STRATEGIC MANAGEMENT

Gaurav Joshi

20200212060051

1. Who are the stakeholders and what methods of communication does Amway use with each?

Ans. A group or individual with an interest in a company or project is referred to as a stakeholder.

Investors, employees, customers, and suppliers are the major stakeholders in a normal firm.
Stakeholders, according to certain definitions, are people who have the power to influence an
organisation or project in some way. Stakeholders can be communicated with in a variety of ways.
They, like Amway, use websites, emails, and voice mail to communicate with Amway Business
Owners (ABOs) and their customers, as well as to advertise products and services. Amway also uses
industry groups as a tool for members to share and receive industry knowledge. Monthly
newsletters, Amway Focus, and Amagram are used to keep all members up to date on current
Amway information. Amagram, for example, provides ABO success recognitions, articles on new
leader (Diamond and above), product training, and other information. Aside from that, Amway uses
events and exhibitions to communicate with ABOs, consumers, and visitors on how to manage an
Amway business and the things it can provide. Amway communicates with each stakeholder in a
unique way. The stakeholders and how Amway communicates with them are listed below.

The corporation is controlled and led by the Amway Head Office (USA) and regional affiliates, such as
Amway (UK and Ireland). They are at the top of the supply chain and make the most important
decisions that affect the rest of the stakeholders. They also plan all of the activities that will help
them promote their brand internationally.

Suppliers and manufacturers: When they want their items created or sold, Amway engages with
them via email and voice mail. They will contact the supplier or manufacturer and place an order for
the amount of product they require. Suppliers and manufacturers can attend events and fairs to
learn how Amway works and what sorts of items they prefer to offer in order to properly portray
Amway's image. They will learn at these sessions that Amway will only accept their products if they
meet their quality standards and ethnic preferences.

ABOs (Amway Business Owners): Amway communicates with ABOs via websites, emails, and voice
mail updates to advertise their products and services, as well as events and exhibitions to help ABOs
learn about running an Amway business and the products they offer.

Employees: Amway communicates with its employees in the same way as it does with its ABOs. They
send out emails, websites, voice mails, or the employee goes to events or exhibitions to learn how to
be a good employee and represent the firm successfully. Amway's community partners are non-
profit organisations. Amway is always supporting a cause and generating funds to support the
organisations' programmes since they have an impact on the community and Amway consumers are
part of it. They will publicise this on their websites, emails, voicemails, events, and monthly
newspapers to let people know that Amway collaborates with community organisations.

The public: Amway connects with its customers via websites, emails, voice mails, and live events.

2. Explain how the ABOs operate their business and the potential issues?
Ans. Amway employs a multi-level marketing technique in addition to direct selling. Amway Business
Owners (ABOs) have the ability to promote items directly to potential clients as well as recruit
(sponsor) and teach others to become ABOs. ABOs can make money from the retail markup on any
products they individually sell, as well as a performance incentive depending on the sales volume,
they and their downline (ABOs they've sponsored) have created. People can also register as ABOs to
get discounts on products. The Amway Sales and Marketing Plan is a tiered distribution and
remuneration scheme that claims to reward members who increase Amway's market share through a
combination of sales and recruiting. This tiered distribution plan is based on Amway Business Owners
(ABOs) acquiring and training other ABOs, which is a key feature of a pyramid scheme.

ABO signed a contract agreeing to follow Amway's Code of Conduct and Ethics. If ABOs do not follow
these rules, their actions may reflect negatively on the firm. By developing relevant Amway products
for ABOs to sell, Amway devotes time, effort, and money to help its business communities.

Amway also paid attention to the concerns of its ABOs. Amway's engagement with UNICEF on
Immunization Plus programmes is one of the projects that arose from ABO's concern. ABOs are small
businesses that operate on their own. They establish direct supply routes and sell to friends and
consumers they know or encounter. They must be adaptable in their business practises. They
demand that Amway produce high-quality, value-for-money items with a 100% satisfaction guarantee
while adhering to a code of ethics.

