve an end. Whether an organization is good or bad depends on the fact as to how much
efficiently and promptly it is in a position to achieve the objectives. Another important topic
is A Business ownership should be structured according to the needs of the owners and
potentially liability that the business could incur. Corporate vision describes aspirations for
the future, without specifying the means that will be used to achieve those desired ends. The
Mission of organization should represent the broadest perspective of the enterprise's mission.
The major outcome of strategic road-mapping and strategic planning, after gathering all
necessary information, is the setting of goals for the organization based on its vision and
mission statement. The most important topic is an organizational structure is a mainly
hierarchical concept of subordination of entities that collaborate and contribute to serve one
common aim. Analysis by A SWOT Exercise is a powerful technique for uncovering and
understanding your Strengths and Weaknesses, and for looking at the Opportunities and
Threats you face. The Amway/Amway Global, a subsidiary of Alticor, is marketing
nutritional supplements, skin and personal care products, air and water purifiers and a line of
home cleaning products. The products are sold through Independent Business Owners (IBO).
The most effective strategy for this is direct marketing, today also known as attraction
marketing. Using attraction marketing for Amway products is the fastest way to make steady
retail profits. Amway already helped over 3 million people start on their path to success.

PRIMARY OBJECTIVES
Identification of Reasons
Amway is a global organization which markets products in international market places.
Planning for global markets is a much more complex process than for domestic markets. It
presents many more risks than operating in a domestic market where goods are sold in only
one local area. Global marketing involves recognising that people from all over the world
have different needs, i.e. values; customs; languages; rules and currencies. Though it is said
that consumer needs around the world are converging, there are commonly accepted needs
and wants that go beyond national barriers. The marketing mix consists of a complex set of
variables which an organisation combines together in order to ensure that both global and
local corporate objectives are achieved. Standardising elements of the marketing mix is key
to operating successfully in the global marketplace. As a result, common needs and wants are
identified across countries. At the same time, parts of the marketing mix requiring adaptation
are identified so that it can be developed to cater for local differences. This requires a
thorough understanding of every market in which Amway operates. Many advantages arise
from competing in a global marketplace, including:

Economies of scale - over a larger output, costs per unit are decreased to provide the
supplier with a competitive advantage. Amway is able to spread its research,
development, technology and distribution costs so that it can maximise its production

efficiency.
The development of new business opportunities - in numerous countries, markets are
growing faster than in Europe and America. Overseas markets offer the opportunity to

compete in different marketplaces and extend the life-cycle of products.

To meet the tastes of consumers from different nations - over recent years there has been
a convergence of tastes resulting in a more global marketplace. Founded in Ada,
Michigan in 1959, Amway has become one of the largest 'Direct Selling' companies in the
world with nearly three million Independent Distributors.

Direct selling involves dealing with customers 'Face-to-face' so that personal attention can be
given to each of their requirements. Direct selling differs from traditional retailing as it often
involves selling to consumers on a one-to-one basis, usually in the comfort of their own
homes. The industry has grown rapidly over recent years and is currently estimated to be
worth 40 billion a year worldwide. This case study examines this growth which has helped

Amway to become one of the industry's market-leaders influenced by changing lifestyles,

demographics and economic recession. Direct selling for Amway is undertaken by its own
independent distributors. Their own income is based on the goods they sell, bonuses paid by
Amway and the volume of sales generated through their own distributor network. These
distributors sell to people they know or meet. Amway distributors operate as their own
independent businesses. Amway is a long-standing member of the Direct Selling Association
(DSA) in the UK and Republic of Ireland. The DSA regulates the industry by providing a
Code of Conduct endorsed by the Office of Fair Trading (OFT). Amway has developed into a
global corporation manufacturing over 450 products and employing more than 12,000 people
in over 80 countries and territories around the world.

OBJECTIVES OF STUDY

To get a clear idea about the success story of Amway Corporation.

To understand the meaning & importance of products of Amway Corporation.

To study the marketing tools used by Amway Corporation.

To understand the growth of Amway Corporation

RESEARCH METHODOLOGY
The research methodology used is secondary data which includes data collected from various
books, magazines, newspapers, online available case studies and websites

INTRODUCTION
Formal information
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, jewellery, electronics, Nutrilitedietary supplements, water
purifiers, air purifiers, insurance and cosmetics. In 2004, Health & Beauty products
accounted for nearly 60% of worldwide sales. 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.
History
What does the word Amway mean? Amway is an abbreviation for "American Way" and was
coined in 1959 by company founders, Jay Van Andel and Richard DeVos. Short, unique and
easy to remember, Amway has been registered as a corporate name and trademark ever since.
In the following decades, Amway Corporation successfully established itself as a leading
multilevel marketing business, built on strong values and founding principles that continue to
sustain our company today. The business is built on the simple integrity of helping people
lead better lives. Today, Amway is a multibillion-dollar international business representing
freedom and opportunity to millions of people in more than 88 countries and territories
around the world. Amway offer over 3 million Business Owners the inspiration to grow those
businesses, and to work hard to provide new and better ways for them to achieve their life
goals.

A Solid Foundation
Rich DeVos and Jay Van Andel's friendship actually began with a business proposition, when
Rich struck a deal with Jay for a ride to school for 25 cents a week After high school they
entered the military, but they planned to start a business together after separate tours of duty.
A friendship formed and became a business relationship that has lasted to this day.

The Early Years

Amway quickly outgrew its original facilities in the basements of Rich DeVos's and Jay Van
Andel's homes. In its first full year of business, Amway's sales were more than half a million
dollars.

