Avon 2010 Annual Report Download - page 20

PART I
• realize anticipated cost savings and reinvest such savings effectively in consumer-oriented investments and other aspects of our business;
• implement appropriate product mix and pricing strategies, including our PLS program and achieve anticipated benefits
from these strategies;
• implement enterprise resource planning and SSI and realize efficiencies across our supply chain, marketing processes, sales model
and organizational structure;
• implement customer service initiatives, the Sales and Operation Planning process and a zero overhead growth philosophy;
• implement and continue to innovate our Internet platform and technology strategies;
• implement our outsourcing strategies;
• implement initiatives to reduce inventory levels;
• secure financings at attractive rates, maintain appropriate cash flow levels and implement cash management, tax, foreign currency
hedging and risk management strategies;
• transition our business in North America, including optimizing our product portfolio and enhancing field fundamentals;
• implement our Sales Leadership program globally, recruit Representatives, enhance the Representative experience and increase their
productivity through Service Model Transformation and other investments in the direct-selling channel;
• increase the number of consumers served per Representative and their engagement online, as well as to reach new consumers through a
combination of new brands, new businesses, new channels and pursuit of strategic opportunities such as acquisitions, joint ventures and
strategic alliances with other companies; and
• estimate and achieve any projections concerning future revenue and operating margin increases.
There can be no assurance that any of these initiatives will be successfully and fully executed in the amounts or within the time periods
that we expect.
We may experience difficulties, delays or unexpected costs in completing our multi-year
turnaround plan, including achieving the anticipated savings and benefits of the
initiatives thereunder.
In November 2005, we announced a multi-year turnaround plan as part of a major drive to fuel revenue growth and expand profit margins,
while increasing consumer investments. Restructuring initiatives that are part of the turnaround plan include: enhancement of organizational
effectiveness, implementation of a global manufacturing strategy through facilities realignment, additional supply chain efficiencies in the
areas of procurement and distribution and streamlining of transactional and other services through outsourcing and moves to low-cost
countries. As part of the turnaround plan, we also launched our PLS program and SSI initiative. In February 2009, we announced a new
restructuring program under our multi-year turnaround plan, which focuses on restructuring our global supply chain operations, realigning
certain local business support functions to a more regional basis to drive increased efficiencies, streamlining transaction-related services,
including selective outsourcing, and reorganizing certain functions.
We may not realize, in full or in part, the anticipated savings or benefits from one or more of these initiatives, and other events and
circumstances, such as difficulties, delays or unexpected costs, may occur which could result in our not realizing all or any of the anticipated
savings or benefits. If we are unable to realize these savings or benefits, our ability to continue to fund planned advertising, market
intelligence, consumer research and product innovation initiatives may be adversely affected. In addition, our plans to invest these savings
and benefits ahead of future growth means that such costs will be incurred whether or not we realize these savings and benefits.
We are also subject to the risk of business disruption in connection with our multi-year restructuring programs or other strategic initiatives,
which could have a material adverse effect on our business, financial condition and operating results.
There can be no assurance that we will be able to achieve our growth objectives or maintain
rates of growth.
There can be no assurance that we will be able to achieve profitable growth in the future or maintain rates of growth, particularly in our
largest markets and developing and emerging markets, such as Brazil or Russia. Our growth overall is also subject to the strengths and
weakness of our individual markets, including our international markets, which are or may be impacted by global economic conditions. We
cannot assure that our broad-based geographic portfolio will be able to withstand an economic downturn, recession, cost inflation,
competitive or other market pressures in one or more particular regions. Our ability to increase or maintain revenue and earnings depends
on numerous factors, and there can be no assurance that our current or future business strategies will lead us to achieve our growth
objectives or maintain our rates of growth.