3. Describe Amway’s strategy and its impact on its stakeholders?

Ans. Amway is the world's largest direct selling corporation and producer, selling a wide range of
products through network marketing, primarily in the health, beauty, and home care areas. Home
care items, personal care products, jewellery, electronics, Nutrilite dietary supplements, water
purifiers, air purifiers, insurance, and cosmetics are among the company's product lines. The Amway
Sales and Marketing Plan is a low-risk, low-cost business opportunity that anyone may participate in.
It enables users to grow their businesses by selling things and sponsoring others who may then sell
products and give the business opportunity to others. Users not only establish their own business
network but also allow others to do so by passing on their sales and marketing knowledge to their
developing team. The selling of superior AMWAY products and services to retail customers is at the
heart of the Amway Sales and Marketing Plan's revenue opportunity. The awards you get increase in
proportion to the size of your Amway business. Multi-level marketing (MLM) is based on a basic
concept. Amway employs a direct marketing approach. The retailor (the middleman) is excluded from
a direct marketing company. In the direct marketing technique, a sales associate acts as a company
representative and visits clients directly to deliver the goods they require. This method is used by a
wide range of businesses, from painting services to health supplements. This type of business is akin
to the classic travelling salesperson who goes from house to house, attempting to sell a product that
will sell itself. Typically, advertising is done by word of mouth among the customers' friends, rather
than by this individual. Multilevel marketing, often known as network marketing, is used by Amway.
Individuals known as distributors sell things, usually over the phone or door to door, in this type of
direct sales. Distributors enlist the help of other distributors who do the same thing. In addition to
the money, they get from their own sales, each distributor makes money on the products that their
recruits sell. The idea is that the original distributor will soon be able to sit back and let the
distributors he hired make money for him. Amway has a worldwide strategy for manufacturing,
distributing, and marketing its products. It also has a global plan to promote corporate social
responsibility (CSR). CSR refers to a company's part in fulfilling its broader responsibilities as a citizen.
Supporting worthwhile causes and always operating ethically and honestly are examples of such
commitments. Amway's product development and promotion are influenced by its customers. They
do it by providing input on their preferences and requirements. Amway can then produce more of a
specific product or alter the format of others. Amway's stock requirements are also influenced by
consumer demand.

4. Using examples, discuss the meaning of an ethical business?

Ans. The Amway Rules of Conduct define and establish specific principles to be followed in the
creation and maintenance of an Amway Distributorship, as well as each Amway Direct Retailer/
Seller's rights, obligations, and responsibilities. The Rules are intended to protect the benefits
provided to all Direct Retailers/Sellers as part of the Amway Sales and Marketing Plan. Amway and its
Direct Retailers/Sellers have a legally enforceable contract. The Amway Direct Retailer/Seller
Application Form lays out the terms and limitations of this partnership. Amway Business Starter
Guide, which comprises the Amway Sales & Marketing Plan and Amway Rules of Conduct, as revised
from time to time by Amway. A person must submit a signed, completed Direct Retailer/ Seller
Application, along with all needed supporting paperwork, in order to be considered for an Amway
distributorship. A distributorship can be started by an individual, as a sole proprietorship,
partnership, one-person company, or as a corporation. Amway maintains the right to demand that
NRI applicants run distributorships via specific types of legal companies, as well as the right to refuse
or accept any such application at its sole discretion. When it comes to apparently contentious topics,
business ethics refers to the implementation of acceptable corporate rules and procedures.
Corporate governance, insider trading, bribery, discrimination, social responsibility, and fiduciary
obligations are some of the topics that come up in discussions about ethics.

Following the company's standards, effective communication, accepting responsibility, accountability,

professionalism, trust, and mutual respect for your co-workers are all examples of ethical business.
Corporate ethics is concerned with business ethics and the ongoing process of maximising profit in
the perspective of what is good and wrong. Companies that create their workplace culture around
putting the needs of their customers first and hire employees who do the same are engaging in
ethical conduct. If a client walks into a store searching for a product that fits extremely particular
demands.

For example, instead of upselling or urging them to buy a product that won't satisfy their wants, it's
vital to present them with the best product for the circumstance mentioned. However, it is critical to
ensure that the "customer first" mentality does not unwittingly lead to unethical employee
behaviour, such as pushing workers to work more overtime than is permitted, forcing them to suffer
customer abuse with no safe way out, and so on. Whether it's financial information, health
information, or anything else, many businesses gather personal information from their consumers.
Securing and preserving sensitive information should be one of any company's top concerns. A
hospital, for example, may enact and enforce strict regulations prohibiting employees from posting
patient information on social media. Not only is it insulting to the patient's privacy to have a staff post
this type of information on their personal accounts, but it also puts the hospital at danger.