The Decade of Growth

As vowed by Jay Van Andel the night of the 1969 disaster, Amway rebuilt the aerosol plant
and went on. The '70s began with sales of more than $100 million at estimated retail, and
kept going strong. After a lengthy investigation, the FTC verified that Amway is a genuine
business opportunity and not a "pyramid."

The Billion-Dollar Decade

The '80s will be remembered for the first Billion Dollar Year at estimated retail in 1980.
Building expansion at Amway World Headquarters continued at breakneck speed as Amway
scrambled to keep pace with demand, opening its new cosmetics plant in Ada, Michigan.

The Next Generation

As carefully planned by Rich and Jay, the second generation Van Andel and DeVos families
took the helm during the ' 90s. The Policy Board was formed and Steve Van Andel and Dick
DeVos succeeded their fathers as Chairman and President. Distributors witnessed a similar
trend, with the second generation of many distributor families taking on important leadership
roles.

New Horizons
In 2000, Amway prepared for a new century and a new exciting era. Almost 50 years after
Amway began, the DeVos and Van Andel families created a new structure to meet the
challenges of this new century. A parent company, Alticor, was established with subsidiaries
Amway, Quixtar and Access Business Groupthe latter to consolidate manufacturing and
distribution for the enterprise. At the helm of Alticor are Steve Van Andel (Chairman) and
Doug DeVos (President), jointly holding the Office of the Chief Executive. Today each area
of the business, including Amway, has the freedom to build on its strengths. Amway
continues to be a leading company in the direct selling industry. Its fundamental principles:

Freedom, family, hope and reward

Hold as true today as they did in the very beginning.

Amway continued to expand, reaching past the borders of the US to offer the same
opportunities in other countries:

Australia 1971
Europe and parts of Asia - 1974
Japan - 1979
Latin America - 1985
China - 1995
Africa - 1997
India - 1998
Russia - 2005
Vietnam -- 2008

Awards

As a corporate leader in promoting environmental awareness and education, Amway

received the prestigious United Nations Environment Programme Achievement Award in

1989.
Corporate Citizenship Award - On November 08, 2005, the United States Chamber of
Commerce awarded Alticor with the Corporate Citizenship Award in the category of
International Community Service for the One by One Campaign for Children

Business Requirements
Procurement

Vision of Amway
Helping people live better lives.
Showing where the business wishes to be in the future.
Mission of Amway

Through the partnering of Distributors, Employees, and the Founding Families and the
support of quality products and service, we offer all people the opportunity to achieve
their goals through the Amway Sales and Marketing Plan. Broad over riding statement of

purpose.
To facilitate best business opportunities.
To deliver high-quality products to semi-urban and urban homes in diverse areas of
insurance, home tech, home care, personal care, cosmetics and wellness.
Goal of Amway

The development of new business opportunities.

To increase the company's role in relations to social responsibility.
To provide excellent customer service.

Community Services
Amway, its Independent Business Owners and employees are involved in improving the
communities in which they do business. Amway are committed to serve their customers to
fulfil their needs by focusing efforts on discovering and thereby meeting stated and unstated
requirements. Amway promote a culture of openness and mutual trust by interacting
objectively and without underlying personal interests. Amway are committed to honour,
encourage and support individuals and teams who contribute, through their behaviour and
actions, to the success of the organization.
Social responsibilities performed by AMWAY

One by One Campaign for Children

Amway Opportunity Foundation (AOF)
National Project for the Blind

Strategic Sourcing

Strategic Sourcing is a discipline embedded within Amway and founded on the concept of
lowest total cost sourcing.
This discipline is:

Systematic Amway has specific tools, processes, programs and a defined infrastructure

to ensure we obtain the greatest value for our expenditures.

Aggressive Amway holds our sourcing teams and suppliers jointly accountable for

success.
Cross-functional Amway gathers individuals from functional areas within the supply
chain to review, recommend and implement comprehensive sourcing strategies.

It is important to note that Amway views our suppliers not merely as an extension but an
integral link within our supply chain. Having our suppliers clearly aligned and integrated with
Amway's business strategies and objectives will create on-going, mutual success.
Sourcing Strategy Teams
Sourcing Strategy Teams direct the sourcing activities for specific categories taking a global,
category focused approach to procurement and driving toward lowest total cost in partnership
with the supply base. Each cross-functional team considers, recommends and implements
new sourcing strategies and supply management components that will optimize the supply
base and drive global sourcing activities for the Alticor enterprise.
Sourcing Management
Amway aggressively manages sourcing activities to maximize the value received for our
annual expenditures. Focus is not only on price but also: quality, available capacity, and
service, access to technology, logistics, regulatory issues, and replenishment lead times, when
making sourcing decisions. By analyzing our categories of expenditures, deploying cross
functional teams to develop strategies, effectively sourcing and executing against the strategy,
we are focusing our resources to achieve lowest total supply chain cost.

All Suppliers should be familiar with the following topics to assist us in our goals of
lowest total cost and continuous supply chain improvement.

Purchase Orders

The Purchase Order is the primary authorized legal document for the procurement of goods
and services from an outside source. The terms and conditions are printed on the back of the
Purchase Order.
Amway's preferred Purchase Order Transaction Process is EDI; however, other options are
available to the supply base, including e-mail, fax, and ordinary mail. Although these are not
integrated with our systems and must be manually handled, they are provided so that
suppliers with technical limitations have a process for transactional completion. Each of these
options uses a hard copy purchase order which is sent to the supply base via the various
transmittal options. The expectation is that suppliers will receive, review, and acknowledge
the acceptance of the purchase order. Any changes to the order are also sent via these options
or are called into the supplier by the Amway planner or buying assistant.
Order acknowledgement and change order confirmation should be received at Amway via
phone, fax or email within 24 hours of order placement.

