1. Amway Japan Limited
Group 5

2. Agenda
• Summary
• Company Introduction
• SWOT Analysis
• Porter 5 Forces Analysis
• Segmentation
• Marketing Challenges
• Strategy Choice

3. Summary
• Strategic Objective:
– Increase Sales
• Strategic Options
– Sponsoring and retention
– Enhancement of current distributors
– Aggressive growth strategy (Both)
• Group Recommendation
– Sponsoring and retention (70% of Sales come
through them)
– Price parity across geography

4. • Vision
– To be the best business opportunity in the world
• Mission
– 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
• Values
– Partnership, Integrity and Personal Worth

5. SWOT Analysis
Strength :
1. Market Leader
2. Global brand
3. Direct interaction with distributors and customers
4. Customized product development or large portfolio
of products
5. Partnership of distributors in every sale made
increases reliability of distributors and hence
motivate them to increase sale with 70% retention
as compared to Industry average of 50%

6. SWOT Contd…
• Weakness :
1. High Prices of products (Growing
Dissatisfaction)
2. Exchange rate fluctuations since all the
products imported to Japan
3. Difficulty in Controlling Distributor network

7. SWOT Contd…
Opportunity :
1. Changing Demography and Macro Economic
conditions
Threats :
1. Regulation
– Complex Door to Door selling law
2. Price Sensitivity
– Price slashing in Japanese market , customers
started preferring low pricing products
3. Failure of pyramid schemes

8. Company Products
• 140 Product items
• 4 Categories
– Personal Care (32.4%)
– Housewares (29.5%)
– Nutrition (23.8%)
– Homecare (10.2%)

9. Company –External Analysis
• Political – Frequently Changing regulation
without any clarity
• Economical – As mentioned in case also
customers are becoming price sensitive while
products offered by company are costly.
• Socio-cultural – Decreasing growth in Japan
leading to unemployment, More number of
people in higher age bracket, changing lifestyle
• Legal – As mentioned in case new door to door
selling law is not properly understood by
company

10. Competition Analysis
• Porter’s 5 Forces :
To analyze the competition in the market for the company porter’s 5 forces
has been studied .
Threat of Substitutes :
If we consider it as product company, where in most of the products are of
daily use and more of the offerings are generally same with slight
differentiation so, threat of substitutes is relatively high. If we consider it
as Opportunity provider, then threat of substitute is moderate as
unemployment rate is low in Japan
Threat of New entry :
As entry barriers is low as there are 23 companies using MLM, threat of new
entrants is moderate

11. Contd..
• Power of suppliers : Low, as suppliers are many and distributed
• Power of buyers : As buyers have multiple choice and switching cost
is low, hence power of buyer is high
• Internal Competition : Internal competition is intense and price is
the factor in which all the companies compete while Amway is
following differentiated product strategy.
Analyzing all the forces the resultant which comes out is pointed
in buyer and new entrant quadrant with more focus on internal
competition i.e. company should continue differentiated product
development which will hinder threat of new entrants and more
customized products will cope up the buyers power all this strategy
company is already pursuing but for internal competition company
should start focusing on low price products.

12. Porter’s 5 Forces analysis
H New Entrant
H H
Suppliers L Buyers
H Substitutes

13. SEGMENTATION
• AMWAY JAPAN was an part of Direct selling Industry.
• “AMWAY`s distribution policy was to promote the existing
costumers to make further new consumers and share profit
on every product sold through them.
• Once a new customer added in to the chain, the preceding
customer will start acting like an distributor and earns
commission of product sold to new consumer.
• The whole customer base consists of : Major distributors-
distributors(1) – distributors(2) – distributor(up to ‘n’) –
customer (who would also act like an distributor for proceeding link)

14. Segmentation continues…
• The Target market can be segmented as :
• 1 : Customers (Major Distributors)- Taking it purely on
commercial basis to generate profit.
• 2: Customers (small distributors) who are consumers but
also like to earn some side income through making
further customers.
• 3: Persons who buys the products solely for their own
consumption. Not intended to be part of chain to earn
profit by lengthening the chain.

15. Marketing Challenges
• Distributor Motivation
– Vary from high to low depending on schemes
• Growing Dissatisfaction with Products
– High Price
• Low perceive value
• Parity in Price
• Controlling Distributor
– Bad practice because of revenue or peer pressure
• Changing Market Environment
– Price Sensitivity
– Regulation

16. Strategy Choice
• Penetration Growth
– Increase number of distributors
– Retention of Distributors
• Productivity Growth
– Increase sales from existing distribution
• Mix

17. Group Recommendation
• Penetration growth
– Increase number of distributor
• Low Churn (70% retention as compared to global 50%)
• 70% of sales is by distributors themselves
• By appointing more distributors, it will decrease competition
• Low Sales Pressure
• Bring price parity as compared to competition and Geography
– Lead to Distributor / Customer satisfaction
• Enhance Public relation and External Affairs
– Increase CRM
– Business model to decrease negativity towards comparison with
Pyramid model

18. THANK YOU