INTRODUCTION TO PROJECTOur objective of the study is to
understand the Amways operations in international marketing with
respect to PESTLE analysis, SWOT analysis, Marketing Mix (Product,
Price, Place, Promotion, Packaging and People) and also we have
compared its operation domestically and internationally. To
understand the former part, we have visited Amway India and
gathered appropriate information with regards to project.
We have analyzed the information of the companies with respect
to above determinants and prepared relevant statement. After all
our proceeds we get to know that this retail company enhanced its
business through Direct Marketing and created both Health &
Wealth to its customers.
Amway is the largest direct selling company and manufacturer in
the world 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 2.3%, reaching US$ 8.4 billion for the
year ending December 31, 2009. Its product lines include home care
products, personal care products, jewelry, electronics, Nutrilite
dietary 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 ninety countries and
territories around the world. It is ranked by Forbes as one of the
largest private companies in the United States and by Deloitte as
one of the largest retailers in the world.Amway is more than an
income opportunity or a company or products. Its about putting
people in control of their lives. Its about connecting people to
others who respect them, who share their goals and aspirations. Its
about supporting people in their achievements. Amway is about
people connecting people to a better way of life.
Amway has more than 6000 employees worldwide. In addition, Amway
has more than 3.6 million Independent Business Owners (IBOs) around
the world. In China, Amway products are sold by Amway sales
representatives.
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 ServicesAmway, 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
fulfill 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 honor,
encourage and support individuals and teams who contribute, through
their behavior 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
THE HISTORY OF AMWAYWhat 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 YearsAmway 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 GrowthAs 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 DecadeThe '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 GenerationAs 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 HorizonsIn 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
principlesfreedom, family, hope and rewardhold 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
AMWAY INDIAAmway 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 arecovered
by100% 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 commencedits 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 providedincome
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.
TERMS USED IN AMWAYIBO/ABO/AIE-Independent Business Owner/Amway
Business Owner/Amway Independent Entrepreneur is a business partner
of Amway who is authorized to market and distribute products and
services available from Amway. Different names are used in
different markets.
Distributor - an older term for IBO.
PV Point Value is a value assigned to each product or service
sold by Amway. An IBOs monthly performance bonus bracket depends on
total PV in a month.
BV Business Volume is typically the wholesale cost of the
product or service sold by Amway. Performance bonuses are
multiplied by the groups total BV.
Performance bonus is the monthly bonus paid by Amway to IBO's.
The higher the PV, the greater the percentage earned. In North
America the Performance bonus ranges from 3% to 25%. In other
markets it ranges from 3% to 21%. In India it ranges from
6%-21%.
Retail Profit is the markup earned by an IBO when they sell a
product to a consumer, either personally or through an Amway
website. Recommended retail markup ranges from 20%-35%.
Sponsor is an IBO who refers (sponsors) a new IBO to Amway,
although IBO's do not get paid to sponsor.
Upline is the term used to refer all the IBOs up in the line of
sponsorship of an IBO.
Downline is the term used to refer all the IBOs down in the line
of sponsorship of an IBO. They are collectively also known as
group.Leg refers to a personally sponsored IBO and all of their
downline.
Silver Producer is an IBO who has reached the maximum bonus
level for one month.
Gold Producer is an IBO who has reached the maximum bonus level
for three months.
Platinum or direct is an IBO who has reached the maximum bonus
level for six months. In North America Platinum is generating a
minimum of approximately $30,000 in sales volume per month.
Emerald a distributor with at least three legs generating Silver
Producer volume for at least 6 months of a year.
Diamond a distributor with at least six legs generating Silver
Producer volume for at least 6 months of a year.
Q-12 is a Platinum or higher IBO that qualifies every month for
12 months of a year.
Independent Business Owner (IBO) An IBO is, literally, an
Independent Business Owner: an individual or individuals who own
and operate their own business, which is powered by Amway North
America, formerly Quixtar. IBOs are the CEOs of their own
businesses, and they make many of the same daily business decisions
other business executives make. As independent business men and
women, IBOs decide how active to be in their business, what
products to sell and at what prices, who to sponsor, what hours to
keep, and other important decisions. IBOs are independent
contractors; they are not employees of Amway North America or Amway
Corporation. As independent business owners, IBOs are free to make
decisions many others in business are not free to make.
Independent Business Owners Association International (IBOAI)The
IBOAI (IBOA International or Independent Business Owners
Association International) is a trade association representing
Independent Business Owners affiliated with Amway North America,
formerly Quixtar. It is the primary advocacy organization for IBOs
in North America. A trade association is an organization of
business people who share common interests or concerns, and who
educate and represent their members. The IBOAI (or IBOA
International) is one example.
Role of the IBOAI BoardThe IBOAI Board is the representative
body of the Association acting on behalf of all IBOs. With IBO
input, support, and participation, the IBOAI Board listens to
ideas, proposes improvements, and advises Amway on the best way to
move the business forward. Working closely with corporate staff,
the Board advises Amway on every facet of the business, from
products and promotions to operations and business guidelines, as
it has for 50 years. Together, they bring positive change to this
business, to keep it moving forward and make certain the business
is better for every generation.
PESTLE ANALYSISPoliticalPolitical 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.
EconomicalEconomical 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.
SocialSocial 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
TechnologicalTechnological 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.
LegalLegal 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.
EnvironmentalEnvironmental 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
PRODUCTS AND SERVICESOver 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.
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 PLANThe Amway is private co operative
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 strategyA 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 centers
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 AMWAYSTRENGTH 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. Rumors for direct selling
operations. Focus shifted from selling products to recruiting.
OPPURTUNITIES 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 AMWAYMulti-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 downline 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?
Business Kit--Priced at Rs995 only
CONTROVERSYPyramid Scheme AccusationsAmway 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 InvestigationIn 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 SettlementOn 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 CaseIn 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 LawsuitThe 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 & GambleSome 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 rumor to
their downline 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 UKIn 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 IssuesA 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.
CONCLUSIONAmway 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.
SUGGESTIONS Trial packs should be used because customer must
have to introduce the product. Once customer gets idea about
product he comes to know advantages of products. The products
should be cheap the home delivery system takes at least two days to
deliver the products so the delivery should be instant. There must
be multiple options for purchasing the products for distributers
like online, tale and instant purchasing. In every city, the Amway
office should be situated in such a location so that it is in reach
of all distributers.
CONCLUSION
I have learned many new things from this project which are very
helpful to me for developing my personality and for increasing my
grasping power.With this project I have learned various things that
are:Relationship of customer and company is very satisfactory
because company always takes feedback from customer.The environment
of company is suitable for employees, manager, distributor and
customers.The management of company is very inspirational to all
the employees because they always try to motivate their employees
by giving extra bonus, incentive etc.The financial position of
company is very good because the demand for companys products is
increased the day by day.Companys human resource department is very
good and they provide the facilities for distributors and
customers. Company organizes the event for new product launching
and other product available for customer also.Benefits that I have
got from the Project:I have collected data from internet.I learned
organization structure.I have improved my typing speed.I learned
information technology process.I got information of various types
of products.I have understood various types of distributer.I got
information of human resource facility to employees.I have
understood various types of social responsibility.
REFERENCE
Website:- www.amway.com www.amwayindia.in www.amway.co.in All
Product Hand Book Research Methodology Book By Mr.C.R
KothariEmail.Id:[email protected]@facebook.com
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