Proposals/Quotes
All quotes for specified raw materials, packaging components, and services must have a
complete breakdown of all cost elements, including labor, overhead, margin, raw materials,
and components. Amway will require this for all initial evaluations as well as the ongoing
establishment of goals and validation of price adjustments. Suppliers who do not provide this
information may be disqualified from consideration.
Vendor Managed Inventory (VMI) / Consignment
Suppliers are encouraged to work closely with Amway to minimize inventory and increase
inventory turns in a way that is mutually advantageous. Opportunities such for Consignment
and VMI are available. Please contact your Amway Buyer for more information.

eSourcing
Amway has adopted an internet-based approach to managing our sourcing
functions. Frictionless Commerce is an eSourcing technology allows suppliers to
electronically submit and update information and provides for direct integration of supplierbased data with our eSourcing processes (RFI, RFP, Auctions, etc.) at no cost to the supplier.

The synergy created by using Frictionless Commerce for supplier registration, along with
other eSourcing functions, will improve efficiency within our supply chain and for our
suppliers in the following ways:

Privacy Information is securely stored for Amway use only.

Easy Access Information can be accessed and updated easily via the internet.
Efficiency Frictionless technology is used to respond to RFIs, RFPs and participate in

eAuctions.
Data Storage Capability Important data and documents can be scanned and uploaded,

including insurance information, certifications, and safety information.

Visibility Amway commodity categories can be selected by suppliers and used as search
criteria by ABG buyers in the sourcing process.

Publicity
Use of Amway/ABG/Alticor name is prohibited without prior written approval. Please
contact the Amway Buyer with questions.

Supplier Visits
Appointments are required. Please contact the Amway Buyer to schedule a visit.

Gifts and Gratuities

The Strategic Procurement Buying staff should not accept any gifts, gratuities, or favors from
any supplier, broker, agent or others in the buyer/supplier relationship.

PRODUCTS AND SERVICES

Over 450 unique, high-quality products carry the Amway name in the areas of nutrition,
wellness, beauty and home, as well as commercial products and a variety of services (from

which 105 products are offered in India). In addition, Amway independent business owners in
selected markets sell additional brand-name goods through local merchandise catalogues,
plus a variety of services and educational products. All products are backed by a customer
satisfaction guarantee.
Nutrition and Wellness
Nutrilite is the worlds leading brand of vitamin, mineral, and dietary supplements, grown
harvested and processed on its own certified organic farms.
Cosmetics
Our skin is the outward appearance of who or what we are, or what we would like to be. But
it is more than a simple cover. It is the largest organ of our body - a complex and dynamic
system that is vital to our health and reflects it as well.
Artistry
Artistry is one of the worlds top five largest-selling prestige brands of facial skin care and
colour cosmetics.
Attitude
All products of Attitude contain Skin Vitalizing Complex that synergistically combine to
cleanse, Replenish & Moisturize the skin making it soft & supple.
Home Care
Amways Home Care Brands provide complete cleaning systems that fit with everyones
needs. Their versatile, effective product systems offer the features and benefits consumers
want. No matter what your lifestyle, Amways Home Care products make light work of your
cleaning chores.
SA8
SA8 Gelzyme is India's only 3-in-1 laundry detergent which pretreats, cleans and softens.

LOC
LOC High Suds is a multipurpose household liquid cleaner.

Dish Drops
Dish Drops is a concentrated hand dishwashing liquid with a powerful "Triadic Detergency
System".
Personal Care
Amway Personal Care products have built global reputation based on their world-class
research and development. These products are designed to deliver the ultimate grooming
experience and the confidence that lasts long.
Glister
Glister Toothpaste is a revolutionary Multi-Action Toothpaste with Sylodent that offers seven
benefits.
Persona
Persona Premium 3 in 1 Soap is a complete soap for the entire family promises refreshing
confidence.
Satinique
Satinique Advanced Range with unique Ceramide Infusion System uses nature's own
renewing technology to rejuvenate, strengthen and protect your hair.
Dynamite
Dynamite's range of male grooming products, formulated internationally is designed to
deliver the ultimate grooming experience.
G&H
G&H Range enriched with the goodness of Glycerine and Honey, deeply nourishes and
hydrates the skin for a healthy glow.
Apart from this Amway also deals in Air purifiers and Water purifiers, Jewellery, Electronics,
& Insurance products.

Area product
Amway Products Available by Country

If you are a manufacturer, doesn't it make sense to put your product in Amway's distribution
system and have over 2.5 million distributors around the world market your
products/services?
Sounds reasonable and logical doesn't it? But if you have heard the above statement, or
something similar to it, at a presentation of the Amway Sales & Marketing Plan, you should
know that it is simply not true.
Listed below is a table of the products that Amway markets in the foreign countries that they
operate in. Typically when Amway opens in a new foreign market, they will start with a
limited number of Amway produced cleaning products then slowly introduce more cleaning
products. I would imagine that their initial success in the country plays an important part of
when and how many products are introduced.
Last April, when Amway opened in the Philippines, they started with only 10 products. I have
also heard from a person from South Africa who has told me that Amway is planning on
opening with 10 products there also.
As far as non-Amway manufactured catalogue items are concerned, there are only a few
countries where a limited number of catalogue items are available. I have no way of knowing
if the products available to distributors in the U.S. are available in these foreign markets or
whether the catalogue items available in these foreign markets are available in the U.S. I'm
sure some of them may be.
As you can see from the table below only some European countries, Australia, Canada and
Mexico have catalogue items. In Japan, they only market men's and ladies apparel and
accessories. In Thailand, they only market a limited number of items and in Malaysia, only
locally produced products are available.

Amway Product counts by Country

Country

Product Count

Product categories

Over 100
Argentina

Amway

Personal Care, Home Care, Home Tech

Products
Over 200
AMWAY
Australia

Beauty, Health and Fitness, Home Care, Home Tech,

products

Catalog

1,300 catalog
items
Austria
Belgium

800 Beauty, Nutrition and Wellness, Home Care, Eurocatalogue

?? Beauty, Health and Fitness, Home Care, Home Tech
Homecare, Housewares, Nutrition & Wellness, Artistry,

Brazil

200

Brunei

??? Beauty, Health & Fitness, Home Care, Home Tech

Canada

Personal Care,

350 Amway
3,500 Catalog

Chile

54 Home Care, Personal Care

China

12 Personal Care, Home Care

Colombia
Costa Rica
Czech
Republic
El Salvador

Over 20 Personal Care, Home Care

25 Personal Care, Home Care
?? Personal Care, Home Care, Artistry

Over 300

Home Care, Personal Care, Nutrition and Wellnes, Home

Tech, Beauty, Coffe and Milk

Beauty, Health and Fitness, Home Care, Home Tech,

Germany

???

Greece

??? Personal Care, Home Care

Guatemala

Eurocatalog

Over 300 Home Care, Personal Care, Nutrition and Wellnes, Home

Tech, Beauty, Coffe and Milk

Honduras

Over 300

Hong Kong

Tech, Beauty, Coffe and Milk

??? Beauty, Health & Fitness, Home Care, Home Tech

Hungary

Over 300

Indonesia

Over 100

Italy

???

Japan

130 Amway

Korea

70
120 Amway

Malaysia

Home Care, Personal Care, Nutrition and Wellnes, Home

Home Care, Personal Care, Nutrition & Wellness, Home

Tech
Home Care, Personal Care, Nutrition & Wellness,
Housewares
Personal Care, Nutrition & Wellness, Home Care, Home
Tech, Eurocatalog
Home care, Personal Care, Nutrition, Housewares, A.W.P.
Men's/Ladies' apparel and accessories
Home Care, Personal Care, Skin Care, Nutrition &
Wellness, Home Tech
Nutrition & Wellness, Personal Care, Home Care, Home

products

Tech, Personal Shoppers catalog -- More than 60 locally

Over 60
Catalog items

sourced products.

?? Amway
Mexico

Products

Beauty, Health & Fitness, Home Care, Home Tech, Catalog

60 Catalog
Products

Netherlands

???

New Zealand

???

Panama

400

Philippines

Beauty, Health & Fitness, Home Care, Home Tech,

Eurocatalog
Beauty, Health & Fitness, Home Care, Home Tech,
Eurocatalog
Home care, Personal care, Nutrition and Wellness, Home
care, Home tech

10 Home care, Personal care

Poland

???

Portugal

???

Beauty, Home care, Home Tech, Nutrition & Wellness

(added May 97)
Beauty, Health & Fitness, Home Care, Home Tech,
EuroCatalog

Slovak

?? Personal Care, Home Care

Slovenia

?? Personal Care, Home Care

434 Amway

Spain

Products

Home care, Personal care, Nutrition & Wellness,

245 Catalog

Housewares, Eurocatalog

Items
Switzerland
Taiwan

?? Beauty, Home Care, Home Tech

Over 300 Beauty, Nutrition & Wellness, Home Care, Home Tech
Cosmetics, Personal Care, Nutrition & Wellness, Home

Thailand

400 Care, Home Tech, Personal Shoppers Catalog: Coffee,

Jewelry, Leather Goods, Business Wear, and more.

Turkey

?? Personal Care, Home Care

United

400 Amway

Home Care, Laundry Care, Car Care, Gormet Cookware,

Kingdom

Catalog

Nutrition & Wellness, Personal Care, Eurocatalog

Over 100
Uruguay

Amway
Products

Personal Care, Home Care, Home Tech

Manufacturing Strategy
Almost all Amway India products are manufactured in the country through third party
contract manufacturers. With the exception of Cosmetics range (Artistry*) and some products
in Nutrition and Wellness category, all Amway India products and bottles are manufactured in
India.
The products match Amways global quality standards. They carry a tamper-proof seal and a
100% Money Back Guarantee'. If not completely satisfied with the product, the consumer
can return it for a refund. Amway products are environment friendly, and are not tested on
animals. Amway encourages the return of its used product bottles for re-cycling and to
prevent their misuse.
To bring the identified contract manufacturers production facilities and skills to international
standard, Amway has invested in excess of US$ 4 million (approx. Rs. 17 crore). The transfer
of this state-of-the-art, world-class technology, has been free of cost.

SALES AND MARKETING PLAN

The Amway is private cooperative 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.
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 by them
Same Distribution centres 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 companys management

SWOT ANALYSIS OF AMWAY

Strength

Based on direct selling operations. Hence it can be a home based business. Every can

participate in business. Its 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.
Rumours for direct selling operations.
Focus shifted from selling products to recruiting.

Opportunities

Setup a manufacturing plant in all countries leads to better platform for company.
Population of INDIA gives better opportunity to company 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.

Use of MLM in AMWAY

Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated
not only for sales they personally generate, but also for the sales of others they recruit,
creating a down line of distributors and a hierarchy of multiple levels of compensation. Other
terms for MLM include network marketing, direct selling, and referral marketing. Although
the products and company are supposed to be marketed directly to consumers and potential
business partners by means of relationship referrals and word of mouth marketing, critics
have charged that most MLMs are pyramid schemes.
MLM companies have been a frequent subject of criticism as well as the target of lawsuits.
Criticism has focused on their similarity to illegal pyramid schemes, price-fixing of products,
high initial start-up costs, emphasis on recruitment of lower-tiered salespeople over actual
sales, encouraging if not requiring salespeople to purchase and use the company's products,
potential exploitation of personal relationships which are used as new sales and recruiting
targets, complex and sometimes exaggerated compensation schemes, and cult-like techniques
which some groups use to enhance their members' enthusiasm and devotion. Not all MLM
companies operate the same way, and MLM groups have persistently denied that their
techniques are anything but legitimate business practices. Amway use direct Selling model to
sell its products & services.
For this Amway offer membership to their potential customers. These members also act as
agents for Amway & sell their products entirely on their wish. Amway provide points on each
product sell to their IBO which further get converted into monetary terms. Also, these points
have worldwide acceptance.

To start the Amway Business one needs to buy the Amway Business Kit and be sponsored in
the business by an already existing Amway Business Owner. Despite what you may have
heard, starting an Amway business doesn't involve handing over large amounts of cash. With
your efforts and our knowledge, the Amway opportunity can become everything from a
means of earning a little extra cash to building an international business. Where do you want
to go?

Amway Business Opportunity

The Amway Sales and Marketing Plan puts 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.

Amway is a business with a proven track record and the ability to help you get the best out of
your hard work. With Amway, you are on your own but are never alone.50 years of global
experience and 10 years of experience in India, we are there to help and guide you. We know
the pitfalls of running a business and are there to help you avoid them, and to reward you
when you do well.
At the heart of your business are Amways market-leading products, each tailored to the
needs of individual market and culture. Amways products are recognized all over the world
for their high quality, value and performance, all supported by the Amway Satisfaction
Guarantee. Our role supporting your business extends into product and business training,
helping to ensure that you are able to reach your personal potential.
At Amway we believe that to sell a quality product you need to understand it and use it with
confidence. We spend lakhs of rupees helping our Business Owners become product and
brand ambassadors, enabling them to sell AMWAY products with conviction and run their
businesses effectively. Amway really does enable you to be in control of your own life. With
the Amway business opportunity, you work for yourself, not for Amway or your sponsor. Its
entirely up to you how much time and effort you put into your business. Like anything else in
life, the amount you achieve reflects the amount you put in.
People all over the world value the freedom of choice and flexibility that Amway offers. In
2007-08 there were more than 4.5 lakh Business Owners in India. Each one of these is an
independent business, connected to a worldwide network of support and advice that is
available as and when its needed.

How to Join Amway?

Starting your own business
There is no cost of Starting the Amway business. You need to be sponsored in the business by
an already existing Amway Business Owner. Amway business opportunity is flexible, it can
take as a part time or full time business. It is accessible virtually by anyone interested in
operating an independent business. The Amway Opportunity works in two-fold. Giving you a
chance to build your own business at your pace and achieve the rewards and recognition
linked to the plan and at the same time helping other people do the same. If you are not an
Amway Business Owner but interested in Amway business Opportunity please leave your
details here.

PESTLE ANALYSIS
Political
Political factors are how and to what degree a government intervenes in the economy.
Specifically, political factors include areas such as tax policy, labour law, environmental law,
trade restrictions, tariffs, and political stability. Furthermore, governments have great
influence on the health, education, and infrastructure of a nation.

With the flow of Liberalization in India many foreign companies have invested in India.
Production base in India help Amway for Government allowances.
Supportive for Indias entry into WTO.

Economical
Economic factors include economic growth, interest rates, exchange rates and the inflation
rate. These factors have major impacts on how businesses operate and make decisions.

Localization of production and raw materials.

Own production plant in India.
50% of raw materials acquired itself from India.
Localization of employees
More than 2000 employees were Indians.

Social
Social factors include the cultural aspects and include health consciousness, population
growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors
affect the demand for a company's products and how that company operates.

Active involvement of community

Financial and human support in areas of human services education, art, culture, etc.
Invested $ 4 million for this purpose

Technological

Technological factors include technological aspects such as R&D activity, automation,

technology incentives and the rate of technological change. They can determine barriers to
entry, minimum efficient production level and influence outsourcing decisions.

Setup R&D department

Invested $ 1.5 million
Developed new and tailored products like whitening make up for Indian women.

Legal
Legal factors include discrimination law, consumer law, antitrust law, employment law, and
health and safety law. These factors can affect how a company operates, its costs, and the
demand for its products.

Environmental
Environmental factors include ecological and environmental aspects such as weather, climate,
and climate change, which may especially affect industries. Furthermore, growing awareness
of the potential impacts of climate change is affecting how companies operate and the
products they offer.

Amway products are 100% natural products, so they not affect our Environment.
Amway recycle its waste bottles & containers

AMWAY INDIA
Amway promotes individual entrepreneurship through its innovative direct selling approach
of world class consumer products. Amway India is the countrys leading direct selling
FMCG-company which manufactures and sells world-class consumer products. Its business
opportunity and all its products are covered by 100% Money Back Guarantee. Amway
sources all its products from within India, thereby providing stimulus to the local
manufacturing industry.
Amway India is a wholly owned subsidiary of US $ 7.2 billion Amway Corporation, Ada,
Michigan, USA. Established in 1995, Amway India commenced its commercial operations in
May 1998 and has emerged as the largest Direct Selling FMCG Company. The Company is
headquartered at the National Capital Region of India - New Delhi. Amway has invested in
excess of US $ 35 million (Rs. 151 crore) in India of this; US $ 6 million (Rs. 26 crore) is in
the form of direct foreign investment. Amway India has 400 full time employees and has
generated indirect employment for 1,650 persons at all the contract manufacturer locations.
The Company has provided income generating opportunity to over 4,50,000 active
independent Amway Business Owners. Amway India provides free and unlimited training to
all its distributors to help them grow their business. Amway India conducted over 29,000
training sessions during in the past 12-months with an attendance of over 1.5 million Amway
Business Owners and prospects. Amway India recorded a sales turnover of over Rs. 800 crore
during January07 December07. Amway India is a member of the Indian Direct Selling
Association (IDSA). The IDSA is an industry regulatory body, with several reputed
international and Indian Direct Selling companies as members. Amway India is also a
member of the Confederation of Indian Industries (CII) and Federation of Indian Chambers
of Commerce (FICCI).
In ten years of commercial operation, Amway India has established a nation-wide presence in
over 125 offices and 55 city warehouses and four regional mother warehouses. The
distribution and home delivery network set up with the support of independent logistics
partners is spread across over 3,000 locations.

Amway Opportunity Foundation (AOF)

Amway Opportunity Foundation (AOF) a registered non-profit organization which looks
after Amway Indias Corporate Social Responsibility (CSR). Amway distributors are also
volunteers of AOF and they have enthusiastically participated in all AOF activities. Globally,
Amways CSR campaign is known as the One by One Campaign for Children.
Promoting Free Enterprise and Self-Employment
Amway has conducted several seminars on Entrepreneurial Development and Direct Selling
in concert with the Confederation of Indian Industries (CII) and the All India Management
Association (AIMA) on the benefits of organized direct selling.
Member - IDSA (Indian Direct Selling Association)
Amway India Enterprises Pvt. Ltd. is a member of the India Direct Selling Association. The
Indian Direct Selling Association is an association of companies engaged in the business of
direct selling in India. Its members are of high national and international repute having set
standards in delivering quality goods and in following ethical business practices.

CASE STUDY
Amway India plans Rs. 55 crores expansion by Dec 2009
Tushar Pawar / Mumbai/ Baddi May 15, 2009, 0:55 IST
With an aim to meet the market demand, Amway India Enterprises Pvt Ltd, a major direct
selling FMCG Company in the country, is planning to triple its production capacity by the
end of the current calendar year 2009, at an investment of Rs. 55 crore. The company has said
it will expand the production capacity at its contract manufacturing facility in Baddi
(Himachal Pradesh). The company has just inked an agreement with its Baddibased leading
vendor Sarvotham Care Ltd for the purpose.
Amway India is a wholly owned Indian subsidiary of the US $ 8.2 billion Amway
Corporation, Michigan, and USA, one of the largest Direct Selling Companies in the world.
The company manufactures its production through seven third-party contract manufacturers
in the country, with Baddibased Sarvotham Care being Amway Indias largest vendor
(contract manufacturer).

Around 85 per cent Amway products sold in India are being manufactured by its vendor
Sarvotham Care. With an aim to meet the market demand, we are planning to triple the
production capacities by December 2009. We are adding four new manufacturing lines at our
contract manufacturing facility in Baddi in Himachal Pradesh. The work is expected to start
around midMay and to be completed by the end of the current calendar year 2009. An
investment for expansion is estimated to cost at Rs. 55 crore, said William S Pinckney,
Managing Director & CEO, Amway India Enterprises Pvt Ltd, at a press conference during
the Baddi plant visit for select media reporters. Stating that the direct selling (DS) industry
has good potential in the country, he said, Direct selling industry in the country is estimated
at Rs. 3,500 crore. Amway Indias has market share of 30 per cent in the country.
Amway India grew by 40 per cent in recession hit 2008 touching Rs. 1,128 crores (from Rs.
800 crore in 2007). We are expecting to achieve 25 per cent growth for the next two three
years and the sales turn over target of Rs. 2,500 crore by 2012. Baddi facility is spread over
1.60 square feet area and presently has five manufacturing lines. Amway India currently
offers 110 products in five categories of Personal Care, Home Care, Nutrition & Wellness,
Cosmetics and Gift catalogue. The company has 130 offices and 55 city warehouses across
the country, covering over 4,000 cities and towns through its home delivery network.
"Amway" Goes Astray in China
Amway is a multi-level marketing (MLM, also known as network marketing) company
founded in 1959. The company's name is an abbreviation of "American Way. Its product lines
include personal care products, jewellery, dietary supplements, water purifiers, air purifiers
and cosmetics as well as other products from top brands. Amway is one of the largest
international direct selling companies and entered China in 1995. Their entry into the Chinese
market resulted in big profits and high potential for future growth. However, in 1998 the
Chinese Government declared a ban on direct selling which threatened a substantial market
for Amway. The reason the Chinese government decided to prohibit direct selling is because
they believed Amway's direct-selling techniques could spread heretical religion and the start
of secret societies. Chinese officials believed the ban was totally necessary because Amway's
distribution and marketing policies were indicative of illegal activities. The original intent of
Amway's founders was to create a business using a novel means of product distribution that
facilitates entrepreneurialism, understanding of economic management, and economic
independence among its associates (i.e. distributors; the term currently in use is Independent

Business Owners, or IBOs). Amway's marketing structure is based on personal connections in

order to recruit new salespeople, called distributors. These are independent agents who rely
on close connections such as family, friends and co-workers as customers. To move up the
hierarchical ladder, a successful agent will sell more and more products through this network
of people. The circle gets bigger and bigger as one distributor is supposed to recruit others to
join Amway. The pyramid and recruiting method which Amway distributors use has been
branded for cultic recruitment. The Chinese government became frightened of the potential
chaos Amway's direct selling technique could cause in China. The Chinese government's
concern involves Amway's system of independent networks and door to door sales
techniques. Amway's emotional motivation meetings scared Chinese officials of possible
social chaos. The government's opposition toward direct-sales businesses also originated
from the concern that giant mass organizations could become alternatives to China's
Communist Party and could challenge loyalty to the party. This fear may possibly be justified
given the fact that Chinese society was standardized under the communist party for many
years and Chinese people were already prone to become homogenous under a new concept as
the one that Amway suggested.
In addition, in the Chinese society where "face" is almost everything, a business that relies on
connections can be complicated. The Chinese invented the phrase, "It's not what you know;
it's who you know", so the fact that connections and personal relations serve such an complex
part of Chinese culture, could explain why China's officials took such drastic actions in April
of 1998 by cutting off all direct Amway sales and recruiting methods. There have been severe
criticisms of Amway's multilevel business model. Although, its promoters claim that it is a
business model that is growing in acceptance, and that success will come to anyone who
believes in the system and adheres to its methods, it is mostly based on deceptive marketing
that plays upon social and personal needs rather than its ability to meet any consumer needs.
This market grows significantly in times of economic transition and globalization. Promises
of quick and easy high income, low time requirements, small capital investments and the
linking of wealth to happiness also play in this market setting. Retailing directly to friends on
a one-to-one basis requires people to drastically change their buying habits. They must
restrict their choices, often pay more for goods, buy inconveniently and engage in business
relationships with close friends and relatives. Multilevel marketing's growth does not reflect
its value to the economy, customers or distributors, but the high levels of economic fear,
insecurity, wishes for quick and easy wealth. The commercialization of family and friendship

is a negative element in the society and very harmful for individuals involved. People do not
appreciate being pressured by friends and relatives to buy products. Making money in
multilevel marketing requires extraordinary time commitment as well as considerable
personal skill and persistence. Beyond the hard work and talent required, the business model
consumes more areas of one's life and greater segments of time than most occupations.
Consequently, there is no free time once a person enrols in multilevel marketing system.
Multilevel marketing is not true self-employment. Some multilevel marketing companies
forbid distributors to carry other companies' products. Most multilevel marketing contracts
make termination of the distributorship easy and immediate for the company. Multilevel
marketing distributors are not entrepreneurs but joiners in a complex hierarchical system over
which they have little control. According to the above, a multilevel marketing company could
not be a threat to EU country, as in the EU on the one hand there is a lot of companies and
choices a consumer can make based in their needs and preferences and on the other hand
people are not feeling afraid or insecure in the society at the same extend as in China. So,
these companies cannot present a risk for the social order. Whereas in China which since
1990 was through a transform from a strictly communist political state to a liberated financial
and economic system Amway's multilevel marketing could indeed cause a political chaos, as
Chinese people craved for self-employment and easy profits. 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. Although multi-level payments were still banned, it is alleged that
Amway didn't significantly alter its pay scheme and justified them as payments for services
under pressure from the United States, Beijing agreed to change its laws when it joined the
World Trade Organization in 2001. China's continuing refusal to permit multilevel marketing
"might seem conservative to some people", but the authorities are worried that pyramid sales
could resurface and consumers could suffer. Although China offered to let several of the
"approved" direct selling companies continue to operate by selling their product in
conventional retail outlets, this did not appease Amway at that time. Amway had invested
$100 million in a manufacturing plant in Guangzhou, and had plans for another $25-30
million investment in Shanghai. This reality can explain why the Chinese government easily
adapted to the claim of the U.S. Trade Representative about the multilevel marketing model.

CONTROVERSY
Pyramid Scheme Accusations
Amway has several times been accused of being a pyramid scheme. A 1979 FTC
investigation in the United States (see below), a 1997 Belgian court and a 2008 court
judgment in the United Kingdom all dismissed these claims.

FTC Investigation
In a 1979 ruling, the Federal Trade Commission found that Amway does not qualify as a
pyramid scheme since Amway compensation system is based on retail sales to consumers, not
payments for recruiting. It did, however, order Amway to stop retail price fixing and
allocating customers among distributors and prohibited the company from misrepresenting
the amount of profit, earnings or sales its distributors are likely to achieve with the business.
Amway was ordered to accompany any such statements with the actual averages per
distributor, pointing out that more than half of the distributors do not make any money, with
the average distributor making less than $100 per month. The order was violated with a 1986
ad campaign, resulting in a $100,000 fine.

Amway Andhra Pradesh (India)

In September 2006, following a public complaint, Andhra Pradesh state police (CID) initiated
raids and seizures against Amway distributors in the state, and submitted a petition against
them, claiming the company violated the Prize Chits and Money Circulation Schemes
(banning) Act. They shut down all offices of firm Amway, and Arijit Saha writes that "with it
the fate of 80,000 distributors of the company has been indefinitely sealed". The enforcement
said that the business model of the company is illegal. The Reserve Bank of India (RBI) had
notified the police that Amway in India may be violating certain laws regarding a "money
circulation scheme" and the IB Times article writes that "some say ... Amway is really more
about making money from recruiting people to become distributors, as opposed to selling
products. The complaint was initiated following a dowry dispute between a local man and
his wife, an Amway distributor.

Following a petition by Amway, the state High Court issued an injunction against the CID
and stated the Act did not prima facie apply, however after Amway requested the CID petition
be dismissed the High Court declared that if police allegations were true, Amway's Indian
subsidiary would be in violation of the act and the investigation should continue. On August
14, 2007 the Supreme Court of India ordered the state police to complete the investigation
against Amway in 6 months. In 2008, citing the High Court decision, the Andhra Pradesh
state government enacted a ban on Amway media advertisements. Amway challenged the ban
and in July 2009 the AP High Court refused a petition the ban should be enforced. As of June,
2009 the original 2006 CID case was still pending at the Chief Metropolitan Magistrate Court
in Hyderabad.

Class Action Settlement

On November 3, 2010, Amway announced that it had agreed to pay $56 million - $34 million
in cash and $22 million in products - to settle a class action that had been filed in Federal
District Court in California in 2007. The class action, which had been brought against Quixtar
and several of its top-level distributors, alleged fraud, racketeering, and that the defendants
operated as an illegal pyramid scheme. While noting that the settlement is not an admission
of wrongdoing or liability, Amway acknowledged that it had made changes to its business
operations as a result of the lawsuit. The settlement is subject to approval by the court, which
is expected in early 2011. The economic value of the settlement, including the changes
Amway made to its business model, totals $100 million.

Canadian Tax Case

In 1983, Amway pleaded guilty to criminal tax evasion and customs fraud in Canada,
resulting in a fine of $25 million CAD, the largest fine ever imposed in Canada at the time. In
1989 the company settled the outstanding customs duties for $45 million CAD. In a 1994
interview, Amway co-founder Rich DeVos stated that this incident had been his greatest
"moral or spiritual challenge", first in "soul searching as to whether they had done anything
wrong" and then for pleading guilty for technical reasons, despite believing they were
innocent of the charges. DeVos stated he believed that the case had been motivated by
"political reasons".

RIAA Lawsuit
The Recording Industry Association of America (RIAA), as part of its anti-piracy efforts,
sued Amway and several distributors in 1996, alleging that copyrighted music was used on
"highly profitable" training videotapes. Amway denied wrongdoing, blaming the case on a
misunderstanding by distributors, and settled the case out of court for $9 million. In a related
lawsuit initiated by the distributors involved, the Court established that Mahaleel Lee Luster,
who had been contracted to make the videotapes, had violated copyright without the
knowledge of three of the five of those distributors.

Procter & Gamble

Some Amway distributors were involved with an urban legend that the (old) Procter &
Gamble service mark was in fact a satanic symbol or that the CEO of P&G is himself a
practicing Satanist. (In some variants of the urban legend, it is also claimed that the CEO of
Procter & Gamble donated "satanic tithes" to the Church of Satan.) Procter & Gamble alleged
that several Amway distributors were behind a resurgence of the urban legend in the 1990s
and sued several independent Amway distributors and the company for defamation and
slander.
The distributors had used Amway's Amvox voice messaging service to send the rumour to
their down line distributors in April 1995. After more than a decade of lawsuits in multiple
states, by 2003 all allegations against Amway and Amway distributors had been dismissed. In
October 2005 a Utah appeals court reversed part of the decision dismissing the case against
the four Amway distributors, and remanded it to the lower court for further proceedings. On
20 March 2007, Procter & Gamble was awarded $19.25M by a U.S. District Court jury in
Salt Lake City, in the lawsuit against the four former Amway distributors. On November 24,
2008 the case was officially settled.

Amway UK
In May 2007, the UK Department of Trade and Industry (DTI) accused Amway and
distributor organizations Britt Worldwide and Network TwentyOne UK of "objectionable
practices" and petitioned to wind up the companies. The case against Amway was dismissed

in 2008 on the condition that a full earnings disclosure is published publicly, no registration
or renewal fees are charged and that the sale of business support materials are prohibited. The
case against Network 21 was dismissed in 2009.

Welcome to Life (Poland)

In 1997, Amway Poland and Network TwentyOne separately sued the makers of a Polish film
Welcome to Life for defamation and copyright violations. The film was banned while the suit
proceeded, the first banning of a film in Poland since the fall of Communism. In 2001
Network 21 won their case and the producers were ordered to remove the violating material.
In 2003 the producers were convicted of libel, order to pay a fine to a children's charity and
publish a public apology.

Other Issues
A Dateline NBC report from 2004 picked up the criticism against some Amway distributor
groups. Amway subsequently published a website with a response to the Dateline report.
Some Amway distributor groups have been accused of using cult-like tactics to attract new
distributors and keep them involved and committed. Allegations include resemblance to a Big
Brother organization with paranoid attitude to insiders critical of the organization, seminars
and rallies resembling religious meetings and enormous involvement of distributors despite
minimal incomes.
An examination of the 19791980 tax records in the state of Wisconsin showed that the
Direct Distributors, comprising less than 1% of all distributors, reported a net loss of $918 on
average. Sociologist David G. Bromley calls Amway a quasi-religious corporation having
sectarian characteristics. Bromley and Shupe view Amway as preaching the Gospel of
Prosperity. Economists Bhattacharya and Mehta propose an alternative economic explanation
to negative claims, concluding that distributors' continued involvement despite minimal
economic return results from social satisfaction compensating for less economic satisfaction.

CONCLUSION
Amway 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 thats 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 rock-bottom
prices, then choosing Amway really does make sense.

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